Top manager leaves Warren Buffetts Berkshire as incoming CEO names team

OMAHA, Neb. (AP) — Berkshire Hathaway’s new CEO, Greg Abel, is assembling his team to help lead the conglomerate that Warren Buffett founded starting in January after several notable departures.

Berkshire said monday In addition to Buffett, who also served as CEO of Geico for several years, Todd Combs, one of his two investment managers, and longtime Chief Financial Officer Mac Hamburg are leaving, he said. While Combs serves as a special advisor to CEO Jamie Dimon during Hamburg’s retirement after 40 years, he takes a job helping J.P. Morgan decide how to invest $10 billion.

Combs’ departure is the biggest news in the announcement, which also included the creation of general counsel positions and a new executive for several of Berkshire’s owned retail and consumer businesses. But the question now is whether insurance VP Ajit Jain, investment executive Ted Weschler and all the CEOs of Berkshire’s numerous businesses will stay.

“There are still two elephants in the room: What will Ajit Jain do, what will Ted Weschler do?” said CFRA Research analyst Cathy Seifert.

Geico Chief Operating Officer Nancy Pierce has been promoted to CEO, but Berkshire has not offered any details on how Abel will handle the company’s stock portfolio, which is worth more than $300 billion. Buffett said last year that Abel would do this. ultimately be responsible to pick stock, find acquisitions, and decide where to invest to reinvest in Berkshire’s dozens of businesses while running all those companies. But Abel was never a stock investor, so Combs and Weschler were planned to help manage the portfolio.

But Dimon’s move to hire Combs from Berkshire and outside the board of JP Morgan, where he served for nine years, prevented that from happening. “Todd Combs is one of the greatest investors and leaders I know, having successfully managed investments alongside Warren Buffett, the most respected and successful long-term investor of our time,” Dimon said.

Keefe, Bruyette and Woods analyst Meyer Shields, who has followed Berkshire for more than a decade, said he expects more turnover in the coming months as Buffett steps down as CEO, a position he held for more than six decades. Buffett will remain chairman, but Shields said “we expect more turnover in the coming months as the stigma of working for Mr. Buffett’s successor is not (at least not yet) the same as working for Mr. Buffett himself.”

Many of the upcoming departures may not make headlines, but Shields said he expects some CEOs of Berkshire subsidiaries who are well past typical retirement age to leave because they can no longer work for Buffett.

But CEOs who reported to Abel for several years said: they were impressed with the business acumen he demonstrated while overseeing businesses as diverse as Dairy Queen, Brooks running shoes, Iscar Metalworking, Marmon Holdings, and Helzberg Diamonds. Buffett said Abel could get more out of any business Berkshire has because Abel is more hands-on.

But accepting the fact that he would have less time as CEO, Abel appointed NetJets CEO Adam Johnson to a new role overseeing all of Berkshire’s consumer, services and retail businesses. Abel will continue to oversee all manufacturing, utilities and industrial businesses, including BNSF railroad and Berkshire Hathaway Energy.

Shields said he didn’t expect a major change in direction or for Berkshire to split under Abel, but he was impressed by Buffett’s willingness to break away from the way he’s always done things and implement a more typical corporate structure.