Berkshire's future CEOs to have 'significant' part of wealth invested in holding company: Warren Buffett in annual letter

Investors keenly follow the annual dispatches from Warren Buffett, on the performance of the holding company he continues to chair. Image Source: Reuters)

The future CEOs of Berkshire Hathaway will have to be "deeply invested", literally, in the American-headquartered conglomerate, according to Warren Buffett’s latest annual letter to the shareholders.

In his 2022 letter to shareholders, Buffett wrote: “Our future CEOs will have a significant part of their net worth in Berkshire shares, bought with their own money. And yes, our shareholders will continue to save and prosper by retaining earnings.”

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Warren Buffett continues to be the CEO of Berkshire Hathaway and Greg Abel, CEO of Berkshire Hathaway Energy, is expected to succeed him.

Investors keenly follow the annual dispatches from Buffett, on the performance of the holding company he continues to chair. This year, he has covered the philanthropic bent of Berkshire’s investors, the forgotten advantage of long-term investors, few winning investments that work wonders, Berkshire’s taxpaying record and Vice Chair Charlie Munger’s unmatched wisdom, among other things.

Buffett has also covered the role of CEOs in Berkshire. He wrote that Berkshire’s CEO will also be a Chief Risk Officer, a task Buffett wrote is “irresponsible to delegate”.

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He also wrote about liquidity in Berkshire’s holdings. “As for the future, Berkshire will always hold a boatload of cash and United States Treasury bills along with a wide array of businesses. We will also avoid behavior that could result in any uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses.”

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Sticking to the hustle

He ended the letter with notes on last year’s meeting, about being “shameless” about their “commercial hustle” even when it was a get-together that came after three years, and the dates for this year’s annual shareholder meeting.

“From the opening bell, we went straight for your wallet. In short order, our See’s kiosk sold you eleven tons of nourishing peanut brittle and chocolates. In our PT Barnum pitch, we promised you longevity,” he wrote. Buffett expanded particularly on See’s sales at last year’s meet, of 10 sales per minute in prime operating time, and pointed out that “all the goods were purchased in a single location selling products that haven’t been materially altered in 101 years.

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“What worked for See’s in the days of Henry Ford’s model T works now,” he added.

In closing, he wrote that the annual meeting will be held in Omaha on May 5 and 6, and promised a good time for all.