Greg Abel: The Heir to Warren Buffett’s Legacy and the Future of Berkshire Hathaway
Gregory Abel, widely recognized as the heir apparent to Warren Buffett at Berkshire Hathaway, has charted a remarkable course from his modest beginnings in Edmonton, Canada, to the upper echelons of one of the world's most esteemed conglomerates. Born on June 1, 1962, Abel completed his commerce degree at the University of Alberta in 1984. He commenced his professional journey as an accountant with PricewaterhouseCoopers (PwC), where he gained foundational experience in finance and business operations. In 1992, Abel transitioned to CalEnergy, a modest geothermal electricity producer, marking the onset of his enduring association with the energy sector.
Greg Abel’s leadership abilities became particularly evident when he took over as president of CalEnergy in 1998. At that time, the company was a relatively small player in the energy sector, primarily focused on geothermal power production. However, Abel had a broader vision for its expansion and began pursuing a strategy of acquisitions and diversification.
One of his most significant moves was leading CalEnergy’s acquisition of MidAmerican Energy Holdings in 1999. MidAmerican was a larger and more diversified utility company based in Des Moines, Iowa, with a strong presence in electricity and natural gas distribution. This acquisition transformed CalEnergy from a niche geothermal energy company into a more comprehensive and robust energy provider. Recognizing the importance of this transition, the company rebranded itself as MidAmerican Energy Holdings, a name that reflected its expanded scope and ambitions.
Berkshire Hathaway's acquisition of MidAmerican in 2000 integrated Abel into the Berkshire family. He was appointed CEO of MidAmerican in 2008, a position he held until 2018. During his tenure, Abel oversaw significant expansions, including the acquisitions of PacifiCorp in 2005 and NV Energy in 2013, solidifying the company's footprint in the energy sector. In 2018, Greg Abel was appointed Vice Chairman of Berkshire Hathaway for Non-Insurance Business Operations, significantly expanding his managerial role within the company. This appointment was a major milestone in his career, solidifying his status as one of the key leaders of the conglomerate and the likely successor to Warren Buffett.
Broad Range of Responsibilities
In his new role, Abel took control of all non-banking and non-insurance assets of Berkshire Hathaway. Unlike the company's insurance business, which includes giants like GEICO and Berkshire Hathaway Reinsurance Group, these assets cover a wide range of industries.
Today, he oversees more than 90 subsidiaries operating in sectors such as:
- Rail Transportation – The largest asset here is BNSF Railway, one of the leading railroad companies in the U.S., handling a significant portion of the country's freight transport.
- Manufacturing and Industry – This includes Precision Castparts (aerospace components), Marmon Holdings (infrastructure and engineering equipment), Lubrizol (chemical products), and more.
- Retail and Consumer Goods – Companies in this sector include See’s Candies (chocolate products), Nebraska Furniture Mart (furniture retail chain), Dairy Queen (fast-food restaurant chain).
- Energy – Although he stepped down as CEO of Berkshire Hathaway Energy in 2018, he continues to oversee the company’s energy business, including PacifiCorp, MidAmerican Energy, and NV Energy.
These non-insurance operations generate approximately $150 billion in annual revenue, making them a vital part of Buffett’s business empire. More than 250,000 employees work in companies under Abel’s supervision, making him one of the most influential figures in corporate leadership.
With his ability to allocate capital efficiently, identify promising acquisitions, and implement long-term strategies, Abel has established himself as a reliable leader. In many ways, his management style mirrors that of Buffett—focused on fundamental value, patience in investments, and a commitment to sustainable growth.
Business style
Abel's management style is characterized by strategic acumen and a penchant for identifying and executing value-driven acquisitions. His approach has been instrumental in Berkshire Hathaway's sustained growth, with notable deals like the purchase of Dominion Energy’s pipeline business in 2020 further enhancing the company's asset base.
In May 2021, Warren Buffett publicly acknowledged Abel as his designated successor, affirming the board's confidence in his leadership capabilities. Buffett stated, "The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning."
Abel's compensation reflects his integral role within Berkshire Hathaway. In 2022, he received a total remuneration of $19 million, comprising a $16 million base salary and a $3 million bonus. Additionally, his 1% stake in Berkshire Hathaway Energy underscores his vested interest in the company's prosperity.
The Road Ahead
Serving as Vice Chairman of Non-Insurance Business Operations has been a crucial step in preparing Abel for potentially leading Berkshire Hathaway. This role allows him to integrate more deeply into the company’s structure and work closely with its key business units, laying a solid foundation for managing the conglomerate in the future.
Dr. Viktor Kalm is a Senior Investment Analyst at Alpha Spread. He has over seven years of experience in corporate finance, specializing in financial modeling, business valuation, and strategic planning services. Previously, as a hedge fund manager, he focused on private equity management, consistently delivering positive returns to his clients.
Dr. Viktor Kalm is a Senior Investment Analyst at Alpha Spread. He has over seven years of experience in corporate finance, specializing in financial modeling, business valuation, and strategic planning services. Previously, as a hedge fund manager, he focused on private equity management, consistently delivering positive returns to his clients.
