Meet Greg Abel, the 58-year-old Berkshire Hathaway vice chairman just tapped as Warren Buffett’s successor

greg abel berkshire hathaway

Berkshire Hathaway held its annual shareholder meeting on Saturday and Warren Buffett pointed to Greg Abel, the 58-year-old leader of Berkshire’s non-insurance businesses, as next in line if and when the Oracle of Omaha steps down.

“The directors are in agreement that if something were to happen to me tonight it would be Greg who’d take over tomorrow morning,” Buffett told CNBC on Monday.

Speculation about a successor to the famed billionaire investor began in 2006 when a then spry 75-year-old Buffett first discussed plans for his succession in an annual shareholder letter.

At the time, Buffet mentioned how he had hoped his long-time right-hand man, Charlie Munger, would take over the business, but noted that he needed someone younger to fill the role.

Buffet added that Berkshire needs “someone genetically programmed to recognize and avoid serious risks, including those never before encountered.”

Now, Greg Abel has been selected as that person-and in the annual shareholder meeting, his comments prove he may be exactly the “genetically programmed” risk manager that Buffett had envisioned in 2006.

“I’m trying to understand what our competitors are doing, what’s the fundamental risks around those businesses, how they’re going to get disrupted,” Abel said at this year’s shareholder meeting. “It always comes back to are we allocating our capital properly in those businesses relative to the risk?”

Background and Resume

Abel began his career working for PricewaterhouseCoopers before joining CalEnergy, a geothermal electricity producer, in 1992.

Then, in 1999, CalEnergy acquired MidAmerican Energy and adopted its name before Berkshire Hathaway picked up a controlling interest in the firm later that year.

Abel became the CEO of MidAmerican in 2008, which was renamed Berkshire Hathaway Energy in 2014.

The Canadian-born certified public accountant was the chief executive officer of Berkshire Hathaway Energy from 2008-2018 and the president from 1998-2018. Abel currently serves as Berkshire Hathaway Energy’s chairman and has served on the board of directors since 2000.

In January 2018, Abel was named vice chairman of non-insurance operations for all of Berkshire Hathaway and appointed to the conglomerate’s board of directors.

Abel also serves as a director and vice-chairman of Associated Electric & Gas Insurance Services Limited and serves on the board of directors for The Kraft Heinz Company as well as AEGIS Insurance Services.

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The Succession of the Oracle of Omaha

Greg Abel has been known as the likely successor to Warren Buffett by many on Wall Street for years now.

In 2017, Sarah DeWitt, an analyst with JP Morgan initiated coverage of Berkshire and said the energy executive was the “most likely” candidate to replace the “oracle of Omaha.”

That suspicion was never confirmed by the conglomerate, however-until Saturday. In Berkshire’s annual meeting, Abel was officially named as the successor to Buffett.

Warren Buffett’s long-time right-hand man and current Berkshire vice chairman Charlie Munger said that he believes “Greg will keep the culture” that has made Berkshire so successful for decades.

During his reign, Buffett, who is now 90-years-old, has turned Berkshire Hathaway into a more than $630 billion business.

The conglomerate owns a share in everything from Apple and Coca-Cola to Bank of America and the United Parcel Service.

Buffett has been an ardent supporter of the American economy, and the stocks that track it, ever since he began investing back in 1942.

Based on what Buffett and Munger have said about Greg Abel, investors can expect much the same from the long-time Berkshire loyalist if and when he takes the reins.

Thoughts from the Street

Analysts, market commentators, and professors are mostly positive about Abel’s prospects as the leader of Berkshire Hathaway. Here are a few reactions to the news of his selection.

1. “Abel, of course, does not have the charisma, personality, and reputation that Buffett built over decades, so he’s not going to have that magnetism that Buffett has, but he exudes extreme competence and success. He has a very successful track record at Berkshire and I don’t think shareholders can ask for anything more than that.” David Kass, a professor of finance at the University of Maryland’s Robert H. Smith School of Business, told Bloomberg.

2. “Greg is a natural successor to Warren Buffet and has been groomed for this post. Culturally it’s a smart pick and one that should sit well for investors. That said, filling the shoes of a global icon and investing genius is a tough task and will have its share of challenges ahead. It’s like filling in for Mantle or Gehrig in the Yankees lineup after they left,” Dan Ives, managing director of equity research at Wedbush Securities, told Insider via email.

3. “The good news with Greg was he had the answers on his tongue. There was no question or ambiguity in his responses. Let’s hope Charlie is right that the culture can be replicated.” Ed Walczak, portfolio manager at Vontobel told The Financial Times.

4. Jim Shanahan, an analyst at Edward Jones said he suspects “Buffett disclosed this reluctantly.” And said that “Abel’s coronation is not exactly a surprise,” but noted he has a “great deal of comfort” with Abel taking over the business, per Reuters.

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Warren Buffett says Greg Abel is his likely successor as Berkshire Hathaway CEO

greg abel berkshire hathaway
  • Billionaire Warren Buffett told CNBC that his likely successor as Berkshire Hathaway’s CEO will be Greg Abel.
  • Abel, 59, serves as vice chairman of the conglomerate’s non-insurance operations.
  • Buffett made the confirmation following remarks by vice chairman Charlie Munger during the company’s annual meeting Saturday.
  • See more stories on Insider’s business page.

Berkshire Hathaway’s Greg Abel, who serves as the conglomerate’s vice chairman of its non-insurance business, would be the executive tapped to become Warren Buffett’s successor in the role of CEO, CNBC reported Monday.

“The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning,” Buffett told CNBC.

The confirmation followed a comment made by Berkshire vice chairman Charlie Munger during a Q&A session at the company’s annual meeting on Saturday.

“Greg will keep the culture,” he said, in responding to a question about whether the company would become be too complex to manage. Munger, 97, said Berkshire’s decentralized nature would outlast him and Buffett, the report said.

Abel and vice chairman Ajit Jain, who oversees Berkshire’s insurance operations, have been widely considered as the top candidates to succeed Buffett, 90, when he relinquishes the reins. Both were promoted to vice chairmen in 2018.

“If, heaven forbid, anything happened to Greg tonight then it would be Ajit,” said Buffett, according to the CNBC report, adding that Buffett said age is a determining factor for Berkshire’s board. Abel is 59 and Jain is 69.

Read more: Buy these 14 high-quality stocks poised to beat the market as the economy enters a new phase of rapid growth, Credit Suisse says

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LIVE: Warren Buffett and Charlie Munger speak at Berkshire Hathaway’s annual meeting

Warren Buffett and Charlie Munger.

  • Warren Buffett and Charlie Munger spoke at Berkshire Hathaway’s annual meeting on Saturday.
  • The pair are set to discuss stocks, market speculation, the economy, and other subjects.
  • The billionaire investors cautioned amateur investors against betting on fads.
  • See more stories on Insider’s business page.

Warren Buffett has kept an extremely low profile over the past year. He finally broke his silence at Berkshire Hathaway’s annual shareholder meeting on Saturday, which was livestreamed by Yahoo Finance.

The famed investor and Berkshire CEO was joined by his company’s right-hand man, Charlie Munger, on the stage in Los Angeles on Saturday. Berkshire’s heads of insurance and non-insurance operations, Ajit Jain and Greg Abel, were also in attendance.

Buffett and Munger signaled a return to normality at the meeting, which is being held remotely this year due to the coronavirus pandemic. They positioned themselves on either side of a box of Peanut Brittle from See’s Candies, one of Berkshire’s oldest and best-known businesses. Munger had a couple of cans of Coca-Cola – one of the five biggest holdings in Berkshire’s stock portfolio -stationed in front of him.

Follow along for live updates as the meeting continues:

Buffett says that Berkshire’s businesses have done “really quiet well” in extraordinary circumstances.

The billionaire investor opens his presentation this year by highlighting how the biggest companies in the world change from decade to decade.

This story is being updated. Check back for more updates.

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Warren Buffett’s annual salary has been $100,000 for 40 years. Here’s a look at the billionaire investor’s unique compensation.

warren buffett
Warren Buffett.

  • Warren Buffett’s annual salary has been $100,000 for the past 40 years.
  • Berkshire Hathaway spends triple that amount on his security each year.
  • Buffett owns about $100 billion of Berkshire stock and lives modestly.
  • See more stories on Insider’s business page.

Warren Buffett is a legendary investor, leads one of the world’s biggest companies, and has ranked among the world’s wealthiest people for decades. Yet he earns a modest annual salary of $100,000 – and hasn’t had a pay rise in 40 years, SEC filings show.

As Berkshire Hathaway’s CEO and chairman, Buffett recommends to his board of directors how much he should be paid, and decides the the rest of the executives’ compensation. The 90-year-old has received $100,000 a year since 1980 – a fraction of the $15 million average pay of S&P 500 CEOs in 2019.

Buffett doesn’t earn much from other sources either. He netted double his salary in annual directors’ fees in the 1990s and early 2000s, before he resigned as a director of The Washington Post Company and stepped down from other corporate boards.

The highest total compensation he’s ever received at Berkshire was $525,000 in 2010, comprising his $100,000 salary, $75,000 in directors’ fees, and $350,000 allocated to his security costs.

Berkshire spends far more on Buffett’s personal and home security than it pays him directly. Keeping the boss safe has cost the company an average of $339,000 a year since 2008, or $4.4 million in total.

Buffett isn’t in desperate need of a big salary. He owns roughly $100 billion of Berkshire stock – which he’s gradually giving away – and doesn’t spend much: he lives in a modest family home, drives a basic car, and eats breakfast at McDonald’s.

The investor also doesn’t use a company car, belong to any clubs where Berkshire pays his dues, or commandeer company-owned aircraft for his personal use.

Buffett shared his views on salaries at Berkshire’s annual shareholder meeting in 2017, when he was asked how much his successor would be paid. He expressed hope that the next CEO would already be rich, and wouldn’t be motivated to earn 10 or 100 times the money their family needs to live on.

“They might even wish to, perhaps, set an example by engaging for something far lower than, actually, what you can say their true market value is,” he continued, adding it would be “terrific” if that was the case.

Buffett is a firm believer that CEOs should be incentivized to deliver long-term success for their companies. He believes massive annual salaries, bonuses, and short-term stock options encourage short-term thinking.

Charlie Munger – Buffett’s right-hand-man and Berkshire’s vice-chairman – has followed Buffett’s example. He’s also received a salary of $100,000 a year for several decades now, SEC filings show.

In contrast, Ajit Jain and Greg Abel, who head up Berkshire’s insurance and non-insurance divisions respectively, are paid far more handsomely. Both men have earned a $16 million salary in each of the past of three years, plus total bonuses of $7 million each.

Finally, Berkshire’s finance chief, Marc Hamburg, has seen his salary grow from about $300,000 in 1996 to $3.3 million last year.

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