Corner of Berkshire & Fairfax Message Board

General Category => Berkshire Hathaway => Topic started by: kiwing100 on January 10, 2018, 03:17:37 AM

Title: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: kiwing100 on January 10, 2018, 03:17:37 AM

FYI, headline on CNBC.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: kiwing100 on January 10, 2018, 03:27:51 AM

FYI, Buffett going to be on CNBC at 0800 ET with Becky Quick.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: kiwing100 on January 10, 2018, 03:42:45 AM

* 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
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: Dynamic on January 10, 2018, 04:01:04 AM
http://www.berkshirehathaway.com/news/jan1018.pdf (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.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: Valuehalla on January 10, 2018, 04:40:21 AM
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!

Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: Dynamic on January 10, 2018, 05:06:48 AM
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.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: LongTermView on January 10, 2018, 07:27:30 AM
Yes, this makes sense.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: StubbleJumper on January 10, 2018, 07:42:33 AM
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?
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: Buffett_Groupie on January 10, 2018, 07:51:50 AM
https://finance.yahoo.com/video/warren-buffett-theres-no-market-135600102.html

Buffett is as sharp and healthy as usual!  :)
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: AzCactus on January 10, 2018, 10:15:30 AM
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?

100% :)
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: John Hjorth on January 10, 2018, 10:18:34 AM
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 (http://life-span.healthgrove.com/l/88/87).For Mr. Munger (http://life-span.healthgrove.com/l/94/93).
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: Charlie on January 10, 2018, 10:30:13 AM
"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
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: StubbleJumper on January 10, 2018, 12:50:50 PM
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 (http://life-span.healthgrove.com/l/88/87).For Mr. Munger (http://life-span.healthgrove.com/l/94/93).


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
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: John Hjorth on January 10, 2018, 02:06:35 PM
There is a 98.98% probability that I'll repeat this morbid excersise here on CoBF in a year, StubbleJumper!

Charlie, I couldn't find statistics for billionaires only!

Furthermore, I think  Statler & Waldorf  (http://www.youtube.com/watch?v=14njUwJUg1I) will live on forever.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: kiwing100 on January 10, 2018, 07:28:37 PM

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.

Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: Dynamic on January 11, 2018, 12:33:55 AM
https://www.cnbc.com/video/2018/01/10/warren-buffett-may-be-slowly-passing-the-baton-at-berkshire-hathaway.html (https://www.cnbc.com/video/2018/01/10/warren-buffett-may-be-slowly-passing-the-baton-at-berkshire-hathaway.html)

Yesterday's CNBC Squawk Box Buffett interview in full - just under an hour's viewing. Not too much of Joe and his bricks!
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: petec on January 11, 2018, 01:03:27 AM

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.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: LC on January 11, 2018, 01:19:38 AM
Quote
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.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: ValueMaven on January 11, 2018, 02:57:10 AM
brilliant move by our chairman

ps: JPM raised price target on the b's to $235

sincerely,
ValueMaven
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: longinvestor on January 11, 2018, 05:58:02 AM
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.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: StubbleJumper on January 11, 2018, 07:12:19 AM
Quote
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
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: LC on January 11, 2018, 12:21:17 PM
The other difficulty is that WB/CM have been evolving with the company. They have been making allocation decisions as the war chest has grown and as the annual CFs have grown.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: MarioP on January 11, 2018, 01:50:08 PM

 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.
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: fareastwarriors on January 11, 2018, 01:50:29 PM
Berkshire Hathaway Energy Names William Fehrman as CEO to Replace Greg Abel

http://www.nasdaq.com/article/berkshire-hathaway-energy-names-william-fehrman-as-ceo-to-replace-greg-abel-cm904177 (http://www.nasdaq.com/article/berkshire-hathaway-energy-names-william-fehrman-as-ceo-to-replace-greg-abel-cm904177)
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: bookie71 on January 11, 2018, 01:54:16 PM
I suspect that these two have been "unofficial" directors for years.  This now makes it official.
jmho
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: longinvestor on January 11, 2018, 02:08:18 PM
I suspect that these two have been "unofficial" directors for years.  This now makes it official.
jmho
+1. And they have been making capital allocation decisions in the tens of billions for years. So much for a headline.

Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: longinvestor on January 12, 2018, 07:11:35 AM
"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

Thanks for posting the full, no-commercial version.

One thing that caught my attention is that now we have three vice chairmen and what Buffett and Munger thought about that. Both Buffett and Munger said that recognition of the good contributions was overdue. But Buffett seemed to relish the prospect of the two additional vice chairmen...it's good for Berkshire but it is especially good for me.. I think they are just pulling out all the stops by freeing Jain and Abel. This is about the future but how sweet would it be if the deals start to flow faster, now!
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: John Hjorth on January 12, 2018, 01:39:02 PM
Thank you for sharing your thoughts, longinvestor. To me, you're really good at picking up the important details in interviews.

Somehow, the oversight of Berkshire from an operational point of view must have been daunting for many years now. This is to me the right decision, to lift off some workload on Mr. Buffett. [I have no idea to which extent Mr. Munger has been involved in that part of Berkshire operations.]
Title: Re: BRK to appoint two Vice Chairmen to BRK Board - Jain and Abel
Post by: globalfinancepartners on January 12, 2018, 02:55:53 PM
Berkshire added an amended 8K today that has a nice description for the two new Executive Officers.  It will be interesting to see the Form 3 filings in the near future detailing for the first time if either of them own any shares of Berkshire.  Abel owns shares of BHE and both are quite wealthy but it will be interesting to see if Ajit bought the stock over the years.

"On January 9, 2018, Gregory E. Abel, age 55, was elected to be an Executive Officer of Berkshire as its Vice Chairman – Non Insurance Operations. Mr. Abel joined Berkshire Hathaway Energy Company (“BHE”), a 90.2% owned subsidiary of Berkshire, in 1992 and since 2011 has been BHE’s Chairman and CEO. Mr. Abel currently serves as a Director of The Kraft Heinz Company, a manufacturer and marketer of food and beverage products, and AEGIS Insurance Services, Inc., a provider of property and liability insurance for the energy industry, and Nuclear Electric Insurance Limited, an insurer of nuclear power utilities.

Additionally, on January 9, 2018, Ajit Jain, age 66, was elected to be an Executive Officer of Berkshire as its Vice Chairman – Insurance Operations. Mr. Jain joined Berkshire’s insurance group in 1986 and since 1996 has been Executive Vice President of National Indemnity Company, a wholly owned subsidiary of Berkshire. Mr. Jain currently serves as a Trustee of Rockefeller University, a leading biomedical research university.

Both Mr. Abel and Mr. Jain possess the attributes the Governance, Compensation and Nominating Committee of Berkshire’s Board of Directors as well as Berkshire’s Chairman and CEO, Warren E. Buffett, consider to be essential if one is to be an effective Board member. Specifically, both Mr. Abel and Mr. Jain have integrity, business savvy, an owner-oriented attitude and a deep genuine interest in Berkshire. These attributes have been evident during each of their careers as leaders of two of Berkshire’s most important business groups."