By Koh Gui Qing
OMAHA, Nebraska (Reuters) – When Greg Abel succeeds Warren Buffett at the helm of Berkshire Hathaway, he will be expected to maintain the culture at the behemoth even if he cannot match the star power of his legendary boss.
A 25-year Berkshire veteran, Vice Chairman Abel, 61, is expected by investors and analysts to continue the $865 billion conglomerate's track record of investing in long-term companies and avoiding dividend payments to shareholders. will keep.
Berkshire, which owns railroads, insurance companies and an ice cream maker, has been planning for decades for the possibility that 93-year-old Buffett, who has led the company since 1965, is gone.
Although Buffett has shown no signs of stepping aside, investor focus on Berkshire's future returned to the fore after Charlie Munger, Buffett's longtime friend and business partner, died in November at the age of 99. At Berkshire's annual shareholder meeting in Omaha on Saturday, investors questioned Buffett and Abel about succession.
“We have a very special company in Berkshire, but it is that culture that makes it special, and that will not change,” Abel, who was named as Buffett's successor as CEO in 2021, said at the shareholders meeting.
Buffett repeatedly assured shareholders that Berkshire is in good hands, saying that these days Abel is “in charge of literally everything except insurance.”
“We (have) the same feeling when it comes to assessing the attractiveness of companies and making capital decisions and things like that,” Buffett said.
That sentiment was echoed by Ronald Olson, a Berkshire executive.
“Greg understands the (Berkshire) culture and he will honor it,” Olson said before the meeting. “Greg doesn't consider himself Warren Buffett, but I have no doubt that Greg (Berkshire) walks the same path.”
Abel and Berkshire did not respond to requests for interviews.
A DETAILS MAN
Gregory Edward Abel was born on June 1, 1962 in Edmonton, Alberta, to a working-class family. He did odd jobs, cleaned discarded bottles and filled fire extinguishers, according to the Horatio Alger Association of Distinguished Americans, an education nonprofit that honored Abel in 2018.
“It was a real working-class family where sometimes people had jobs and sometimes they didn't,” Abel said of his childhood in a video on Horatio Alger's website. “You realized that we were all working hard to move our family forward.”
Abel graduated from the University of Alberta in 1984 and worked at PricewaterhouseCoopers and energy company CalEnergy. He joined Berkshire Hathaway Energy, then known as MidAmerican Energy, in 1992, which Berkshire acquired in 1999 and became head of MidAmerican in 2008. He now oversees Berkshire's non-insurance businesses, such as BNSF, Berkshire Hathaway Energy and dozens of chemical, industrial and retail businesses.
Some executives who work with Abel say he scrutinizes financial metrics such as inventory levels, cash flows, capital expenditures and earnings before interest, taxes, depreciation and amortization.
“Greg looks at our inventory levels more than Warren does. He will sometimes circle around it and say, 'Oh, that looks high,'” Adrienne Perry, chief revenue officer at Borsheims, a Berkshire jeweler, said during a talk last week . in Omaha.
Dan Sheridan, CEO of Brooks Running, a running shoe maker owned by Berkshire, said Abel advises his executives broadly but keeps an eye on the bottom line.
“If there are warts on your balance sheet, he will find them,” Sheridan said in an interview.
Even Buffett admitted on Saturday that Abel is a tough boss.
“We haven't had a history of being very tough on people who fall by the wayside, and we've had a few who have,” Buffett said. “Greg will do something about it, but neither Charlie nor I.”
TRANSITION IN PROCESS
Under Berkshire's succession plan, Abel will replace Buffett in making all major investment and capital allocation decisions. Vice Chairman Ajit Jain, who joined Berkshire in 1986 according to Berkshire's website, will oversee the insurance operations.
Buffett said Saturday that he would like Abel to have the final say on decisions about Berkshire's public stock portfolio.
“I would leave the capital allocation to Greg,” Buffett said on Saturday. “He understands companies extremely well, and when you understand companies, you understand common stocks.”
The transition “has already begun because Warren transferred these responsibilities directly to Greg and Ajit five years ago,” said Adam Mead, the CEO of Mead Capital and author of “The Complete History of Berkshire Hathaway.”
Buffett indicated on Saturday that his subordinates are already taking on much more daily responsibility.
“The number of calls I get from managers is virtually zero and Greg handles them,” Buffett said. “I don't know exactly how he does it, but we have the right person, I can tell you that. That.”
(Reporting by Koh Gui Qing in Omaha; additional reporting by Jonathan Stempel; Editing by Megan Davies and Diane Craft)
