By Jonathan Stempel and Michael Erman
NEW YORK Dec 11 Berkshire Hathaway Inc's
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 Jan. 1.
Ice has been at the railroad for 34 years, and been its
president since Nov. 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
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
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
Russo helps invest more than $6 billion, of which more that
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.