Will Santulli Succeed Buffett?

 - September 20, 2006, 10:16 AM

In his annual letter to shareholders, 75-year-old Berkshire Hathaway chairman Warren Buffett addressed the issue of management succession at his company: “As owners, you are naturally concerned about whether I will insist on continuing as CEO after I begin to fade and, if so, how the board will handle that problem. You also want to know what happens if I should die tonight.”

The investment mogul wrote, “We have three managers at Berkshire who are reasonably young and fully capable of being CEO,” though he stopped short of identifying the three managers. However, this hasn’t stemmed speculation in the general and financial press about just who might be among those that could succeed Buffett. Interestingly, nearly all of these speculative lists include Richard Santulli, the chairman and CEO of Berkshire-owned NetJets, among others. One article published by SmartMoney goes so far as to say Santulli is the one: “For the record, my money is on NetJets president [sic] Richard Santulli.”

However, only the Berkshire Hathaway board truly knows who the three candidates are and who will succeed Buffett, should need be. “Berkshire’s board has fully discussed each of the three CEO candidates and has unanimously agreed on the person who should succeed me if a replacement were needed today,” Buffett said.

“The directors stay updated on this subject and could alter their view as circumstances change–new managerial stars may emerge and present ones will age,” meaning that if 62-year-old Santulli really is currently on the short list to take Buffett’s place, he might not be at some point in the future.

Buffett concluded the subject wryly: “And while we are on the subject, I feel terrific.”