Warren Buffett, who steps down as CEO of Berkshire Hathaway at year-end, reaffirmed his trust in successor Greg Abel on Monday and announced he is accelerating lifetime gifts to his three children’s foundations.
Buffett, 95, who took a controlling stake in Berkshire in 1965 and became chairman and CEO in 1970, also outlined in a Thanksgiving message people and circumstances for which he is grateful, including several people who lived in his native Omaha.
“I will no longer be writing Berkshire’s annual report or talking endlessly at the annual meeting. As the British would say, I’m ‘going quiet.’ Sort of,” Buffett, who will remain Berkshire chairman, wrote.
“Greg Abel will become the boss at year-end," he wrote. “He is a great manager, a tireless worker and an honest communicator. Wish him an extended tenure.”
Buffett on Monday converted 1,800 A shares into 2.7 million B shares to give the B shares to four family foundations.
He noted in the message that all his children, at 72, 70 and 67, are above normal retirement age, and said it “would be a mistake to wager that all three — now at their peak in many respects — will enjoy my exceptional luck in delayed aging.
“To improve the probability that they will dispose of what will essentially be my entire estate before alternate trustees replace them, I need to step up the pace of lifetime gifts to their three foundations,” Buffett wrote.
“Fortunately, a course correction is easy to execute. There is, however, one additional factor to consider: I would like to keep a significant amount of 'A' shares until Berkshire shareholders develop the comfort with Greg that Charlie and I long enjoyed,” he said, referring to the Charlie Munger, his longtime friend and Berkshire’s vice chairman who died at 99 two years ago.
“That level of confidence shouldn’t take long. My children are already 100% behind Greg as are the Berkshire directors.
“The acceleration of my lifetime gifts to my children’s foundations in no way reflects any change in my views about Berkshire’s prospects. Greg Abel has more than met the high expectations I had for him when I first thought he should be Berkshire’s next CEO.
“He understands many of our businesses and personnel far better than I now do, and he is a very fast learner about matters many CEOs don’t even consider. I can’t think of a CEO, a management consultant, an academic, a member of government — you name it — that I would select over Greg to handle your savings and mine,” Buffett wrote.
Abel understands more about both the upside potential and the dangers of Berkshire’s property and casualty insurance business than many great longtime industry executives do, Buffett added.
“My hope is that his health remains good for several decades. With a little luck, Berkshire should require only five or six CEOs over the next century. It should particularly avoid those whose goal is to retire at 65, to become look-at-me rich or to initiate a dynasty,” the retiring CEO said.
While Buffett will be quieter at annual meetings, “I will continue talking to you and my children about Berkshire via my annual Thanksgiving message. Berkshire’s individual shareholders are a very special group who are unusually generous in sharing their gains with others less fortunate. I enjoy the chance to keep in touch with you,” he wrote.
“Indulge me this year as I first reminisce a bit,” Buffett, who historically has issued an annual letter to shareholders, said.
In the gallery are some insights, memories and words of wisdomthat Buffett shared.
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