Warren E. Buffett has appointed a new chief executive of Berkshire Hathaway, but the Wall Street is still playing the guessing game because things are tightlipped.
Buffett, in his annual letter to Berkshire shareholders on Saturday, said for the first time that he had chosen a replacement, but he did not name the candidate, and emphasized that his business partner, the 88-year-old Charlie Munger, were sticking around.
“Do not, however, infer from this discussion that Charlie and I are going anywhere; we continue to be in excellent health, and we love what we do,” he wrote, who over five decades has built Berkshire, based in Omaha, Neb., into one of America’s largest companies.
The 81-year-old hopes to reassure investors who have expressed concern over Berkshire’s future leadership. Berkshire’s share performance has lagged the broader stock market over the last two years, and Wall Street analysts partly blame the uncertainty surrounding a new chief executive.
It was only a year ago that Berkshire disclosed in a securities filing that it had identified four current managers “who are capable of being CEO.” But just weeks after that filing, David Sokol, a top lieutenant of Buffett whom many considered the front-runner, resigned when he was accused of violating the company’s insider trading policies.
Sokol’s departure, a major embarrassment for Buffett, went unmentioned in the letter. But he praised the work of several executives who are thought to be leading candidates to succeed him as chief, including Ajit Jain, the head of the company’s reinsurance operations; Tad Montross, chief of the insurance business General Re; and Matthew Rose at the railroad giant Burlington Northern Santa Fe.
Beyond succession issues, the 22-page letter delved into the performance of Berkshire’s vast holdings, providing insights into the country’s business prospects.
“In short, when you look at Berkshire, you are looking across corporate America,” wrote Buffett, whose net worth is about $50 billion, according to Forbes magazine.
With a market capitalization of about $200 billion, Berkshire ranks among the top 10 most valuable companies in the United States, on par with General Electric and Google. Its holdings are as varied as the giant utility MidAmerican Energy and the modest See’s Candies.