OMAHA, Neb. (AP) — Everyone knows that Warren Buffett’s successor will be no match for the legendary investor, but Berkshire Hathaway’s board remains confident that Greg Abel is the right person to one day lead the conglomerate into the future.
Longtime Berkshire board member Ron Olson told investors gathered Thursday at a conference two days before the company’s annual shareholder meeting that Abel understands all the fundamental principles that guide Buffett, such as letting Berkshire companies run themselves largely alone. And Abel will commit to running Berkshire in a conservative way that will protect the company, which is known for its financial strength, he said.
“Greg is not someone who is going to be as likely to develop the kind of following in the press that I think Warren has,” Olson said. “On the other hand. I have every reason to believe that he will manage the companies we are responsible for in the same way that Warren has managed them.
Olson said he is confident business owners will still be willing to sell their companies to Berkshire once the Canadian utilities executive takes over after Buffett, 93, is gone.
Olson said he doesn’t think last year’s public legal battle with the billionaire Haslam family over how much Berkshire will ultimately pay for the final 20 percent of the Pilot truck stop chain that the family agreed to sell to Buffett will either a deterrent to future transactions. Both the Haslams and Berkshire accused each other of trying to manipulate Pilot’s earnings to influence the final price of $2.6 billion.
Business owners considering a sale can see all the positive and respectful relationships Berkshire has with its dozens of other subsidiaries on display in the 200,000-square-foot exhibit hall adjacent to the arena where Saturday’s meeting will be held, Olson said .
In fact, the legal battle gave Olson, who is a partner at Berkshire’s main law firm, the chance to work closely with Abel, giving him even more confidence in the board’s chosen successor.
“I can tell you that his preparation and mindset was impressive. He is strategic in his thinking. And he’s decisive in his judgment,” Olson said.
Berkshire also has more than $167 billion in cash, so it has plenty of 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 give interviews, will answer questions alongside Buffett for hours on Saturday, trying to help fill the role that Buffett’s longtime partner, Charlie Munger, filled for decades before he died last year. autumn. Abel has overseen all of Berkshire’s diverse non-insurance businesses for several years, while another vice chairman, Ajit Jain, oversees the insurance businesses, including Geico and General Reinsurance.
Olson said Abel is a numbers guy who can analyze a business’s balance sheet as quickly and well as Buffett, and is also a great listener who people enjoy working with.
But Olson said, “Greg isn’t going to be as funny as Warren and Charlie have been over the years.”
So Munger’s absence will be keenly felt on Saturday by all the thousands of people attending the meeting. There’s 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 thought even with Munger’s deep loss, the company he helped build would endure.
“The chair is empty. It cannot be filled. But I’m also confident that Warren – and especially Greg and Ajith – will carry on the torch,” Cunningham said.
Berkshire has wrestled with succession issues for decades, but Cunningham said he believes Buffett and Munger have built an organization bigger than themselves that will endure.
Olson said Berkshire’s board knows there simply isn’t another Warren Buffett or Charlie Munger to replace those two men.
After Buffett’s death, Berkshire will face pressure as the shareholder base evolves to include more index investors and activists. One of the things investors might want is for Berkshire to 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 hasn’t ruled out paying a dividend at some point in the future, but also hasn’t seriously considered approving one now that Buffett is still at the helm.
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