Berkshire has four managers “who are capable of being CEO,” the Omaha, Nebraska-based company said today in its annual report to the U.S. Securities and Exchange Commission, without listing names. A year ago, the company said there were three candidates to replace Buffett.
“He’s trying desperately to avoid the consequences of a runoff” by withholding the names, said Thomas Russo, a partner at Gardner Russo & Gardner, who has about 10 percent of his $4 billion under management invested in Berkshire. The secrecy is designed “to try to ensure that the best people that are with him stay with him, even though one alone will likely be anointed the CEO.”
Berkshire is preparing for the eventual departure of Buffett, 80, by hiring investment manager Todd Combs to help run the company’s portfolio and by seeking to simplify the ownership of its Wesco Financial Corp. subsidiary. The board has agreed on a successor “should a replacement be needed currently,” according to the filing.
“The board’s succession plan, together with the outstanding managers running our numerous and highly diversified operating units,” help prepare the company for Buffett’s eventual departure, according to the filing.
Sokol, Jain, Rose
Buffett, in his annual letter on Feb. 26, praised Berkshire managers including energy executives David Sokol and Greg Abel, reinsurance lieutenant Ajit Jain, Geico car insurer CEO Tony Nicely, and Matt Rose, who leads the railroad that Buffett acquired last year in his biggest takeover. Buffett also cited Grady Rosier, who heads the McLane food distribution business, and Vic Mancinelli who leads CTB Inc., a farm-products business.
Buffett, who also leads the board, has said his son Howard, a farmer and author, would safeguard Berkshire as non-executive chairman.
“Investors can be “sure that the principles we have employed to date in running Berkshire will continue to guide the managers who succeed me and that our unusually strong and well- defined culture will remain intact,” Buffett said in the letter. “Lest we end on a morbid note, I also want to assure you that I have never felt better.”Share Investor LinksDownload the 2010 Berkshire Hathaway Annual Report
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