End of ‘The Berkshire Way’? Combs’ departure isn’t only big change as
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Todd Combs’ surprise departure from Berkshire Hathaway got most of the attention when it was announced this week.
There were also, however, several additional personnel changes in Monday’s three-page news release that signal the company is moving toward a more conventional structure as Warren Buffett prepares to transfer his CEO title to Greg Abel in less than three weeks.
Todd Combs in 2014 CNBC interview
Coombs is going to JPMorgan Chase next month to head a $10 billion “Strategic Investment Group” for the company’s new $1.5 trillion “Security and Resiliency Initiative” to help “companies enhance their growth, spur innovation and accelerate manufacturing, primarily in the United States.”
Coombs has been on JPM’s board since 2016 but is leaving that post as he takes the new job.
In its news release, JPM’s Chairman and CEO Jamie Dimon called Combs “one of the greatest investors and leaders I’ve known.”
In Berkshire’s announcement, Warren Buffett is quoted as saying “JPMorgan, as usually is the case, has made a good decision,” praising Combs for making “many great hires at GEICO.”
Combs, who is 54 years old, joined Berkshire in 2010 as a portfolio manager.
In 2020, he got an additional role as CEO of Geico, Berkshire’s auto insurer, adding to speculation he might become Buffett’s future successor.
At May’s annual meeting, insurance Chief Ajit Jain said Combs “has done a great job for us in terms of turning around” Geico’s operations, citing improvements in “matching rate to risk” and incorporating telematics, the electronic monitoring of how policyholders drive, in setting rates.
But Jain added, “I still think we need to do more in technology.”
The task of doing more in technology at Geico now belongs to its new CEO, Nancy Pierce, who moves up from chief operating officer. She’s been at the insurer since 1986, when she started as a claims associate.
The question of who will be assuming Combs’ duties as portfolio manager, however, is still open.
Changing the ‘Berkshire Way’
Buffett has been saying Abel will have overall responsibility for the portfolio, but it’s not clear how much of that responsibility will be delegated to the other portfolio manager, Ted Weschler.
Berkshire could also hire one or more additional portfolio managers and Buffett himself, in his role as chairman, could help fill the gap left by Combs.
Traditionally, Berkshire has been opaque about who’s been responsible for the smaller holdings in its portfolio and hasn’t said much about the portfolio managers’ track records.
In an email to Buffett Watch, Hudson Value Partners’ Christopher Davis urges Berkshire to “become more transparent about the roles and responsibilities of Abel and Wechsler in managing the public equity portfolio.
“We all love the ‘Berkshire…
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