Top manager leaves Warren Buffett’s Berkshire as incoming CEO names team

Incoming Berkshire CEO Abel Reorganizes Leadership Team as Key Executives Depart

Greg Abel, set to take over as Berkshire Hathaway’s CEO in January, is reshaping the conglomerate’s leadership structure following two significant departures announced Monday.

Todd Combs, who served as one of Berkshire’s investment managers alongside Warren Buffett and was CEO of Geico, is leaving to help JP Morgan Chase manage $10 billion in investments while serving as a special advisor to CEO Jamie Dimon. Meanwhile, longtime Chief Financial Officer Marc Hamburg is retiring after 40 years with the company.

The announcement creates immediate questions about how Abel will manage the sprawling conglomerate Buffett built over more than six decades. The departure of Combs is particularly significant, as he was expected to help manage Berkshire’s massive stock portfolio valued at over $300 billion.

“There’s still two elephants in the room: what’s Ajit Jain going to do and what is Ted Weschler gonna do?” said CFRA Research analyst Cathy Seifert, referring to Berkshire’s insurance vice chairman and its remaining investment manager, respectively.

Buffett previously indicated Abel would ultimately be responsible for the investment portfolio, acquisitions, and capital allocation across Berkshire’s dozens of businesses. However, Abel lacks Buffett’s deep background in stock investing, which had prompted plans for Combs and Weschler to assist with portfolio management.

JP Morgan’s Dimon praised Combs in a statement, calling him “one of the greatest investors and leaders I’ve known, having successfully managed investments alongside the most respected and successful long-term investor of our time, Warren Buffett.” Combs had served on JP Morgan’s board for nine years before being hired away.

As part of the reorganization, Geico’s Chief Operating Officer Nancy Pierce has been promoted to CEO. Abel also created a new executive role, appointing NetJets CEO Adam Johnson to oversee all of Berkshire’s consumer, service, and retail businesses, which include iconic brands like Dairy Queen, Brooks running shoes, and Helzberg Diamonds.

Abel himself will continue to directly manage the manufacturing, utility, and industrial businesses in Berkshire’s portfolio, including BNSF railroad and Berkshire Hathaway Energy, where he previously served as chairman and CEO before being designated as Buffett’s successor.

Keefe, Bruyette and Woods analyst Meyer Shields, who has followed Berkshire for over a decade, expects more leadership changes in the coming months. “We expect more turnover in coming months, since the cachet of working for Mr. Buffett’s successor is not (at least yet) the same as working for Mr. Buffett himself,” Shields noted.

Many CEOs at Berkshire subsidiaries have worked well past typical retirement age, drawn by the opportunity to report directly to Buffett. Shields believes a number of these executives may now choose to depart as the leadership transition unfolds.

Despite these changes, CEOs who have reported to Abel in recent years have expressed confidence in his business acumen. Buffett himself has suggested Abel’s more hands-on management style might extract even greater value from Berkshire’s diverse businesses than his own approach.

The leadership reorganization also includes the creation of a general counsel position, signaling Abel’s move toward implementing a more conventional corporate structure than the lean headquarters operation Buffett has famously maintained. Berkshire’s Omaha headquarters has traditionally operated with minimal staff despite overseeing a conglomerate that employs hundreds of thousands across dozens of businesses.

Shields doesn’t anticipate dramatic changes in Berkshire’s overall direction or structure under Abel’s leadership, but notes his willingness to implement more typical corporate governance practices represents a significant departure from Buffett’s highly personalized management style.

Buffett, 94, will remain as Berkshire’s chairman after stepping down as CEO, maintaining some influence over the company he transformed from a struggling textile manufacturer into one of the world’s most valuable corporations.