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BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel


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* BERKSHIRE HATHAWAY INC - GREGORY E. ABEL AND AJIT JAIN WERE THEN ELECTED TO SERVE AS DIRECTORS TO FILL RESULTING VACANCIES ON BOARD OF DIRECTORS

 

* BERKSHIRE HATHAWAY - ‍ON JAN 9, BOARD VOTED TO INCREASE NUMBER OF DIRECTORS COMPRISING ENTIRE BOARD OF DIRECTORS FROM TWELVE TO FOURTEEN​

 

* BERKSHIRE HATHAWAY INC - ‍BUFFETT AND CHARLES T. MUNGER, VICE CHAIRMAN OF BERKSHIRE HATHAWAY WILL CONTINUE IN THEIR EXISTING POSITIONS​

 

* BERKSHIRE HATHAWAY INC - BUFFETT APPOINTED ABEL TO BE BERKSHIRE VICE CHAIRMAN - NON-INSURANCE BUSINESS OPERATIONS

* PRESS RELEASE - BERKSHIRE HATHAWAY INC. NEWS RELEASE

 

* BERKSHIRE HATHAWAY INC - BUFFETT APPOINTED JAIN TO BE BERKSHIRE HATHAWAY‘S VICE CHAIRMAN - INSURANCE OPERATIONS

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http://www.berkshirehathaway.com/news/jan1018.pdf

 

Text of Press Release:

 

BERKSHIRE HATHAWAY INC.

NEWS RELEASE

FOR IMMEDIATE RELEASE January 10, 2018

Omaha, NE (BRK.A; BRK.B) –

 

On January 9, 2018, Berkshire Hathaway Inc.’s Board of Directors voted to increase the number of

directors comprising the entire Board of Directors from twelve to fourteen. Gregory E. Abel and Ajit

Jain were then elected to serve as Directors to fill the resulting vacancies on the Board of Directors. In

connection with their election to the Board of Directors, Warren E. Buffett, Berkshire Hathaway’s

Chairman and CEO, appointed Mr. Abel to be Berkshire Hathaway’s Vice Chairman – Non-Insurance

Business Operations and Mr. Jain to be its Vice Chairman – Insurance Operations.

 

Mr. Abel joined Berkshire Hathaway Energy Company in 1992 and currently serves as its Chairman and

CEO. Mr. Jain joined the Berkshire Hathaway Insurance Group in 1986 and currently serves as

Executive Vice President of National Indemnity Company with overall responsibility for leading

Berkshire’s reinsurance operations.

 

Mr. Buffett and Charles T. Munger, Vice Chairman of Berkshire Hathaway will continue in their existing

positions, including being responsible for significant capital allocation decisions and investment

activities. Mr. Buffett is scheduled to be interviewed later today at 8:00 a.m. Eastern Time on CNBC’s

Squawk Box at which time he will provide additional information regarding the appointments of Mr.

Abel and Mr. Jain to Berkshire Hathaway’s Board of Directors and their new roles at Berkshire

Hathaway.

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They chose a good time for that:

 

- soon FY 2017 figures will come out and the bookvalue will have increased 26 % in 2017..MASSIV

- a bulk of cash is waiting to be invested for an elephant and / or for share buybacks... MASSIV

- additional cashflow-improvement by taxreform from 2018 on ... MASSIV

- interest environment is clearly improving, which is strong tailwind for BRK

 

Well done!

 

 

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I think it's a positive move and a sensible division recognising their areas of expertise. I think both are extremely capable and will be valuable additions to the Board. It's also a nice recognition of them regardless of whether or not one of them would eventually become CEO.

 

Doubtless Buffett will be asked if it's indicative of succession plans or whether it indicates serious health problems for him or Munger and I wouldn't be too surprised that the minor decline in pre-trading stock price is on the basis of this sort of speculation.

 

I'm sure he will be adamant that it is entirely independent of the Board's succession planning discussions.

 

It would be interesting to know whether Jain and Abel would be involved in discussion of succession planning at future Board meetings given that they could be candidates.

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Good move.  It was overdue.  Munger is like 94 and Buffett is 87.  What's the probability that both will be around this time next year?

 

StubbleJumper,

 

Here is my morbid-bid on your ask: [and no, I don't think I'm stuttering]

 

Probability of 87 years old man to die this year ~ 12.48%

Probability of 93 years old man to die this year ~ 22.49%

 

Thus, probability of both Mr. Buffett and Mr. Munger being a live at 2018 year end = [100% - 12.48%] * [100% - 22.49%] = 67.8%

 

Life expectancy of Mr. Buffett: 5 years

Life expectancy of Mr. Munger: 3.2 years.

 

Source: For Mr. Buffett.For Mr. Munger.

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"Life expectancy of Mr. Buffett: 5 years

Life expectancy of Mr. Munger: 3.2 years."

 

The life expectancy of very rich investors could be a little bit higher, because of good prevention,

best medical care, using the best antidotes when ill and the "hard work" involved with investing.  ;)

 

 

Here is the CNBC transcript from today:

 

https://www.cnbc.com/2018/01/10/full-transcript-billionaire-investor-warren-buffett-speaks-with-cnbcs-becky-quick-on-squawk-box-today.html

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Good move.  It was overdue.  Munger is like 94 and Buffett is 87.  What's the probability that both will be around this time next year?

 

StubbleJumper,

 

Here is my morbid-bid on your ask: [and no, I don't think I'm stuttering]

 

Probability of 87 years old man to die this year ~ 12.48%

Probability of 93 years old man to die this year ~ 22.49%

 

Thus, probability of both Mr. Buffett and Mr. Munger being a live at 2018 year end = [100% - 12.48%] * [100% - 22.49%] = 67.8%

 

Life expectancy of Mr. Buffett: 5 years

Life expectancy of Mr. Munger: 3.2 years.

 

Source: For Mr. Buffett.For Mr. Munger.

 

 

Yep, 33% chance that one of them will make his way to the big reading room in the sky and about a 3% likelihood that both will be gone.  It's high time that a concrete succession move is made.  If only they would initiate a capital management plan to deal with the excessive cash....

 

 

SJ

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Abel's expertise and experience is managing existing non insurance operations.  Potentially using the cash generated from those operations to invest capital in future to make acquisitions of controlled businesses (particularly large infrastructure type businesses). Most likely he will be aided by Ted and Todd in capital allocation.

 

Jain's area of expertise is capital raising to further finance those acquisitions in the form of generating low cost float and managing and pricing the underwriting risk, and insurance business.

 

 

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Yep, 33% chance that one of them will make his way to the big reading room in the sky and about a 3% likelihood that both will be gone.  It's high time that a concrete succession move is made.  If only they would initiate a capital management plan to deal with the excessive cash....

 

SJ

 

I'm not sure that's Buffett's style. I think he'd rather pick a successor who he trusted to make capital management decisions in the future, depending on the opportunities then. I agree with him. It's not rational to let the potential death of the CEO affect your capital allocation decisions at a time when there are few opportunities, if someone can take over who is competent and who will have better options in the future. I think that holds no matter how smart the outgoing management are.

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I think he'd rather pick a successor who he trusted to make capital management decisions in the future

 

I don't think that person exists. I think it exists for certain vacuums (insurance, op biz, stock investments). If it were me (ha!), I would institute a dividend or repurchase program. Then, priority of capital goes Jain>Abel>T&T.

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Guest longinvestor

The most rational thing to do. Appoint Munger Jr. first. Nothing can be more important than avoiding capital allocation mistakes by the next Chairman. Besides, the mother lode of capital allocation opportunities likely to present themselves will likely be in energy and insurance. There's a lot of idiot capital going into insurance as we speak. As Munger said, they are busy turning liquid capital to illiquid ones. Includes buybacks. Think of those as one-time / one-way decisions. Can't get those wrong, need a Munger to weigh in.

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I think he'd rather pick a successor who he trusted to make capital management decisions in the future

 

I don't think that person exists. I think it exists for certain vacuums (insurance, op biz, stock investments). If it were me (ha!), I would institute a dividend or repurchase program. Then, priority of capital goes Jain>Abel>T&T.

 

 

I'd say that the person might exist, but you kind of need to break him into the job slowly.  Even if somebody has the intellect, judgement and patience to be a good capital allocator, it is reasonable to start him off with a $100B+ war chest supplemented by annual cash growth of ~$20B?  No, I'd say let the guy start making modest moves of $5B and $10B before handing over the keys.  If the guys arrives and has a ridiculous pile of cash, it puts a hell of a lot of pressure on him to find ways to spend it.

 

 

SJ

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No, I'd say let the guy start making modest moves of $5B and $10B before handing over the keys.  If the guys arrives and has a ridiculous pile of cash, it puts a hell of a lot of pressure on him to find ways to spend it.

 

SJ

 

Noting new in that idea. That is how they proceed with T&T.

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