Berkshire Hathaway Inc. Vice Chairman Hints To A Two Horse Race For Warren Buffett Successor

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Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) might have dropped the biggest of hints of who is to succeed longtime CEO Warren Buffett, when he decide to step down. Giving his annual report, Buffett reiterated that the Berkshire Hathaway board had found the right person for the top post without identifying the person.

With a penchant for deal making, Greg Abel, who heads Berkshire Hathaway’s Energy division, which accounts for 21% of the conglomerate revenue, is at their forefront to replace Buffett when he calls it quits. Abel comes into the frame with a University of Alberta Business degree and a hockey connection.

In a letter to shareholders, vice chairman Charlie Munger, gave the clearest of indications that Indian-born, 63-year-old Ajit Jain is also in the framework to become the CEO of the $365 billion corporation.

Buffett has reportedly been molding Mr. Abel for the top post, having allotted him the biggest of responsibilities, to manage a whopping $6.5 billion of the company’s energy division. Abel’s track record remains extremely successful according to Bruyette & Woods analyst, Meyer Shields, even though he will have to adjust a little bit if he is to move to a larger role.

Deal-making skills essentially put Abel ahead of the park for the top post, having sealed a number of high profile deals in his illustrious career. Buffett has relied on acquisitions as a critical piece of Berkshire growth, with the same model expected to be maintained going forward.

The acquisition of Calgary-based electricity transmission provider, Altalink LP for $3.1 billion and the $6.5 billion purchase of NV Energy, continue to cement Abel’s credentials in the race for the top post

Abel is to face stiff competition from Jain, who runs the Berkshire Insurance business, which generates capital for running other units. Jain, in some ways, symbolizes Berkshire growth over the years, from a struggling textile maker to a $365 billion empire. Indian-born, Jain joined Berkshire in 1986 leading the holding firm’s push into property-casualty reinsurance.

Mr. Shields, however, believes Abel might be the frontrunner, because Berkshire would not want to disrupt the insurance operations that are under the care of Jain. Another clear indication that Abel is at the forefront is Mr. Buffet bumping up his compensation package to $27 million from $10 million as a sign of his value to Berkshire.

Speculation over the new CEO is sure to continue, and whoever lands the task to lead the company to the future will have the unenviable task of being compared to the most successful investor of all time.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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