Greg Abel, an Edmonton executive who is obsessed with hockey and who avoids the spotlight, has been asked to run Berkshire Hathaway Inc. and succeed Warren Buffett, one of the most successful investors in US business history. United.
Mr Buffett revealed the succession plan in an interview with CNBC, which broke the news on Monday.
The Edmonton Oracle: meet the Canadian who could succeed Warren Buffett
Buffett’s alleged heir Abel will face a thankless task: what to do with Berkshire Hathaway’s silver mountain
“The administrators agree that if anything happened to me tonight, it would be Greg who would take over tomorrow morning,” he said.
The comment ends years of intense speculation about who would replace Mr Buffett, 90, an investment legend who has turned Berkshire Hathaway into a sprawling conglomerate worth more than $ 630 billion since he began leading it in 1965. Mr. Buffett, president and chief executive officer, has not indicated when he might step down from either of his roles.
The casual nature of the announcement surprised some observers. A comment from Berkshire Hathaway vice chairman Charlie Munger, 97, at the company’s annual general meeting over the weekend fueled speculation that a successor had been chosen. When discussing whether the company is too big to run and its structure decentralized, Mr. Munger said, “Greg will keep the culture.”
The seemingly offhand remark may have prompted Mr. Buffett’s subsequent comments. “I suspect Buffett reluctantly made this disclosure,” said James Shanahan, analyst at Edward Jones. “It seems to me that this was an important development and warranted a more formal announcement.”
Berkshire Hathaway spokeswoman Jessica Strawn declined to comment further on Mr Buffett’s remarks, and also declined on behalf of Mr Abel.
The Canadian executive has been considered a top candidate since at least 2018, when he was appointed vice president and responsible for the company’s non-insurance operations. Another Berkshire Hathaway executive, Ajit Jain, was promoted at the same time and oversees the insurance business. “If, God forbid, anything happened to Greg tonight, then it would be Ajit,” Buffett told CNBC.
Those who know Mr. Abel describe him as a sympathetic workaholic with an appetite for details and the ability to develop a long-term strategy. He has also built an experience of successful acquisitions. Mr. Abel is a private person who rarely gives interviews, but hockey is one of his passions. (His uncle was Sid Abel, who played for the Detroit Red Wings from 1938 before providing commentary on television.)
Mr. Abel’s low-key style is markedly different from that of his boss. He is unlikely to dispense with folk wisdom or shareholder serenade while strumming a ukulele, for example.
Born in 1962 in Edmonton, he received a Bachelor of Commerce degree from the University of Alberta and worked as an accountant for PricewaterhouseCoopers in the city before moving to San Francisco.
He then joined the accounting team of a geothermal power producer called CalEnergy Co., which was a client of PricewaterhouseCooper. Mr Abel rose through the ranks at CalEnergy, working as a controller for one of its power plants before moving to the UK to oversee a subsidiary.
The company was later renamed MidAmerican Energy Holdings Co. and sold to Berkshire Hathaway in 2000. At that time, Mr. Abel was President of MidAmerican and had moved to Des Moines, Iowa. Although he avoids attention, he leads an active social life. He and his wife were known in Des Moines for hosting an annual Thanksgiving event at their home and have become regulars at the Iowa State Fair.
This kindness has proven to be invaluable in his career. MidAmerican operated in a regulated industry and required it to work with a range of elected officials. Along with David Sokol, CEO of MidAmerican, Mr. Abel made dozens of acquisitions and increased the value of the company’s assets from $ 3.8 billion to $ 47.7 billion in 2011. Mr. Abel is became CEO in 2008 and continued its series of acquisitions, including the US $ 2.7 billion Purchase of Alberta transmission provider AltaLink LP in 2014.
The energy division, now called Berkshire Hathaway Energy, had assets of some US $ 92 billion in 2018. In that year, Mr. Abel was named vice chairman and appointed to the board of directors of Berkshire Hathaway , with Mr. Jain.
“It’s part of a movement towards succession over time and those are the two key people,” Mr. Buffett said at the time. He also denied that there was a “horse race” between the two men.
Mr Abel was considered the most likely successor as he is ten years younger, which Mr Buffett acknowledged in his interview with CNBC. “The likelihood of someone having a 20-year-old lead, however, makes a real difference,” he said.
Since 2018, Mr. Abel has taken a more active role in Berkshire Hathaway’s many subsidiaries, which include Dairy Queen, Duracell, Fruit of the Loom and BNSF Railway. He also sits on the board of directors of Kraft Heinz Co., in which Berkshire Hathaway has a significant stake.
Taking over Berkshire Hathaway will not be an easy task. There’s the pressure of having to live up to Mr. Buffett’s reputation, the heavy-handed nature of a company with more than 360,000 employees in disparate industries, and the challenges of generating returns for shareholders and doing business. grow an already massive entity. (Since 1965, the company’s book value has grown at a compound annual rate of nearly 19 percent, according to Mr. Shanahan, but has slowed to less than 12 percent over the past decade.)
The company has also been criticized for its executive compensation practices. Institutional Shareholder Services noted that Mr. Abel received US $ 16 million and a bonus of US $ 3 million in 2020, and said it was not clear whether compensation was performance-related.
Some shareholders are pushing Berkshire Hathaway for greater disclosure about the risks climate change poses to its business. A more detailed disclosure proposal was rejected at the AGM, however, while Mr Abel defended Berkshire Hathaway’s action on climate change. “If you look at our investment until the end of 2020, we’ve invested… over $ 30 billion in renewable energy, and completely changed the way our companies do business,” he said.
Should Mr. Abel become CEO, analysts predict he would be in charge of operations and capital deployment, while one or more executives oversee Berkshire Hathaway’s investment portfolio, which includes stakes in Apple Inc. and Coca-Cola Co., Mr Buffett’s son Howard, meanwhile, is expected to take on the role of non-executive chairman.
Those who know Mr. Abel believe he is up to the challenges. “Greg Abel is one of the best business leaders I have met,” said Mr. Sokol, himself a former executive at Berkshire Hathaway and a friend of Mr. Abel. “Shareholders are very fortunate to have a proven young leader, such as Greg, available when such a transition is required.”
Mr. Shanahan added, “We are very comfortable with the future leadership of the company.”
Your time is precious. Get the Top Business Headlines newsletter delivered to your inbox in the morning or evening. register today.