Berkshire Hathaway is one of the most successful companies on the planet thanks to the leadership of Warren Buffett. But many have wondered who Buffett’s successor would be once the famed investor retired. It appears that we now have the answer.
Buffett has confirmed that Berkshire Hathaway’s vice-chairman of non-insurance operations, Greg Abel, will succeed him as CEO. Here’s everything you need to know about the man who will take over Berkshire after Buffett retires.
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What is Berkshire Hathaway?
Berkshire Hathaway is a holding company for a number of well-known brands. These include battery maker Duracell, insurer Geico, and restaurant chain Dairy Queen among others. In total, Berkshire Hathaway owns more than 60 companies.
The entity also has significant holdings in big companies like Coca Cola, Apple and Bank of America.
Buffett, whose penchant for long-term investments is well known, purchased Berkshire Hathaway, which was then a failing textile manufacturer, in 1965. He has since transformed it into a $628 billion ($452 billion) investment juggernaut, as mentioned by the BBC.
Who is Buffett’s successor, Greg Abel?
Greg Abel, who is 59, has been with Berkshire Hathaway for more than two decades. The Canadian rose through the ranks in Berkshire’s energy unit, helping to transform it into a major US power provider.
The son of a salesman, Abel grew up in Canada and earned money by doing odd jobs like delivering advertising flyers and filling fire extinguishers.
He graduated from the University of Alberta with a degree in commerce. After college, he worked as an accountant at PricewaterhouseCoopers for a short while. He then joined the geothermal electricity company CalEnergy, which later became MidAmerican Energy.
His association with Berkshire began in 1999. That is when the company acquired a controlling interest in MidAmerican, of which Buffett’s confirmed successor was president at the time.
The company changed its name to Berkshire Hathaway Energy (BHE) in 2014. Abel served as CEO between 2008 and 2018 before becoming a Berkshire vice-chairman. However, he still serves as BHE’s chairman.
In 2015, The Wall Street Journal described Abel as an ‘astute deal maker’.
CNBC reports that Abel’s salary at Berkshire can vary from year to year. In both 2019 and 2020, he earned $16 million (£11.5 million), with annual bonuses of $3 million (£2.16 million) in each of these years. In 2016, however, he received $41 million (£29.5 million) as compensation, thanks to a large bonus that he earned due to BHE’s profits surging that year.
His current worth, according to Forbes, is about $484 million (£348 million). Most of this is from a stake in Berkshire’s privately held energy subsidiary.
In comparison, the man he is succeeding, Buffett, is now worth more than $100 billion (£72 billion) after Berkshire’s shares rallied to record highs in March 2021.
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When will Buffett’s successor take over?
Buffett, who is 90 years old, has not stated when he intends to retire.
The announcement of Abel appears to have been forced as a result of a slip by another Berkshire vice-chairman, Charlie Munger. According to the BBC, while answering questions about the company’s decentralised business model during its most recent annual meeting, Munger said “Greg will keep the culture”.
Buffett later confirmed that Abel would indeed be his successor. He said, “The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning.”
While some investors may find it difficult to imagine Berkshire Hathaway without its legendary CEO, the confirmation of a successor should at least calm things down and put an end to decades of speculation.
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