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Berkshire Hathaway was long enough to notice the heavy investor. Charlie Munger and Warren Buffett they were sparring whether Berkshire – a $ 631 million conglomerate that oversees it – could never be too big to manage.
“Greg will keep the culture going,” Munger, the 97-year-old chief executive, said back and forth. It was an observation that Buffett lost pace very briefly.
Greg Abel is a 58-year-old attorney from Berkshire who oversees the company’s uninsured investments. These included the Burlington Northern Railroad, an extensive manufacturing business, and utilities that he once ran as chief executive. He is also one of two men who usually take charge of Buffett for a day.
While management has come up with an inheritance plan, the heir has been saved from the rest of the world. It’s a secret that has fascinated Berkshire shareholders for at least a decade and is one of the biggest problems the company has had with Munger and Buffett’s ages. Buffet will turn 91 this August.
On Saturday, investors looked at Buffett’s two top lieutenants: Abel and his colleague Ajit Jain.
On stage, the pair met Buffett and Munger at the annual meeting, asking questions and defending strategies. Abel spent most of his time advocating for renewable energy investments in Berkshire and why the company did not have to accept the shareholder proposal that should inform its companies of the measures they are taking in the face of climate change.
Ed Walcza, Vontobel’s portfolio manager, was among the investors who noticed Munger’s comment, who arrived late at three-and-a-half-hour questions a day. He said it’s interesting that the answer surfaced when Munger and Buffetti weren’t asked who would take it directly.
“It was good news with Greg that he had answers in his tongue. There was no doubt or ambiguity in his answers,” he said. “Whether Charlie is right, the culture can be repeated.”
Abel had a senior role on Saturday after a while slow display when he entered a dark annual meeting with Buffett the previous year and gave his boss a supporting role. This year he has offered reflections on the inflationary pressures affecting Berkshiri purchase battle for competitor Kansas City Southern train operator, as well as how he spends his days at work.
Greg Abel Warren Buffett is one of the two men to receive the ninth most © Bloomberg
“I’m trying to understand what our competitors are doing, what the key risks are about these businesses, how they’re going to be disrupted,” he said. “Does it always come with the risk that we’re distributing our capital properly in these businesses?”
James Shanahan, an analyst at Edward Jones, said Abel was found to be a “very capable” executive and that the meetings benefited him and his presence. The couple provided information about an area that investors have complained about: how the company’s underlying operating business operates.
Given the Berkshire gaming book, which has no active relationship function with investors, Greg was welcome to share information and transparency, ”said Cathy Seifert, an analyst covering CFRA Research.
There were Abel and Jain Promoted in 2018 to the company’s vice presidents, consolidating him as a CEO and becoming one of Berkshire’s most impressive executives along with Todd Combs and Ted Weschler, who help manage Berkshire’s investment portfolio. Buffett said in his time that promotions were “part of a succession movement.”
But he has a plan for Buffett’s succession drawn fire by the hand of some large shareholders. BlackRock voted against Walter Scott’s chairman of the board this year, citing, among other things, “limited disclosure about inheritance planning”. Buffett’s great leadership in Berkshire has led to an even greater risk of succession, BlackRock said.
“There’s this game in a row,” Seifter said. “From Berkshire’s point of view, the problem has been solved and paraphrased. . . They have Greg. “
Abel or one of his contemporaries will face challenges when they inherit Berkshire, even if the company does not change immediately. Buffett intends to donate the majority of his wealth, which is primarily held in Berkshire Hathaway’s Class A shares. When these shares are converted to Class B and sold to new investors, the group may be subject to greater shareholder pressure and may conduct an entrepreneurial analysis, Seifter said.
Buffet himself has accepted that point. 2019 he said “There is no eternity” and Berkshire “deserves to continue on its own.”
The pressure is already on. This year, investors have become increasingly frustrated with Berkshire’s efforts to change climate. The shareholders ’proposal to report on climate change garnered about 25% of the vote, which denies Berkshire widespread support for investors in taking action. Buffett’s Class A shares are 10,000 times larger than the Class B common share share held by the general public.
Major holders of this Class B share, including BlackRock and Norges Bank, voted in favor of the proposal.
“The remaining shareholders who voted in favor of the resolution sent a strong message to the company about the importance of recognizing climate risk,” said Dan Bakal Ceres ’director of permanent investor networks.
Shanahan added that Buffett’s stake distorted the voting result, but that over time the change in the shareholder base would leave a mark on the company. “I think he threw water in the can, but it’s inevitable that investors and other interest groups will be asked to report on the progress.”
Buffett spent part of Saturday defending how the company ran during the crisis and advising shareholders in Berkshire to vote against shareholder proposals from two shareholders. In a special way, he also joked about the two nineties above.
“People are talking about aging management in Berkshire,” he said. “I always assume that when they say that they are talking about Charlie. But I would like to point that out in another three years [when Munger turns 100]Charlie will age 1 percent a year. No one is less old than Charlie. “
Additional news from Patrick Temple-West
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