As Berkshire Hathaway, the American multinational conglomerate, celebrates its 50th year under the control of legendary investor Warren Buffett, now 84, there are strong hints that his potential successor could be his top India-born executive Ajit Jain or his energy division chief Greg Abel.
The possibility has been projected by Buffett’s long-time associate and company vice-chairman Charles Munger in a letter to shareholders. Describing Jain and Abel as more than “world class” performers, he has gone on to comment that in some ways, each one of them is a better business executive than Buffett himself.
Buffett, in his own letter to shareholders, has steered clear of discussing any names. He, however, states that he and his board of directors “believe we now have the right person to succeed me as CEO”, and who in some respects “will do a better job than I am doing”. Over the years, Buffett has been unreserved in his praise of Jain, who has worked with him for three decades and built Berkshire’s reinsurance business from scratch.
An alumnus of IIT and Harvard, the 63-year-old Odisha-born Jain has for long been regarded as a front-runner to succeed Buffett as the CEO. Buffett’s son, Howard, is tipped to become the non-executive chairman when he is no longer at the helm. Neither Buffett nor Munger appear to have any plans to call it a day in the near future, but there has been a keen debate on succession in corporate circles for years because of the advancing age of both men.
The 91-year-old Munger, in a rare letter to shareholders, has stressed that Berkshire would remain a “better than normal” company even if Buffett were to leave it at this point. His successors would not be business leaders of just “moderate ability”, Munger writes, adding: “For instance, Ajit Jain and Greg Abel are proven performers who would probably be under-described as ‘world-class’. ‘World-leading’ would be the description I would choose. In some important ways, each is a better business executive than Buffett,” he writes.
Munger went on to say that Jain created Berkshire’s reinsurance business “out of nothing”, while Buffett himself hailed his attributes yet again, commenting: “His (Jain’s) operation combines capacity, speed, decisiveness and, most important, brains in a manner unique in the insurance business. Yet he never exposes Berkshire to risks that are inappropriate in relation to our resources.” Buffett goes on to say that Jain’s mind is “an idea factory that is always looking for more lines of business he can add to his current assortment”.
Speculation on the possibility of Jain being named by Buffett as his successor is not anything new. His name as well as some other top executives of Buffett’s business empire has been doing the rounds for some years now. Abel, the second prominent name mentioned by Munger, heads Berkshire’s energy business. A 52-year-old Canadian, Abel joined Berkshire through its purchase of a utility company in 2000, and is credited with building it into a large energy provider supplying 11 million customers globally, The Wall Street Journal reported.
