Warren Buffett attempted to assure Berkshire Hathaway Inc. shareholders at their annual meeting Saturday that the company will be in good hands whenever he steps down, in an effort to counter fears surrounding its succession plan following the news that the legendary businessman has prostate cancer.
Shareholders have long wondered who will succeed the 81-year old Buffett as CEO, and now the question has become even more pressing. Buffett has previously assured them that his condition is not life-threatening and will not impede his ability to work.
Questioned by CNBC Squawk Box co-anchor Andrew Ross Sorkin about how he is feeling, Buffett answered, Terrific -- and he described his recent cancer diagnosis as a nonevent. Buffett even joked that he is more likely to be killed by a jealous husband than by cancer, according to CNBC.
But the diagnosis of cancer has reminded shareholders that Buffett is as mortal as the rest of us. The diagnosis made succession and the future of Berkshire Hathaway without Buffett the key issue at the company's annual shareholders meeting.
I don't think that every deal that I made would necessarily be makeable by a successor, but they'll bring other talents as well, Buffett said, according to Reuters. And, of course, the successor will need the skills to be an effective chief risk officer, especially significant because of Berkshire Hathaway's multiple lines of business in the insurance industry. As a result, he said, We're not going to have an arts major in charge of Berkshire.
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Among possible internal candidates to replace Buffett as CEO are Ajit Jain, his top lieutenant in the insurance industry; Matthew Rose, who heads the BNSF Railway Co.; and Greg Abel, who runs the MidAmerican Energy Co.
Olza M. Tony Nicely, chief of the Geico insurance unit, was long considered a candidate for succession, too, but he is now in his late 60s.
The annual meeting took place one day after Berkshire Hathaway announced its first-quarter earnings per share had more than doubled and that the company's insurance operations had avoided huge losses, despite the natural disasters in Australia, Japan, and New Zealand last year.
Overall, we feel good about the first quarter, we feel good about the year, Buffett said. In general, all of our companies, with the exception of the ones in the residential-construction business ... have shown good earnings.
Buffett said Berkshire is continuing to look for a big acquisition, and he revealed he had considered a $22 billion deal for an unnamed target that fell apart. He said he is ready to make a $20 billion deal, assuming he can find the right company. He also hinted he would consider a $30 billion purchase, but restated that he will never let Berkshire's cash pile drop below about $20 billion.
Addressing the U.S. banking system, Buffett said it is in fine shape, and he gave credit to Washington for forcing banks to raise capital when they resisted. He stated that shareholders may not like it, but society has benefited.
Buffett was not as optimistic about the European banking system, which he described as gasping for air. ... I would put European banks and American banks in two very different categories.
Answering a question about technology stocks, Buffett said he wouldn't be surprised if both Apple Inc. and Google Inc. are worth a lot more 10 years from now, but, as customary, he claimed he doesn't know enough about tech to invest in it.
Buffett also talked politics. Addressing the issue of Super PACs, he said he would not be donating to any because he assumes his money would be spent to distort facts and run smear campaigns, according to the New York Times.
As usual, Berkshire Hathaway's annual shareholders meeting had a festive atmosphere overall, with highlights including free food, a newspaper-throwing contest, and a video shown before Buffett's keynote address in which he plays the ukulele while performing with cast members of the television show Glee.