Sokol Resigns as NetJets Leader
David Sokol has resigned from his job as chairman of several Berkshire Hathaway-owned companies, including fractional-share provider NetJets. According to a statement issued late this afternoon by Berkshire Hathaway’s Warren Buffett, Sokol’s assistant submitted the resignation letter to Buffett late in the day on Monday, March 28. Sokol had indicated interest in resigning from Berkshire Hathaway on two previous occasions, Buffett noted, “most recently two or so years ago,” but he was able to persuade Sokol to stay on board.
Buffett credits Sokol with turning around NetJets, and earlier this year Berkshire Hathaway reported profits at its “other services” segment, which includes NetJets and FlightSafety International, as having enjoyed pre-tax profits of $984 million during 2010 versus a $91 million loss in 2009. On March 1, NetJets announced a purchase agreement for up to 120 Bombardier Global jets worth up to $6.7 billion. Last October, Sokol surprised NBAA show-goers with an order for 125 Embraer Phenom 300s, reversing an era of cancelled orders and downsizing of the fleet and personnel ranks.
Sokol took over as chairman of NetJets in August 2009, after NetJets founder Richard Santulli was forced out of the company following its losses of millions of dollars per year. Sokol was also chairman of MidAmerican Energy Holdings and Johns Manville. NetJets president Jordan Hansell will become chairman and CEO, according to Buffett.
“Dave’s contributions have been extraordinary,” Buffett wrote in his statement. “At NetJets, Dave resurrected an operation that was destined for bankruptcy, absent Berkshire’s deep pockets.”
Buffett included additional information in his statement, which also concerns Sokol’s involvement in Berkshire Hathaway’s March 14 offer to purchase Lubrizol, now awaiting approval by Lubrizol’s shareholders.
According to Buffett, “Dave’s letter was a total surprise to me, despite the two earlier resignation talks. I had spoken with him the previous day about various operating matters and received no hint of his intention to resign. This time, however, I did not attempt to talk him out of his decision and accepted his resignation.”