Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc., assured shareholders that they’ll be fine after he’s gone.
“If I die tonight, I think the stock would go up tomorrow,” Buffett, 86, said Saturday at Berkshire’s annual meeting in Omaha, Nebraska. “And there’d be speculation about breakups and all that sort of thing, so it would be a good Wall Street story.”
Buffett was answering an investor’s inquiry on whether Berkshire would repurchase stock if the shares fell after the billionaire and his 93-year-old vice chairman, Charles Munger, were to move on. The idea underpinned a larger question of succession planning at Berkshire. Buffett over five decades has expanded the conglomerate into industries including insurance, energy and transportation, while assembling a $135 billion stock portfolio.
He said the board would consider a buyback if it were in the best interest of shareholders, and that the next CEO would have to be a capital allocator.
The next leader of Berkshire is “going to have to allocate maybe $400 billion or something like that, maybe more,” Buffett said. “Ten years from now Berkshire will be an aggregation of businesses where more money has been put in—in that decade—than everything that took place ahead of time.”
‘Very Rich’
The billionaire investor said he hoped that the person who succeeds him will already be “very rich”—because the executive will have already worked for a long time and had success—and wouldn’t be motivated by having 10-times or 100-times as much money as they need.
“They might even wish to set an example by engaging for something far lower than what you could say their true market value is,” Buffett said.
Buffett said the company could offer a modest pay package, with the chance for compensation to climb with long-term improvements in results. Munger said it will be unnecessary to bring on pay consultants, a view echoed by Buffett, who has long criticized their work.
“If the board hires a compensation consultant after I go,” said Buffett, “I will come back.”
Investors have speculated for years about who might replace Buffett. At this year’s meeting, he again praised the work of his reinsurance lieutenant, Ajit Jain, as well as his stock pickers, Todd Combs and Ted Weschler. He also highlighted the leaders at the various insurance units.