Finish of ‘The Berkshire Manner’? Combs’ departure is not solely large change as Buffett transition nears

(That is the Warren Buffett Watch publication, information and evaluation on all issues Warren Buffett and Berkshire Hathaway. You may enroll right here to obtain it each Friday night in your inbox.)

Todd Combs’ shock departure from Berkshire Hathaway bought many of the consideration when it was introduced this week.

There have been additionally, nonetheless, a number of extra personnel modifications in Monday’s three-page information launch that sign the corporate is transferring towards a extra standard construction as Warren Buffett prepares to switch his CEO title to Greg Abel in lower than three weeks.

Combs goes to JPMorgan Chase subsequent month to go a $10 billion “Strategic Funding Group” for the corporate’s new $1.5 trillion “Safety and Resiliency Initiative” to assist “firms improve their progress, spur innovation and speed up manufacturing, primarily in america.”

Combs has been on JPM’s board since 2016 however is leaving that publish as he takes the brand new job.

In its information launch, JPM’s Chairman and CEO Jamie Dimon referred to as Combs “one of many best traders and leaders I’ve identified.”

In Berkshire’s announcement, Warren Buffett is quoted as saying “JPMorgan, as often is the case, has made a great choice,” praising Combs for making “many nice hires at GEICO.”

Combs, who’s 54 years outdated, joined Berkshire in 2010 as a portfolio supervisor.

In 2020, he bought a further position as CEO of Geico, Berkshire’s auto insurer, including to hypothesis he may change into Buffett’s future successor.

At Might’s annual assembly, insurance coverage Chief Ajit Jain stated Combs “has executed a fantastic job for us by way of turning round” Geico’s operations, citing enhancements in “matching fee to danger” and incorporating telematics, the digital monitoring of how policyholders drive, in setting charges.

However Jain added, “I nonetheless suppose we have to do extra in expertise.”

The duty of doing extra in expertise at Geico now belongs to its new CEO, Nancy Pierce, who strikes up from chief working officer. She’s been on the insurer since 1986, when she began as a claims affiliate.

The query of who will likely be assuming Combs’ duties as portfolio supervisor, nonetheless, continues to be open.

Buffett has been saying Abel could have general duty for the portfolio, however it’s not clear how a lot of that duty will likely be delegated to the opposite portfolio supervisor, Ted Weschler.

Berkshire may additionally rent a number of extra portfolio managers and Buffett himself, in his position as chairman, may assist fill the hole left by Combs.

Historically, Berkshire has been opaque about who’s been accountable for the smaller holdings in its portfolio and hasn’t stated a lot in regards to the portfolio managers’ monitor data.

In an electronic mail to Buffett Watch, Hudson Worth Companions’ Christopher Davis urges Berkshire to “change into extra clear in regards to the roles and obligations of Abel and Wechsler in managing the general public fairness portfolio.

“All of us love the ‘Berkshire means’, however there must be some concessions to the actual fact it’s now a trillion-dollar enterprise present process its first management transition.”

A number of aspects of that transition are transferring the corporate away from the famously decentralized “Berkshire means.”

Greg Abel has already been exercising extra administration oversight over the non-insurance working firms than Buffett ever did.

Now a few of them are getting a further layer of administration.

Adam Johnson, the chairman and CEO of NetJets, has been appointed to the newly created position of “President of the Client Merchandise, Service and Retailing companies of Berkshire Hathaway.”

Calling him an “achieved chief with a confirmed potential to ship long-term shareholder worth,” Abel says in Monday’s information launch that Johnson will “help the excellent CEOs of our 32 client merchandise, service and retailing companies, and uphold Berkshire’s tradition and values.”

The remaining non-insurance subsidiaries, together with BNSF, Berkshire Hathaway Vitality, and Pilot, will nonetheless be reporting on to Abel.

Berkshire can be getting its first basic counsel.

Michael O’Sullivan served in that position at Snap Inc. since 2017 after working towards regulation at Munger, Tolles & Olson for greater than twenty years.

Up till now, Berkshire has turned to outdoors regulation corporations to deal with its authorized issues.

(I would not be shocked to see Berkshire add investor, media, and authorities relations departments to its notoriously low-overhead Omaha HQ sooner or later subsequent 12 months.

I do not suppose, alternatively, that Berkshire will likely be paying a dividend so long as Buffett continues to return into the workplace.)

Lastly, in a extra conventional transition, Chief Monetary Officer Marc Hamburg will retire subsequent June after 40 years at Berkshire.

Within the information launch, Buffett stated Hamburg has been “indispensable” and “has executed extra for this firm than lots of our shareholders will ever know.”

His successor will likely be Berkshire Hathaway Vitality CFO Charles Chang.

It is a number of change for a corporation that hasn’t modified a lot through the years.

Keefe, Bruyette & Woods analyst Meyer Shields advised the Wall Avenue Journal, “There’s a lot emotional funding within the persistence of Berkshire as a tradition that when you’ve gotten decent-sized modifications, that is going to trigger extra fear than jubilation over the corporate’s dynamism. That is not why individuals personal Berkshire Hathaway.”

KBW downgraded Berkshire shares to “underperform” earlier this 12 months, partly resulting from Buffett’s impending departure.

Each the A and B shares weathered the storm fairly properly this week, falling virtually 1%, though they’re nonetheless down greater than 7% from their all-time highs in Might, simply earlier than Buffett revealed he would step down as CEO on the finish of the 12 months.

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AUDIENCE MEMBER: What has been the only finest funding of your careers?

WARREN BUFFETT: Most likely, by way of what it is executed already and the place it may go over time, most likely the only finest funding was the primary half of GEICO, which we bought for $40 million. Now the second half price us 2 billion. I am glad I did not purchase it in thirds. (Laughter)

However, , that 40 million will — for half the corporate — will end up very properly.

However GEICO — a few of our companies have progress potential, some do not. And we do not require progress potential as a part of a enterprise.

If a enterprise makes good cash and we are able to use it to purchase different companies, one of many benefits of the Berkshire system is we’ve got a tax environment friendly and type of frictionless means of transferring cash to one of the best alternatives. And GEICO, internally, has nonetheless huge potentialities for progress.

CHARLIE MUNGER: Properly, however GEICO, in any case, price $2 billion for the second half and —

WARREN BUFFETT: Proper.

CHARLIE MUNGER:  — a major variety of tens of tens of millions for the primary half.

Now the search bills that introduced us Ajit Jain, now there was an funding that actually paid a dividend.

I can consider no increased return funding that we have ever made that was higher than that one. (Applause)

And I feel that is a great life lesson. In different phrases, getting the appropriate individuals into your system can ceaselessly be extra necessary than anything. 

BRK.A inventory worth: $748,887.00

BRK.B inventory worth: $499.52

BRK.B P/E (TTM): 15.97

Berkshire market capitalization: $1,077,426,505,703

Berkshire Money as of September 30: $381.7 billion (Up 10.9% from June 30)

Excluding Rail Money and Subtracting T-Payments Payable: $354.3 billion (Up 4.3% from June 30)

No Berkshire inventory repurchases since Might 2024.

(All figures are as of the date of publication, until in any other case indicated)

Berkshire’s prime holdings of disclosed publicly traded shares within the U.S. and Japan, by market worth, primarily based on the newest closing costs.

Holdings are as of September 30, 2025, as reported in Berkshire Hathaway’s 13F submitting on November 14, 2025, apart from:

The total checklist of holdings and present market values is offered from CNBC.com’s Berkshire Hathaway Portfolio Tracker.

Please ship any questions or feedback in regards to the publication to me at alex.crippen@cnbc.com. (Sorry, however we do not ahead questions or feedback to Buffett himself.)

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Additionally, Buffett’s annual letters to shareholders are extremely really useful studying. There are collected right here on Berkshire’s web site.

— Alex Crippen, Editor, Warren Buffett Watch

(Correction: Fixes misspelling of Combs’ title.)