Everyone knows Warren Buffett The successor to the Legendary Investor will not be able to keep up with the Legendary Investor, however Berkshire Hathaway The company's Board of Directors remains confident that Greg Appel is the right man to lead the group into the future.
Ron Olson, a longtime Berkshire board member, told investors gathered Thursday at a conference two days before the company… Annual shareholders meeting And that Abel understands all the basic principles that have guided Buffett, such as allowing Berkshire's companies to largely run themselves. He said Appel would commit to running Berkshire in a conservative way that would protect the company known for its financial strength.
“Greg is not someone who is likely to create the kind of following in the press that I think Warren had,” Olson said. “On the other hand. I have every reason to believe that he will run the companies for which we are responsible the same way Warren ran them.”
Olson said he is confident business owners will still be willing to sell their companies to Berkshire once the Canadian utility executive takes over after the 93-year-old Buffett's departure.
Olson said he didn't think so last year Public legal battle With the family of billionaire Hassan about how much Berkshire will eventually pay for last 20% A series of experimental truck stops that the family agreed to sell to Buffett would be a deterrent to future deals as well. Both Haslams and Berkshires Accused Each other tries to manipulate Pilot's profits 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 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, a partner at Berkshire's main law firm, the opportunity to work closely with Appel, giving him more confidence in the board's chosen successor.
“I can tell you his preparation and thinking has been impressive. He is strategic in his thinking. And he is decisive in his judgment,” Olson said.
In addition, Berkshire has more than $167 billion in cash, so it has enough resources to make deals. “People generally like to be paid in cash,” Olson said.
Appel, who keeps a low profile and does not typically grant interviews, will answer questions alongside Buffett for hours on Saturday, in an effort to help fill the role Buffett occupies. Longtime partner Charlie Munger He held for decades before his death last fall. Abel has been overseeing all of Berkshire's diverse non-insurance businesses for several years while the other vice chairman, Ajit Jain, oversees the insurance businesses, including Geico and General Reinsurance.
Abel is a numbers guy who can quickly analyze a company's balance sheet as well as Buffett, and he's a great listener who people love working with, Olson said.
But, Olson said, “Greg won't be as entertaining as Warren and Charlie have been over the years.”
Munger's absence will therefore be keenly felt on Saturday by the thousands of people who will attend the meeting. There is simply no way to replace the experience, advice and friendship that Munger provided Buffett for more than six decades.
Professor Lawrence Cunningham, who has written several books about Berkshire, said he believed that even with Munger's devastating loss, the company he helped build would survive.
“The chair is empty. There's no way to fill it. But I'm also confident that Warren — and especially Gregg and Aggett — will carry the torch,” Cunningham said.
Berkshire has been grappling with succession issues for decades, but Cunningham said he believes Buffett and Munger have built an organization larger than themselves that will endure.
Olson said Berkshire's board knows there is no other Warren Buffett or Charlie Munger to replace those two men.
After Buffett's death, Berkshire will face pressure as its shareholder base evolves to include more index investors and activist investors. One thing investors might ask is for Berkshire to change its long-term policy and start paying dividends if it can't find a good use for all that money.
Olson said the board had not ruled out paying a dividend at some point in the future, but it also did not seriously consider approving a dividend now with Buffett still at the helm.