Everyone knows Warren Buffett The successor of will not be able to compete with the legendary investor, but Berkshire Hathaway The board remains convinced that Greg Abel is the right person to one day lead the conglomerate into the future.
Ron Olson, a longtime Berkshire board member, told investors gathered Thursday at a conference two days before the company’s meeting. annual meeting of shareholders that Abel understands all the fundamental principles that guided Buffett, like letting Berkshire’s companies manage themselves. And Abel will be committed to leading Berkshire in a conservative manner that will protect the company known for its financial strength, he said.
“Greg is not someone who is going to be as likely to create the kind of following in the press that Warren, I think, has had,” Olson said. “On the other hand. I have every reason to believe that he will run the companies we are responsible for in the same way that Warren ran them.”
Olson said he is confident that business owners will still be willing to sell their companies to Berkshire once the Canadian utility executive takes over after the departure of 93-year-old Buffett.
Olson said he wasn’t thinking about last year’s public legal fight with the billionaire Haslam family over how much Berkshire would ultimately pay for the project. last 20% of the Pilot truck stop chain that the family agreed to sell to Buffett will also have a chilling effect on future deals. The Haslams and Berkshire accused each other in an attempt to manipulate Pilot’s profits to influence the final price of $2.6 billion.
Business owners considering selling can see all of the positive and respectful relationships Berkshire has with its dozens of other subsidiaries on display in the 200,000 square foot showroom adjacent to the arena where the meeting will be held. Saturday, Olson said.
In fact, the legal battle gave Olson, a partner at Berkshire’s top law firm, the opportunity to work closely with Abel, giving him even more confidence in the board’s chosen successor.
“I could tell you that his preparation and his thinking were impressive. He is strategic in his thinking. And he is decisive in his judgment,” Olson said.
Additionally, Berkshire has more than $167 billion in cash, so it has ample resources to make deals and, Olson said, “people generally like to be paid in cash.”
Abel, who keeps a low profile and doesn’t usually grant interviews, will answer questions alongside Buffett for hours on Saturday, trying to help fill Buffett’s role. long-time partner Charlie Munger detained for decades before dying last fall. Abel has overseen all of Berkshire’s non-insurance businesses for several years, while another vice president, Ajit Jain, oversees the insurance businesses, including Geico and General Reinsurance.
Olson said Abel is a numbers guy who can analyze a company’s balance sheet as quickly and as well as Buffett, and he’s also a great listener who people enjoy working with.
But, Olson said, “Greg won’t be as entertaining as Warren and Charlie have been over the years.”
Munger’s absence will therefore be felt hard on Saturday by the thousands of people present at the meeting. There is simply no way to replace the expertise, advice and friendship that Munger offered Buffett for more than six decades.
Professor Lawrence Cunningham, who has written several books about Berkshire, said he believed that even with Munger’s profound loss, the company he helped build would endure.
“The chair is empty. There is no way to fill it. But I’m also confident that Warren – and especially Greg and Ajit – will take up the mantle,” Cunningham said.
Berkshire has grappled with succession questions for decades, but Cunningham said he believes Buffett and Munger have built an organization bigger than themselves and one that will last.
Olson said Berkshire’s board knew there simply wasn’t another Warren Buffett or Charlie Munger to replace these two men.
After Buffett’s death, Berkshire will face pressure as the shareholder base evolves to include more index and activist investors. One thing investors might demand is that Berkshire change its long-standing policy and start paying dividends if it can’t find a good use for all that money.
Olson said the board isn’t ruling out paying a dividend at some point in the future, but it’s also not seriously considering approving one now, with Buffett still at the helm.
