Warren Buffett chose the last minute of his sixty meeting for shareholders to drop a long -awaited announcement that was still completely surprising to his fans, most of his board of directors and even behind him.
Buffett, 94 -year -old architect, and directed the Hathaway Company, that the assembly will be the last president of the company that he built from modest beginnings to one of the most valuable institutions in the world. A few meters away, Greg Abel, the energy director, who has long been seen as the Crown Prince, was not aware that his time has come.
Buffett will deliver BEHEMOTH Keys worth $ 1.2 trillion, as he led a group of stocks such as Apple Inc. And American Express Co. At the top of a group of insurance, energy, railway and consumers regularly 10 billion dollars a quarter in the field of operation. The 62 -year -old will inherit a large number of questions, starting with what he will do with a cashme of approximately 350 billion dollars, after Bavite sat large in the past few years in the market.
The shareholders will want to know how ABEL changes the privacy of the company and the lean C-SUITE, whether it will bring different preferences for risks or industry preferences, and if the company will remain the first invitation for companies that need a large check and vote of confidence. They will even wonder about the future of the annual meeting itself, the so -called Woodstock of the capitalists who attracted Acolytes from all over the world based on the wisdom and intelligence of Buffett and its late commercial partner.
“People love Warren because he has a certain charm,” she said.Snow Ball: Warren Buffett and life worksThe billionaire biography, which is the necessity of reading it for its fans and helped to advance his fame. “Rectement this is almost impossible.”
While a few of them expect that ABEL will match the famous Buffett and Lights, the departure of the tallest executive at the S&P 500 also opens deeper questions about the type of pressure that he may one day bear in his absence.
Berkshire does not pay profits and only started buying shares, as Buffett depends on its busy record to show that it can double the shareholders ’money at a better rate than the broader markets it offers.
Berkshire has reached such a weight – with approximately 400,000 employees – and has many different companies discussed by some observers over the years whether they may be dismantled after the pavite papers.
ABEL has confirmed that it will follow the principles that Buffett set in investment and risk management. Pavit said he would remain a major contributor.
There is one thing, “will investors have to surpass the idea: Is the inventory of the Hathaway Berkshire worthy of the Pavite premium still when Buffett is no longer there?” Cathy Severt, an analyst at CFRA Research. “There can be a laundry menu with some institutional investors that include payment of cash profits, and the most regular capital customization program.”
Power deal maker
ABEL joined Berkshire Hathaway by acquiring.
The Canadian CEO, who started his career as a computer account, joined the PRICEWATORHOSECOOPERS company later to the Calenergy Energy Company in 1992 as an observer.
David Sokol, CEO of Calenergy at the time, had business building aspirations through acquisition and talents at ABEL. In 1996, ABEL was sent to operate an electric tool in the UK bought by the company. Calenergy made a deal in 1998 to buy Midameric Energy, a tool in Iowa, and adopted its name.
Berkshire obtained a controlling stake shortly after a period, enabling the company to go to the acquisition boom, and extract the pipelines in the wake of the bankruptcy of Enron Corp and electrical facilities in the northwest of the United States.
In 2008, Sukol played a wider role in Berkshire, and Abel was appointed CEO of Midamerican. Buffett had reservations about whether he could find deals and negotiate them, according to Suucul.
Sukol said in an interview with him in 2014: “I knew the answer to that, because he participated in every acquisition that we did, and he dealt with two of them on their own,” Sukole said in an interview with him in 2014. “I think Warren and some of our board members were not sure just because they did not test him with him.”
Within months, ABEL showed its slices. In September 2008, Midamerican agreed to pay about $ 4.7 billion to buy Constellation Energy Group Inc. After the Baltimore Energy Company has lost half its market value per week. Berkshire recorded more than a billion dollars of separation fees and profit for its investments after a constellation turned into another address.
Other ABEL deals have proven long. In 2013, he bought the largest electric benefit in Nevada, NV Energy, and the following year ABEL agreed to purchase an electric transport company in his home in Alberta. The name Midamerican was later changed to Berkshire Hathaway Energy in 2014 to closely align the brand with the reputation and values of Buffett during his decades’ career.
The expansion of the establishment of a sprawling American facility company, while keeping the spotlight in states such as Iowa and Nevada and operation of natural gas pipelines that run about 14,200 miles across the country, from Texas to Michigan.
This helped him to gain the reputation of Maher CEO, and in the end, Buffett’s confidence. In 2018, he was promoted to the Vice President, and his supervision expanded all the operations of the non -insurance Berkchires, an adapter on the BNSF railway operator to the famous dessert maker See See.
It was announced as a successor in the year 2021, after Munger left at the annual meeting of Burkshire that ABEL will maintain a sound conglomeration culture after Buffett.
Since its promotion, the operating profits – with the exception of insurance on a few other elements – have switched by about 27 % to about 22 billion dollars last year.
Now, what remains to see is the acumen of investment. Todd Combs and TED Weschler were set in 2010 and 2011, respectively, to help the Holdings and Bond Holdings management in Berkshire. Since then, COMBS has taken the control of the Geico Insurance Unit. Both of them have advised Pavite on possible acquisitions and may do the same for ABEL.
“Greg is the business leader, he is not responsible for investment,” said Schroeder. “This will be one of the biggest challenges he faces and the Board of Directors.”
A cash group handed about $ 350 billion for investment, the CEO has no rich record in choosing shares. During the meeting on Saturday, he was asked about the capital allocation strategy when he takes responsibility. He described the pile of money as “enormous origins” and pledged to continue. But his approach to the answer was not what Berkshire used to.
“He has struggled in this question,” said Cole Samaid, one of the shareholders of Berkshire Hathaway.
Samid said: “I thought like Charlie Warne, he was looking back earlier in his life and telling a story about something he had faced in investing,” said Samid. “He did not.”
This story was originally shown on Fortune.com
