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Berkshire Hathaway’s board of directors has voted unanimously to appoint Greg Abel as chief executive, with Warren Buffett remaining chair of the group he built from almost scratch into a $1.2tn conglomerate.
Omaha-based Berkshire said on Monday that its board had voted on Sunday, hours after the 94-year-old Buffett told shareholders at the group’s 60th annual meeting that he would hand over the reins to Abel.
Abel, who Buffett began lining up as his successor in 2021, will take over as chief executive on January 1, Berkshire said in a statement.
Buffett said on Saturday that “he would still hang around and could conceivably be useful in a few cases” but had not made clear that he would stay on as chair.
Berkshire, which began as a medium-sized textile business that Buffett took over in 1965, now makes much of its money from its vast insurance business, which includes companies such as Geico, as well as myriad other companies in industries from aerospace manufacturing and railways to chocolate shops.
Abel joined Berkshire as part of the company’s acquisition of a mid-sized utility business. He was instrumental in a series of acquisitions that turned the group into a giant, and is currently vice-chair of its non-insurance operations.
His job as chief executive will be to lead Berkshire into a new era without the investing genius of Buffett or his late partner Charlie Munger at his side.
Abel has brought a more hands-on approach to his role than Buffett, who was known to give subsidiaries a wide remit to conduct their operations.
But Abel’s management experience, including his work for decades in the energy business, is seen as a key attribute as Berkshire looks to grow its operating profits from a panoply of disparate divisions.
Cathy Seifert, an analyst at CFRA, said Abel brought “strong operational skills”. He had signalled to “shareholders that the company’s investment philosophy will not change under his leadership and that his focus will be on maintaining Berkshire’s ‘fortress’ balance sheet”, she added.
Buffett said last year that he believed Abel should also be charged with overseeing Berkshire’s investment portfolio, which includes its stakes in American Express, Coca-Cola and Apple.
Investors have not yet had much evidence with which to gauge Abel’s talent as an investor, and it is unclear if he will rely on two other investment professionals currently employed at Berkshire.
Abel is not expected to head up the board when Buffett eventually steps down. Buffett has named his son Howard as his eventual successor as chair. His daughter Susie is also a director.
Shares in Berkshire, which hit a record on Friday, were down 3 per cent in pre-market trading on Monday.
