NEW YORK (Reuters) — Berkshire Hathaway
Inc's <BRKa.N> BNSF Railway Co has moved Chief Executive Matthew
Rose to an executive chairman role, renewing speculation he might be
in line to replace Warren Buffett at Berkshire's helm.
As executive chairman, Rose, 54, will work on organizational
planning, market positioning and public policy at BNSF over the next
decade, the company said on Wednesday.
Carl Ice, 57, will replace Rose as chief executive at the nation's
largest railroad, starting on January 1.
Ice has been at the railroad for 34 years, and been its president
since November 2010.
"Buffett has a track record of retaining good executives for long
periods of times, and this will potentially free up Matt Rose to
assist with other projects with Berkshire as warranted," said James
Armstrong, president of Henry H. Armstrong Associates in Pittsburgh,
which invests more than $400 million, roughly 25 percent of which is
in Berkshire.
"Rose is likely on the short list to become CEO," Armstrong added.
Berkshire bought the roughly 77 percent of the former Burlington
Northern Santa Fe Co it did not already own for $26.5 billion in
2010.
In this year's third quarter, the railroad posted a $989 million
profit, about 20 percent of Berkshire's $5.05 billion.
"BNSF's performance has far exceeded the high expectations I had at
the time of Berkshire's purchase," Buffett said in a statement. "The
combination of Matt's and Carl's talents is the perfect arrangement
for the future. I consider Berkshire very fortunate to have these
men at BNSF's helm."
Rose was not immediately available for an interview. Buffett,
through an assistant, did not immediately respond to a request for
further comment.
"YOUNG AND TALENTED"
Considered one of the world's greatest investors, Buffett is now 83
and Berkshire has been preparing for many years for his eventual
departure from the company he has run since 1965.
Speculation about who could succeed the second-richest American have
picked up in recent years as Buffett has aged and survived prostate
cancer.
Berkshire plans to split Buffett's role in three, with one person
serving as chief executive, Buffett's son Howard as non-executive
chairman, and one or more others as chief investment officer.
The Omaha, Nebraska-based company has more than 80 units selling
such things as Russell athletic apparel, Geico car insurance,
chemicals and furniture. It also owns dozens of newspapers,
including the Omaha World-Herald.
Buffett has said that he and Berkshire's board are in agreement on
who would step in as chief executive when the need arises, but has
not yet publicly identified that person. He has said Berkshire has
three internal candidates, all men.
Investors have speculated that other candidates could be insurance
chief Ajit Jain, MidAmerican Energy chief Greg Abel, or perhaps
portfolio manager Ted Weschler. Some have also mentioned Geico's
Tony Nicely, but he is older than the others.
"Rose is young and talented, and when you're young and talented,
you're not looking for ways to do less," said Thomas Russo, a
partner at Gardner Russo & Gardner in Lancaster, Pennsylvania. "He
may have to do less on a daily basis at Burlington, which would free
up his time to work on other things at Berkshire."
Russo helps invest more than $6 billion, of which more than 10
percent is in Berkshire.
The Burlington transition is similar to what occurred at MidAmerican
Energy in 2008, when David Sokol became chairman, and Abel replaced
him as chief executive.
Sokol was also considered a candidate to succeed Buffett as
Berkshire chief executive. He left the company abruptly in 2011 amid
questions about a personal investment in a chemicals company he was
negotiating for Berkshire to buy.
In Wednesday trading, Berkshire Class A shares fell $1,840 to
$171,630 and its Class B shares fell $1.10 to $114.51.
(Reporting by Michael Erman and Jonathan
Stempel; Additional reporting by Jennifer Ablan; editing by Andre Grenon and Leslie Gevirtz)
