Even though Greg Abel will never be able to top Warren Buffett, Berkshire Hathaway’s board of directors is certain that he will be the ideal man to steer the company into the future.
At a conference held two days before Berkshire’s annual shareholders meeting, longtime board member Ron Olson assured investors that Abel is familiar with all of Buffett’s guiding principles, including allowing Berkshire’s firms to operate independently. Furthermore, he assured that Abel would be devoted to the conservative management of Berkshire to safeguard the reputation of the financially strong firm.
Even when the 93-year-old Buffett steps down, Olson is certain that company owners will be eager to sell to Berkshire. Olson said that business owners thinking about selling could see all the great connections Berkshire maintains with its subsidiaries.
Olson said that Berkshire has enough resources to execute transactions since the company is sitting on over $167 billion in cash.
Although there are signs that Buffett’s replacement would not have as much freedom as Buffett has had, the board is not likely to restrict Abel’s ability to make purchases.
To replace Buffett’s late longtime business associate Charlie Munger, who died last autumn, Abel, although he prefers to stay out of the spotlight, will spend hours at Saturday’s shareholder meeting fielding questions alongside Buffett.
According to Olson, Abel can analyze a company’s financial statements as fast and accurately as Buffett. He has also found that people like working with him because he is a good listener.
A shift in Berkshire’s shareholder base toward activist and index investors will put pressure on the company after Buffett’s death. If Berkshire cannot find a suitable use for all of that wealth, investors could demand that the company start a dividend payment policy.
Olson said that although the board hasn’t completely disregarded the possibility of paying a dividend in the future, it is also not seriously considering sanctioning one at this time while Buffett is still the chairman.
Buffett will not be departing from Berkshire Hathaway. Even though Buffett will eventually hand responsibility to Greg Abel, he is still very much connected with and dedicated to the business.
