For the millions of people who tuned into the Berkshire Hathaway annual meeting, careful viewers were rewarded with an unexpected bit of news: who will be the next CEO of the company.
In response to a question on Saturday about whether the company would eventually be too complex to manage, Berkshire Vice Chairman Charlie Munger made a comment that, on the surface at least, wasn’t all that surprising.
“Greg will keep the culture,” the 97-year-old Munger said simply, explaining that the company’s decentralized nature would outlast him and Warren Buffett.
But that was enough to clue in some Berkshire watchers, who have been wondering about succession plans at the conglomerate once 90-year-old Chairman and CEO Buffett is no longer in charge. To many, it signaled the top job will go to Vice Chairman Greg Abel, who runs all of the noninsurance operations.
The impression was an accurate one, CNBC can confirm.
“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 said. He praised Abel and Vice Chairman Ajit Jain, who runs all of Berkshire’s insurance operations.
Greg Abel at Berkshire Hathaway’s annual meeting in Los Angeles California. May 1, 2021.
Gerard Miller | CNBC
Both had been seen as being in the running for the top job since they were promoted to vice chairmen in 2018. “If, heaven forbid, anything happened to Greg tonight then it would be Ajit,” said Buffett, adding that age is a determining factor for the board. Abel is 59 and Jain is 69. “They’re both wonderful guys. The likelihood of someone having a 20-year runway though makes a real difference.”
The question of who would take over after Buffett has been a source of speculation for over 15 years. For years, it was assumed that Buffett’s successor would be David Sokol, who ran MidAmerican Energy, now called Berkshire Hathaway Energy, and NetJets for Berkshire. But Sokol left Berkshire in 2011 after it was disclosed he had taken on a $10 million stake in chemical company Lubrizol shortly before recommending Berkshire buy the company.
From Buffett’s perspective, Munger was simply acknowledging what has been a common practice for the board of directors. “We’ve always at Berkshire had basically a unanimous agreement as to who should take over the next day,” said Buffett. “The world’s paying more attention now.”