Greg Abel has worked at Berkshire Hathaway for more than two decades, currently in charge of energy – CEO of Berkshire Hathaway Energy.
After much speculation, the successor of investor Warren Buffett‘s icon has been confirmed. The 90-year-old billionaire said at this year’s shareholders meeting, the next name will become Berkshire’s CEO Gregory Abel (59 years old) who is currently the company’s Vice President.
“The board of directors has agreed that if something goes wrong with me tonight, tomorrow morning the person taking over from Berkshire will be Greg,” Buffett told CNBC.
So who is Greg Abel? Here are some things to know about the person who has the power to replace the “Prophet of Omaha”:
Greg Abel was born in Edmonton, Canada in a working-class neighborhood. His father is a salesman. Like many Canadians, he grew up with a love for hockey.
“I remember getting together with other neighborhood kids as soon as we could after school,” Abel told the Horatio Alger Association in 2018. “We played hockey nearly every day in summer and winter and stayed out until we were called in for dinner.”
Growing up, Greg Abel made money through odd jobs such as handing out flyers or refueling fire extinguishers to Levitt Safety, where his father worked.
He graduated from the University of Alberta in 1984 with a degree in commerce. After graduating from university, Abel began working as an accountant for PricewaterhouseCoopers, then the electric company CalEnergy (later MidAmerican Energy). In the University of Alberta’s New Trail publication, he shared his love for accounting when he realized the importance of understanding income reporting and cash flow.
Greg Abel’s career at Berkshire Hathaway
Abel joined Berkshire Hathaway from the position of President at MidAmerican Energy in 1999. In 2008, he became CEO of MidAmerican, which later changed its name to Berkshire Hathaway Energy (BHE).
In 1990, Abel caught the eye of Buffett when he went to England to handle CalEnergy’s takeover of a company. His approach to work impressed Walter Scott Jr., a CalEnergy shareholder and childhood friend of Buffett’s Berkshire board member.
“Greg is the kind of person that, whenever he’s been asked to do something, he’s willing to go and do it,” Scott said of Abel in an interview with Fortune in 2011.
Currently, Greg Abel serves as CEO and Chairman of BHE. He oversees the energy company holdings of Berkshire including coal, natural gas, the hydro, wind, solar, geothermal, and nuclear power companies. BHE has a total of more than 23,800 employees and reports 2020 revenue of more than $ 20.9 billion.
Greg Abel also serves on the board of directors of companies such as Kraft Heinz (in which Berkshire owns a minority stake), the AEGIS Insurance Services, and the Hockey Canada Foundation.
Greg Abel has a wealth of experience in mergers and acquisitions and is capable of managing large numbers of people, said James Armstrong, a longtime Berkshire shareholder and Chairman of Henry H. Armstrong Associates.
Greg Abel’s base salary at Berkshire Hathaway is $ 16 million in both 2019 and 2020, along with a bonus of $ 3 million per year, according to Berkshire’s SEC filing. However, in 2016, Abel received $ 41 million in bonuses on the back of Berkshire Hathaway Energy’s soaring business results.
Buffett once said that he wanted his successor to be “somebody that’s… already very rich – which they should be if they’ve been working a long time – and is not motivated by whether they have 10 times as much money than they and their families can need or a 100 times as much.”
The qualities of the successor of Warren Buffett
Buffett founded Berkshire in 1965 to become an investment empire worth nearly $ 630 billion, possessing a series of leading stocks in the world. The quest for a successor to Buffett has emerged since 2006 when the legendary investor turned 75.
During a sharing session in 2013, Buffett said of his junior this way: “I always make time for Greg when he calls, because he brings me great ideas and is truly innovative in his thinking and business approach.”
After decades of work, Greg Abel still retains his passion: “I want to have an impact. I want to roll up my sleeves and be actively engaged in making our company successful,” said Greg.
“I think hard work leads to good outcomes,” he said. “In my schooling, in sports, and in my business positions, I learned that if I put in a lot of work and was well-prepared, then success would be more likely.”
A partner at CastleKeep Investment Advisors commented on Greg: “Simple, understated, very knowledgeable, but humble at the same time, and also serious.”
Abel has earned Buffett’s trust for his commitment to Berkshire culture, his long-term mindset, and the ability to spend wisely.
Buffett once said: “There’s a lot of smart people in this world, but some of them do some very dumb things. He’s a smart guy who will never do a dumb thing.”
Abel and Ajit Jain (69 years old) are seen as possible successors to Buffett when both were promoted to Vice President at Berkshire in 2018.
However, both Buffett and his longtime friend and business partner, Vice President Charlie Munger, have taken great pains to confirm who will ultimately assume enormous responsibility when Buffett retires.
Besides, Buffett’s eldest son Howard is expected to become non-executive chairman, while Todd Combs and Ted Weschler will become chief investment officers.
Buffett told CNBC that Jain will be the next candidate after Abel. Age was also a factor in his decision-making. Buffett says Abel’s age is right for “makes a real difference”.
After promoting both Greg Abel and Jain as Vice President in 2018, Buffett praised the two. “They both have Berkshire in their blood. They love the company. They know their operations like the back of their hand,” Buffett told CNBC at the time.
Meanwhile, Munger also complimented both Abel and Jain for calling them “proven performers” ” and wrote in a letter to shareholders that “in some important ways, each is a better business executive than Buffett”./.