00:00After six decades as chairman of Berkshire Hathaway, Warren Buffett, the Oracle of Omaha, is becoming chairman emeritus, handing over
00:07control to his son.
00:08Howard Buffett is no stranger to the Berkshire board, and his appointment marks the end of a transition that also
00:13ushered in new CEO Greg Abel.
00:15We spoke with Alex Rajanbari about Berkshire Hathaway. He covers that for Bloomberg News, and he gave us some insight.
00:22We've spoken about, you know, Berkshire Hathaway in the post-Buffett-at-the-helm era.
00:27We've talked about Greg Abel and kind of his vision for the company and how he's doing.
00:32But now we have another player on the board, which he's been there, you were telling me.
00:37Howard Buffett has been there, but he's stepping into a bigger role now.
00:40What does this mean for the company, and what do we expect out of this?
00:43Yes, so this is the son of Warren Buffett, the eldest son.
00:46He's been on the board of the company for more than 30 years now.
00:50He has a lot of experience in terms of corporate governance.
00:52He was on boards at Coca-Cola, Conagra.
00:55He knows the spiel.
00:58But it's still a big step for him because he's stepping in his father's shoes, right?
01:02He will be involved in a day-to-day business with Greg Abel.
01:07And Buffett is stepping out a bit more.
01:09He did already last year say he was, you know, relinquishing his role as CEO, passing on the baton to
01:17Greg Abel.
01:18He was still around, but, you know, he's getting old, and it makes sense for him to kind of take
01:23a step back now.
01:24He's still around.
01:24He's 96 years old.
01:26What do we know about his level of engagement after, as you say, he passed the baton to Greg Abel?
01:30So we know he said that he was still at the initiative when the investment in Google's parent alphabet was
01:38made earlier this year, and that he engaged with Greg Abel on that.
01:41So he was still kind of involved in major deals that Berkshire was doing, though Greg Abel was running the
01:46day-to-day business.
01:48Buffett said also that he was coming to the office five days a week up until recently.
01:53Old habits die hard.
01:54But, you know, a few months ago, he did say on CNBC that he broke his leg.
01:59So, you know, with age, you know, it makes sense for him now to kind of take a step back
02:05from that.
02:06Do we know why about the timing?
02:07Do we think it's just time?
02:09Do you think he, you know, if he was Abel's training wheels for a while, does he want to step
02:12back and see how he does?
02:13Or is it just simply that there's a clock on everything, and he feels like it's time to let somebody
02:17else take the helm?
02:18He did say that he thinks it's the right timing because Greg Abel has exceeded his expectations that we're sky
02:24high.
02:25That's a nice endorsement from the big guy, right?
02:27Yeah, definitely.
02:28But then he also has mentioned several times in his letters recently about, you know, time passing by.
02:35And, yeah, age advancing makes it, like, perfectly understandable for him to make that move now.
02:40Warren Buffett had this oracular status.
02:43People liked to hear him talk.
02:44They wanted his pearls of wisdom.
02:46What should we know about Howard?
02:48As you mentioned, he's been on all of these boards before.
02:50He was kind of, if not front and center, near the front when it came to the Buffett family's philanthropic
02:55giving.
02:56What's he like?
02:57What makes him tick?
02:58How might he embrace this role as chairman of the board?
03:01So he's got a very eclectic background.
03:03He used to work as a head of investor relations for a food company.
03:08He also briefly ran a sheriff's office in rural Illinois.
03:14A sheriff's office?
03:15Yes.
03:15He is involved in philanthropy with his foundation that receives all the money from the, I mean, his father's stake
03:23in Berkshire Hathaway.
03:24He will be responsible with disbursing that money through that charity and his siblings' charities and the charity of their
03:32mother.
03:34So he's doing a lot of things with that.
03:36He's focusing mostly on food security, conflict mitigation.
03:40He's donating a lot of money to Ukraine since 2022.
03:44So he's very eclectic, very many endeavors.
03:47He's written books.
03:48He's a photographer.
03:50There's many things to know about him.
03:51Now, we'll get to see what he's like, really, when he's on stage at, or if he's on stage, really,
03:56at the Berkshire Hathaway meeting.
03:57But we're going to see a bit more of him in the context of Berkshire Hathaway.
04:01That's certainly going to be very interesting for us.
04:03Do you see the potential for a conflict between these two men?
04:05Is it clear who is in charge of what?
04:07Or is that something that they're going to have to carve out as they move forward?
04:10I mean, it would be really hard to know before anything happens.
04:13And anyway, I think the image they try to portray is a very, very smooth transition.
04:18And it's playing out really well.
04:20I mean, everything's been well telegraphed.
04:21And it's been since 2011 that we know that Howard is going to be chairman at some point.
04:25So it's not really a big surprise.
04:28I think they've been, I mean, that's only my take, but they've been, you know, they've had plenty of opportunities
04:33to kind of work together.
04:35They also have known each other for a while.
04:37You mentioned a moment ago the praise that Warren Buffett lavished on Greg Abel.
04:42And I'm curious if shareholders have done the same.
04:44We just had quarterly earnings a few weeks back.
04:46And the cash pile remains astronomically tall.
04:51How much has he sort of made a mark?
04:52Are shareholders happy with how he's kind of comported himself to the job so far?
04:55They have.
04:56When I was in Omaha for the annual meeting in May, people were very happy with his performance.
05:01It was a very comprehensive business review of Berkshire Hathaway.
05:06Details that had not been shared before were shared to investors.
05:10Also, the moves that he's made so far are kind of interesting for investors, right?
05:14He resumed buybacks after more than a year of a big pause on that.
05:18He's doing some multi-billion deals, the Taylor Morrison deal, back in, you know, the home building business, the investment
05:26in Google's parent alphabet for artificial intelligence.
05:29Definitely a new area of investment for Berkshire Hathaway.
05:33So investors are kind of, you know, positive signs.
05:36Doesn't translate to the price, the share price right now.
05:40It's remained kind of flat so far this year, while the S&P has, you know, gained more than 11%.
05:45So that is a performance that, you know, raises questions.
05:50But so far, you know, it's pretty early in his mandate.
05:53It seems to me he's in a bit of a tough spot because he is taking on this mantle of
05:57this legendary investor whom people trusted almost blindly.
06:00And he's doing it at a time when so many givens in the market are just changing.
06:05It's just a really rocky time to being trying to make any of these calls.
06:09Is that a challenge that you think he's able to rise to?
06:11Or are we going to have to wait and see?
06:12Obviously, the market seems to be like sitting back and almost waiting.
06:15We're going to have to wait and see.
06:17We can see that some of the big investments that were made on the equity portfolio side of the company
06:22are interesting and kind of in sync with what's happening in, you know, the rest of the world.
06:26I mean, I'm thinking about the Delta stake that is, you know, came at the right moment.
06:30The home building acquisition is also interesting because there are some, you know, this sector is going through some turbulences.
06:37And that's definitely another one of those very typical Buffett calls, you know, like buying a company when no one
06:45really would want to buy it.
06:46But like just, you know, with a perspective of, you know, making it grow over time.
06:50So I do think he definitely carries the mantle of, you know, the Buffett philosophy.
06:57We have yet to see whether he's going to really do it for a long term.
07:01With Howard Buffett, assuming this role as chairman, what does it say about the necessity of having a Buffett on
07:07the Berkshire board going forward?
07:09It's a lot of alliteration there.
07:10A lot of piece that I've just thrown into that sentence there.
07:12But look, I think when you had the Greg Abel transition, it was moving on from Warren Buffett.
07:16How important is it to have some familial legacy that is still on the leadership of this company?
07:20It is important because it's Omaha.
07:22They all, like, you know, represent the company.
07:25They've also been involved in the company for a long time.
07:29It's not a family-run business, but they are involved with their father and they know how the company works.
07:35And they know how to carry the legacy of him as well.
07:38So that's important.
07:39Susie's on the board, Howard was on the board already, Warren Buffett remains on the board.
07:44So it's still a very Buffett-heavy board.
07:47Alex, thank you so much.
07:50All right.
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