Warren Buffett- Berkshire has 'right person' as heir

The world's wealthiest person in 2008, Warren Buffett, told investors weekend that his company, Berkshire Hathaway Inc. had found his successor, and the company's vice chairman, Charlie Munger, identified two Berkshire executives as candidates.

In Berkshire's annual report to shareholders, Greg Abel, the head of Berkshire's energy companies, and Ajit Jain, a top insurance executive, were said by Munger to be "proven performers who would probably be under-described as 'world-class.'"

"'World-leading' would be the description I would choose," Munger said in a letter to Berkshire shareholders. "In some important ways, each is a better business executive than Buffett."

Buffett's son, Howard, would become non-executive chairman after the departure of his father, who is also Berkshire's chairman.

In his previous letters to shareholders, the 84-year-old Buffett has said Berkshire board had been fully aware of his chosen successor but that he was keeping his options open.

Investors have long speculated about who would, or could, succeed Buffett, particularly after he was diagnosed with, and then beat, prostate cancer in 2012.

Munger, whom Buffett describes as "my partner," is 91.

"Both the board and I believe we now have the right person to succeed me as CEO – a successor ready to assume the job the day after I die or step down," Buffett said.

"In certain important respects, this person will do a better job than I am doing," Buffett added.

Berkshire on Saturday also reported a 17 percent drop in fourth-quarter net income, but a 2 percent increase in full-year profit. Operating profit rose in both periods.

Neither Buffett's nor Munger's letter on Saturday referred by name to Matthew Rose, executive chairman of the BNSF railroad unit, who has also been mentioned by investors as a possible successor.

Buffett said BNSF is, by far, Berkshire's most important non-insurance unit but "was not good in 2014, a year in which the railroad disappointed many of its customers" despite capital outlays far exceeding those of Union Pacific Corp, its main rival.

BUFFETT'S ABCs FOR NEW CEO

Buffett strongly suggested in his letter that his potential successor already works within Berkshire and laid out the challenges facing his successor as Berkshire grows ever larger.

He said Berkshire's earnings and capital resources will eventually reach a level where management will not be able to intelligently reinvest all of the company's earnings.