Greg Abel built one of the largest energy businesses in the US under mentor Warren Buffett. Now, he'll try to fill the shoes of the world's most famous investor.
At the company's annual meeting Saturday, 94-year-old Buffett said he would recommend to the board of directors that Abel become Berkshire Hathaway's new CEO at the end of the year. It'll be discussed at the firm's board meeting Sunday, he said.
"The time has arrived," Buffett said at the conclusion of the meeting's question-and-answer session. Abel was unaware the announcement was coming, Buffett said.
Abel, 62, will be Berkshire's first new CEO since Buffett took the post in 1970, and his promotion fulfills a plan unveiled years ago.
Abel will oversee a conglomerate with more than 390,000 employees at businesses spanning insurers, manufacturers and a top US railroad. Buffett assembled the portfolio through decades of takeovers.
With Berkshire's cash hoard of US$347.7 billion, Abel, one of the company's most acquisitive managers, will get to put his stamp on the Omaha, Nebraska-based company with more buyouts and investments. He said Saturday before the announcement that the company's investment philosophy would not change under his stewardship.
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At the company's annual meeting in 2021, Charlie Munger let it slip that Abel would be sure to keep the culture of Berkshire intact in future years. Buffett later confirmed Abel was the top candidate to replace him as CEO.
He had already started to take on a wider role at Berkshire with a 2018 promotion that gave him the task of supervising Berkshire's non-insurance businesses. That included oversight of companies from railroad BNSF to fast-food chain Dairy Queen.
The latest promotion reflects a shift that Buffett put in motion in the latter part of his career. By buying businesses such as utilities and BNSF, he gave his successor a way to reinvest in projects that earn regular rates of return. He also lessened the company's reliance on insurance and stock picking, which had propelled Berkshire's growth for decades.
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Buffett, one of the wealthiest people in the world, summed up his rationale for owning power companies in 2006: "It's not a way to get rich. It's a way to stay rich."
Pipelines, utilities
Abel helped execute that strategy. His skill for operations and ability to spot deals built Berkshire Hathaway Energy, the unit he oversaw for many years, into one of the largest businesses in Buffett's empire. The company operates natural gas pipelines that stretch from the Great Lakes to Texas and electric utilities that keep the lights on in states including Iowa and Nevada. It's also one of the largest producers of wind and solar energy in the US.
The promotion will remake the top ranks at Berkshire. Abel worked alongside Ajit Jain, who oversees Berkshire's collection of insurers, after both executives were named vice chairmen.
Abel grew up in Edmonton an avid hockey player. His uncle Sid Abel played for the National Hockey League's Detroit Red Wings alongside Gordie Howe and Ted Lindsay, a trio known as the "Production Line".
Abel earned a bachelor's of commerce degree at the University of Alberta before becoming an accountant. After a stint at PricewaterhouseCoopers in San Francisco, he took a job in 1992 as a controller at CalEnergy, a geothermal power company.
Cheerleaders, politician
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Being the voice of one of the world's largest companies will be a shift for Abel, who has often avoided the limelight. Abel and Jain both fielded questions from shareholders at a few annual meetings and were present at the annual meeting on Saturday - a rare public opportunity for investors to watch the pair at work.
Buffett, in contrast, embraced the public life, granting frequent interviews to news outlets, posing with cheerleaders to promote a Berkshire clothing unit and advising politicians including former California Governor Arnold Schwarzenegger and former President Barack Obama.
The billionaire also drew tens of thousands of shareholders to Berkshire annual meetings, where he'd share his thoughts on corporate governance, investing and politics.
Buffett used the gatherings and his annual letters to celebrate values that he intended to outlive his tenure at Berkshire. He cited a focus on long-term wealth creation rather than the next quarter's earnings. He highlighted the promise that Berkshire will permanently hold companies it buys and that, financial crises and recessions aside, the US offered wonderful opportunities for businesses.
"I often get asked, 'What's the best thing working for Warren?'" Abel said at a utility-industry event in 2014 alongside Buffett. "It's that optimism. It's always there. You believe in America. You believe in where we're going. And it's a remarkable trait."
