Monday, May 4, 2009
Ajit Jain may succeed Warren Buffett as CEO
WASHINGTON: India born Ajit Jain is one of three top executives who could succeed billionaire investor Warran Buffett as CEO of the investment giant, Berkshire Hathaway Inc.
But no one knows when the change will occur as the 78-year-old Buffett has not indicated when he plans to call it a day. On Saturday, Buffett once again had flattering things to say about Jain, who has worked for him since 1986, currently runs his re-insurance business and is one whom he talks with every day.
At the company’s annual meeting in Omaha, Nebraska, Buffett said it would be impossible to replace Jain at Berkshire’s insurance operations, remarking: ‘‘Ajit is needed, and we won’t find a substitute for him.’’
‘‘You can do enormous damage in the insurance business with your pen, and we’ve given our pen to Ajit in a way we wouldn’t give it to anybody else,” he said.
The legendary investor’s job will eventually be split with his son, Howard, succeeding him as chairman, and a still to be chosen Chief Executive Officer and Chief Investment Officer.
Born in Orissa, the 57-year-old Jain is an alumnus of IIT Kharagpur and the Harvard Business School.
The other two top contenders from within the Berkshire empire for the CEO perch are David Sokol, chairman of MidAmerican Energy Holdings Company, and Tony Nicely, CEO of the company’s GEICO Corp.
According to reports, while the candidates for CEO already work for Berkshire, at least one of the contenders for the post of Chief Investment Officer is an outsider.
Buffett sees little logic in choosing the CEO successor well ahead. Reports quoted him as commenting that he doesn’t see any value in naming the person as the other two not chosen might leave Berkshire.As he put it, ‘It would be a waste of talent. I don’t really see any advantages in having some crown prince around.’’
As for Jain, this is not the first time that Buffett has showered praise on him.
‘‘Ajit’s value to Berkshire is enormous,’’ he said in 2004. In a comment a year ago, Buffett said: "Ajit came to Berkshire in 1986. Very quickly, I realised that we had acquired an extraordinary talent. So I did the logical thing: I wrote his parents in New Delhi and asked if they had another one like him at home. Of course, I knew the answer before writing. There isn’t anyone like Ajit."
For Berkshire Hathaway, as for most of Corporate America, it has been a bad time. Its first-quarter operating profit has fallen and the company’s book value is down by 6 percent. The operating profit is down 12 percent compared to a year ago.
As for the four candidates deemed to be in the race to replace him as Chief Investment Officer, Buffett commented: "In terms of 2008 by itself, you would not say that they covered themselves with glory. But I didn’t cover myself in glory either in 2008."
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