Special topic: Buffett's 2024 shareholders' meeting hit

Buffett has a clear succession plan: CEO decides all Berkshire investments in the future, and the next one "won't wait too long".

Source: Li Dan on Wall Street

Buffett said that in the past, he had different views on the responsibility of managing investments, but now he feels that the responsibility should be borne by CEO. Berkshire's capital is already very large.NeogeomvsWe don't want 200 employees to manage $1 billion each. It won't work at all. The future CEO Abel knows the enterprise very well, and if he knows the enterprise, he knows the common stock.

At the Berkshire shareholders' meeting on Saturday, Buffett made the clearest statement yet about future executive succession plans.

In a letter to shareholders released in February, Buffett made it clear that Greg Abel, head of Berkshire's non-insurance business, was ready to become Berkshire's CEO tomorrow. Although Abel was previously identified as Buffett's handpicked successor to CEO, there are questions about who will succeed Buffett in control of Berkshire's investment.

Todd Combs and Ted Weschler, two of Berkshire's investment managers, have helped Buffett manage a small portion of Berkshire's portfolio over the past decade, and they are said to account for about 10% of Berkshire's investments. There is speculation that the two managers will take over part of Buffett's job when he leaves office as CEO.

In response to shareholders' questions at a shareholder meeting on Saturday, Buffett said that when he is no longer at the helm of Berkshire, he will now have the final say on Berkshire's investment decisions. In other words, Abel is responsible for future decisions related to the stock portfolio.

Buffett said: "if I were a member of the board and had to make a decision, I might leave the capital allocation to him according to Abel's situation." He knows a lot about business. If you know the enterprise, you know the common stock. "

Buffett said his decision was influenced by Berkshire's asset growth.

Buffett said he believed that "the responsibility should rest entirely with" Abel, who had been responsible for it all the time, and later handed over some of the responsibility.

"I used to have different views on how to handle this, but I (now) think that the responsibility lies with CEO, no matter what decision CEO makes, it may be helpful. Berkshire's capital has grown so much that we don't want our 200 employees to manage $1 billion each. It won't work at all. "

Buffett said that it is up to CEO to make decisions about the funds it managed at the time, no matter what decision CEO makes, it may help to meet this responsibility.

Buffett mentioned two investment managers, Combs and Weschler, saying their responsibilities are clear and they know what to do. At the same time, he pointed out that strategic considerations are important if Berkshire is to achieve more benefits. Buffett believes that when dealing with the money Berkshire will have, you have to think very strategically about how to do big things. He said that Abel has the ability to make strategic deployment.

At the shareholder meeting, Buffett made no secret of his future when he was no longer at the helm of Berkshire. Investors "don't have to wait too long," he said. Buffett pointed out that although he still thinks he can do it, his old age is the biggest concern.

"We will see how Berkshire's next management will respond, but fortunately, you won't wait long. I feel good, but I know a thing or two about the actuarial table. " Buffett said.

Buffett added that there are so many people in the world who sign four-year employment contracts even if they are not sure where they will be in four years' time, and he should not be like those people.

Buffett also praised Ajit Ajit Jain, head of Berkshire's insurance business, and when asked how Berkshire got people to take over, Buffett replied: "We're not going to find another Ajit."

Buffett called insurance Berkshire's most important business. He said that because Berkshire had created a structure that did not exist before he joined in 1986, many parts of the structure were "almost impossible for competitors to imitate."

Jain says there is no one that cannot be replaced, such as Cook who has done a good job since taking over from Jobs. Berkshire's board is focused on successors. He often shares with the board what the insurance business will do if he is hit by a truck one day. This includes evaluating the list of candidates to take over the insurance business, as well as specific individuals to whom Jain will hand over the keys.

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