UPDATE 2-BNSF CEO Rose changes roles, renews Buffett succession talk

Wed Dec 11, 2013 6:40pm EST

By Jonathan Stempel and Michael Erman

NEW YORK Dec 11 (Reuters) - Berkshire Hathaway Inc's BNSF Railway Co moved Chief Executive Matthew Rose to an executive chairman role, renewing speculation that he may be in line to replace Warren Buffett at Berkshire's helm.

As executive chairman, Rose, 54, will work on activities including 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, beginning Jan. 1. Ice has been at the railroad for 34 years, and has been president of BNSF 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 said.

Berkshire has been preparing to eventually replace Buffett, 83, considered by many to be one of the greatest investors ever, for many years.

And questions about succession for Buffett, the second-richest American, have picked up in recent years as he has aged and battled prostate cancer.

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.

Aside from Rose, investors have speculated that this person could be insurance chief Ajit Jain, MidAmerican Energy chief Greg Abel, or perhaps portfolio manager Ted Weschler.

Berkshire plans after Buffett leaves to split his role in three. The new chief executive will serve alongside Buffett's son, Howard, who will be non-executive chairman. One or more others will become the company's chief investment officer.

"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."