Warren Buffett, 87, chats with Omaha native Alexander Payne recently in Omaha. Buffett said he began thinking about the new positions at Berkshire for Abel and Jain about six weeks ago and talked individually with the 11 other Berkshire directors, who approved of the idea.

By naming two potential successors publicly for the first time Wednesday, Warren Buffett assured his shareholders of two important things, observers said:

One, the next leaders of Berkshire Hathaway Inc. are proven business operators. And two: Buffett remains healthy, energetic and committed to the business despite being one of the country’s oldest CEOs, at 87.

“I feel terrific, and I love what I do,” Buffett said on CNBC about a half-hour after Berkshire sent out a press release announcing that Ajit Jain, 66, is now the Omaha-based company's vice chairman of insurance operations and Greg Abel, 55, is vice chairman of non-insurance operations.

The two new titles indicate that out of the top executives at Berkshire businesses, Jain and Abel are the two who would succeed Buffett — at least as things stand now.

Even though he named a pair of possible successors, Buffett said he has the enthusiasm and ability to continue running the business he has built from a small investment partnership into a $500 billion conglomerate.

Under the new arrangement, the managers of Berkshire’s 100-plus businesses will report to the two vice chairmen instead of directly to Buffett, as they have until now. Jain and Abel will decide those managers’ compensation, except for some who were not named but whose pay is “fixed” under earlier acquisition agreements, Buffett said.

Abel and Jain also will oversee smaller acquisitions, while Buffett and Charlie Munger — who is 94 and until now the only vice chairman on Berkshire’s 14-person board — will handle big ones and other uses of Berkshire’s money, including more than $100 billion in cash, investments worth $150 billion and ownership of businesses worth hundreds of billions of dollars.

Berkshire officials said Jain and Able weren’t available to comment on their promotions.

Buffett, 87, said he has “slipped” in some ways typical of aging — he mentioned balance and endurance, and in the past has said his hearing is diminishing — but said he remains able and excited to continue his Berkshire duties.

“I can’t wait to go to the office in the morning. There’s been no change in that,” he told interviewer Becky Quick on CNBC’s early-morning Squawk Box business program. He added that he would tell Berkshire shareholders if his health was impeding his abilities as CEO.

Asked whether he could serve as CEO for another decade, Buffett said, “Ten years is a long time,” but when he visits his doctors he asks whether he’s good for another five years, and they agree that he is.

In the past Buffett has announced his health problems, including prostate cancer in 2012 and removal of polyps from his colon in 2000.

Cathy Seifert, an analyst with CFRA Research in New York who follows Berkshire, told The World-Herald that naming the two vice chairman — titles suggested by Munger — Buffett removes much of the succession uncertainty that has worried many Berkshire shareholders.

“I think it was a very smart move,” Seifert said of Buffett’s TV appearance, so people could see him and not speculate that something was wrong with his health.

She said naming Abel and Jain also may signal that, just as Buffett and Munger have run Berkshire since the 1960s, two people may run Berkshire in the future, with one as the CEO and the other having a strong role as vice chairman.

Buffett said there is no “horse race” between the two to see who becomes CEO.

Greggory Warren, a Morningstar analyst who follows Berkshire, said in 2016 that Abel’s experience in acquisitions would make him qualified to invest Berkshire’s money as CEO.

Buffett has said Jain may be irreplaceable as head of Berkshire’s insurance division, which makes up roughly half of Berkshire’s businesses and generates billions of dollars to invest elsewhere.

Berkshire shareholders and others have worried for decades about what would happen to Berkshire if Buffett were no longer in charge. In the 1950s, his early investment partners formed a committee to consider the question, and Buffett often is asked what he calls the “runaway truck” question: What would happen to Berkshire if he suddenly died?

In response, he has said that Berkshire’s directors spend considerable time on the issue and have a clear plan ready in case it’s needed, with qualified people — until now, unnamed — available to step in.

He has said his children would tell him if he is losing his mental capacities. One son, Howard, serves on Berkshire’s board. Buffett has recommended that Howard succeed him as chairman but not take an executive job at Berkshire.

Buffett has said it wouldn’t make sense to name his successor publicly ahead of time, partly because he has no intention of leaving the job, because the board has its plan in place and because the named successor would be in an awkward position, possibly for a long time.

He said Wednesday that he has considered doing “something like this” at various times and probably should have done it a few years ago. Six weeks ago or so, he said, “I just decided, why not now?” He talked with Berkshire directors one at a time and “they jumped all over it.”

In a 15-minute telephone meeting Tuesday, the board expanded its membership from 12 to 14, and Buffett named Jain and Abel to the new seats, with the vice chairman titles. Aside from Buffett, Jain and Abel are the only Berkshire executives who are on the company’s board.

“It just makes sense now,” Buffett said of the announcement. “They are the two key figures at Berkshire.”

Abel and Jain already are well-known within Berkshire circles and in business, so adding the possibility of them becoming CEO of Berkshire does not thrust them into the spotlight much more.

Another man mentioned by some as a possible Buffett successor is Matt Rose, 57, of BNSF Railway. In 2013 Rose was named executive chairman of the Berkshire-owned railroad, with Carl Ice succeeding him as CEO. Rose was not mentioned in Wednesday’s CNBC interview.

Jain is considered one of the world’s top insurance executives, and Abel is known for the series of acquisitions carried out by the Des Moines-based utility that is now called Berkshire Hathaway Energy.

Buffett said there is value for a person who may succeed him in becoming familiar with the strengths and weaknesses of the managers of Berkshire’s businesses.

“They’ve both got Berkshire in their blood,” Buffett said. Someone will move up to be CEO of Berkshire Hathaway Energy, he said, but otherwise there will be no changes in personnel as a result of the promotions.

In a telephone interview with CNBC, Vice Chairman Munger, who shares the podium with Buffett during the company’s annual meetings, called the Jain and Abel promotions “a very good idea.”

The arrangement could continue “a long time” before one of them becomes CEO, Buffett said, but “if something happens to me, it could be very soon.”

The Omaha World-Herald is owned by Berkshire Hathaway Inc.

Get the latest development, jobs and retail news, delivered straight to your inbox every day.

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Commenting is limited to Omaha World-Herald subscribers. To sign up, click here.

If you're already a subscriber and need to activate your access or log in, click here.

Load comments

You must be a full digital subscriber to read this article You must be a digital subscriber to view this article.