If a major company needs capital or a private firm wants to sell, Warren Buffett’s checkbook is often the one they seek out.
Will that stay the case when it’s someone else’s signature?
That was the question from several Berkshire Hathaway Inc. shareholders at the firm’s annual meeting Saturday, adding a fresh angle to the topic of succession for the 87-year-old chairman. Berkshire’s desire to utilize a cash pile that has grown to more than $100 billion makes finding large-scale deals a key issue for whoever will be the conglomerate’s next leader.
Buffett downplayed any unique skill he has to drum up deals, using his inability to find recent ones as evidence. Berkshire often makes large investments in times of panic, when its stable capital, and not the Buffett name, is the allure, he argued.
“The reputation belongs to Berkshire now,” Buffett said at the meeting in Omaha, Nebraska. “We are the first call and will continue to be the first call.”
Charlie Munger, Buffett’s 94-year-old vice chairman, said already most acquisitions are coming from the chiefs of the company’s operating subsidiaries, not he and Buffett.
“It’s happening more there than it is at headquarters,” he said.
Although Buffett named two vice chairs this year in a step toward succession, he didn’t directly address the race for his heir at the meeting.
Overall, the meeting had a similar feel to recent years. Buffett and Munger traded one-liners and fielded a few tough questions. But, by and large, the two managed to charm their fans again and keep most of them in their seats for the entire six-hour session. Here were some other topics of interest.
Investors got some detail on the performance of the two men Buffett has handed some of his stock-picking duties. The billionaire said the deputies have both “slightly” beat the S&P 500 Index since they started managing Berkshire’s money.
Todd Combs and Ted Weschler, who together oversee about $25 billion, have almost identical performance since they joined, Buffett said. Combs was hired by Berkshire in late 2010, and Weschler joined about a year later.
While Buffett said their performance roughly amounts to matching the S&P 500, they’ve received some incentive pay that they only get if they outperform that benchmark.
“It’s been better than I’ve done, so naturally I can’t criticize,” he said.
Buffett tried to temper high hopes for the healthcare venture he’s pursuing with Amazon.com Inc. and JPMorgan Chase & Co. While he said they should name a chief executive officer in the next couple months and other companies have expressed interest in joining, Buffett acknowledged the many obstacles it faces.