Investors have speculated in recent years that Warren E. Buffett could eventually retire. But the 94-year-old billionaire surprised many on Saturday when he announced he was planning to step down as Berkshire Hathaway's chief executive in nearly 60 years later.
It's no surprise that he said he intended to take over him as the leader of the $1.1 trillion conglomerate he built.
Who is Greg Abel?
Since 2018, Abel, 62, is the vice-chairman of Berkshire's non-insurance company and is the 189 operating company, including the country's largest BNSF railway. Berkshire Hathaway Energy, a huge power utility. Restaurant chains and retailers such as Dairy Queen and the Borsheims Jewelry chain. Consumer brands such as Fruit of the Room underwear, Brooks running shoes, and Justin boots. Net Jet, Private Jet Service. more.
Abel's enormous responsibility came after a steady rise in Berkshire ranks. The Edmonton, Alberta native and a training accountant joined the conglomerate in 2000 when Buffett bought a control shares in Central American Energy, where he was president.
Abel was appointed Berkshire's vice-president in 2018 and painted him as Buffett's successor in 2021, which he confirmed.
Aside from his work experience, Abel is known for his love of hockey that he played as a child. He is a volunteer coach for Des Moines' son's team, where he lives and is home to Berkshire Hathaway Energy.
Why did he nod?
A relatively poor Mr Abel has earned praise from Mr Buffett and others of Berkshire Orbit over the years for two important qualities.
The first is his management expertise. He led a series of acquisitions that were transformed into Central America in 2014, renamed Berkshire Hathaway Energy, to major power producers. Since his promotion in 2018, he has overseen a much broader collection of businesses that have reported operating revenues of over $5 billion in the first three months of the year.
Mr. Buffett praised his heirs as an effective executive whom he trusted to make big decisions. By 2023, Buffett told CNBC that Abel “does all the work and I'll take all the bows.” The billionaire added, “He's a huge improvement for me, but don't tell anyone.”
Abel's other quality is that he is considered to fit the Berkshire style. He became a more serious candidate in 2011 to take over the conglomerate. In 2011, former Central American boss David Sokol, known as Buffett's chief fixer, resigned. Berkshire had concluded that Sokol violated the company's policies by purchasing approximately $10 million in shares in Lubrizol, a manufacturer of specialized chemicals, while coordinating the company's acquisition.
However, Abel is considered to be cut from a similar fabric to Buffett. “Greg maintains culture,” Berkshire vice-chairman and longtime business partner Buffett told shareholders at the company's 2021 annual meeting. The comments quickly sparked speculations of succession, and Buffett confirmed it a few days later.
Abel has taken on more civil servants in recent years. This involves sitting with Buffett for hours at Berkshire's annual meeting to answer investors' questions.
How is Abel expected to run Berkshire?
Buffett has made a name for himself as one of the most successful stock pickers of all time, but the strength of his successor lies in running his business. It partly reflects what Berkshire is today. This is an empire of companies that often employ more than 392,000 workers.
Abel is not expected to choose a company that will join Berkshire's investment portfolio. The company already has two executives, Todd Combs and Ted Weschler. But he oversees the kind of large deal the conglomerate can possibly uniquely hit, given the $347.7 billion cash it sits on. (Buffett calls it his “elephant gun.”
But it will bring about a huge challenge. For years, Buffett has not made such an acquisition. And he acknowledges that Berkshire is so big it is difficult to find an acquisition target that is large enough to significantly increase revenue.
