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Buffett succession gains clarity as Berkshire promotes Abel, Jain


By Jonathan Stempel

(Reuters) - Inc on Wednesday promoted two of its top executives, and Ajit Jain, adding them to its board and cementing their status as the front runners to succeed atop the conglomerate.

Abel, 55, the officer of Energy, was named Berkshire's vice chairman for non-operations, while Jain, 66, Berkshire's top executive, was named operations.

Buffett, 87, remains chairman and of the roughly $500 billion conglomerate he has run since 1965. Charlie Munger, 94, who has worked at Buffett's side for more than four decades,

Both Buffett and Munger will continue handling major capital allocation and investment decisions, including acquisitions, for Omaha, Nebraska-based Berkshire, though they have reduced their responsibilities in recent years with their increasing age.

"It is probably fair to say it's not just the Warren and Charlie show any more," said David Rolfe, who oversees $5 billion of assets at in St. Louis, whose largest holding is Berkshire.

"Today's codifies the importance of and Ajit to not just their current businesses, but their future authority once Buffett relinquishes the title," Rolfe added.

In an interview on CNBC, Buffett called Abel's and Jain's new roles "part of the movement toward succession" at Berkshire.

"They are the two key figures at Berkshire" and "have Berkshire in their blood," he said.

Many investors view Abel as the favourite to become CEO, citing his age and experience in acquisitions and operations.

Still, Paul Lountzis, of in Wyomissing, Pennsylvania, said, "Shareholders should be happy that these large, large contributors to Berkshire's value are now vice chairmen and on the board." Both he and Rolfe consider Abel the top candidate.


Berkshire has more than 90 operating units including the BNSF railroad, auto insurance, ice cream, underwear, and a variety of

While Munger had the idea to make Abel and vice chairmen, Buffett said managing a large portion of Berkshire, including input on smaller acquisitions, would provide valuable experience to his successor.

Buffett dismissed the idea of a horse race between Abel and for the top job.

"They know each other well, they like each other well, they both have their areas of specialty," he said. Berkshire's board will grow to 14 members from 12 with the addition of Abel and

Buffett, who first publicly raised the succession issue more than a decade ago, said he remained in "remarkably good health" and that his health was not a factor in making the announcement. "Maybe six weeks ago," he said, "I just decided, 'Why not now?'"

While Buffett has no plans to quit soon, when asked how long he expected to remain at the helm, he said: "Ten years would be a long time."

Munger told CNBC he thought Berkshire shareholders had "seven or more good years coming out of Warren," but "not very many" out of him, saying, "I have to face reality."

None of the executives was immediately available for interviews.

Berkshire's Class A shares closed up 1.3 percent at $308,350.00. Its B shares also rose 1.3 percent, to $205.61.


Abel, who grew up in Alberta, joined Energy in 1992. His Iowa-based unit now runs several power companies in the United States, and Britain, as well as and solar and wind farms.

Jain, a native of who joined Berkshire in 1986, runs the reinsurance operations, providing coverage against major catastrophes and unusual risks.

Berkshire's businesses employed roughly 44,000 people at the end of 2016, while businesses that Abel will oversee employed about 323,000.

Still, remains critical to Berkshire, recently contributing $113 billion of "float," or premiums collected before claims are paid, for Berkshire to invest.

Buffett, the world's third-richest person according to magazine, has long said has probably made more money for Berkshire than he has.

"If becomes it would be great, but the complexity of the requires someone there with more day-to-day supervision," Rolfe said.

In the CNBC interview, Buffett repeated that Berkshire's board, whose members include Bill Gates, can install a new within a day when he steps down, dies or becomes incapacitated.

Abel and became the apparent front runners after Munger singled them out as "world-leading" performers in a 2015 letter to Berkshire shareholders.

and Ted Weschler, who are Buffett's investment deputies, are expected eventually to succeed Buffett as Berkshire's

Buffett's eldest son, Howard, is expected to become Berkshire's non-executive chairman, to help preserve the company's culture.

(Reporting by Jonathan in New York; Additional reporting by in Bengaluru; Editing by and Leslie Adler)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, January 11 2018. 05:34 IST