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Howard Buffett Says Rose May Join Jain in Father’s Circle

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May 1 (Bloomberg) -- Howard Buffett, who may help select his father’s successor at Berkshire Hathaway Inc., said Warren Buffett’s circle of most trusted managers, like Tony Nicely and Ajit Jain, will expand to include railroad chief Matthew Rose.

Warren Buffett, Berkshire’s 80-year-old chief executive officer, is reviewing the ranks of the more than 70 operating subsidiaries he oversees in search of a successor. Howard Buffett, the billionaire’s son and a director at Omaha, Nebraska-based Berkshire, said the heads of many of the company’s units have won his father’s trust.

“A lot of these CEOs are close to my Dad,” Howard Buffett said today in a Bloomberg Television interview in his Omaha home. “I mean Tony, Ajit. And I’m sure Matt will be closer as time goes on.”

The elder Buffett is seeking an executive to run the $200 billion company he built over more than four decades. Buffett told shareholders at the company’s annual meeting yesterday that the leading candidate was “straight as an arrow.” Investors are seeking reassurances after Berkshire said last month that departed manager David Sokol, 54, violated Berkshire’s insider-trading rules.

Rose, 52, joined Berkshire last year after selling Burlington Northern Santa Fe, which he runs as CEO, to Buffett for $26.5 billion. Buffett has overseen Nicely, 67, CEO of car insurer Geico, since the 1996 when Berkshire acquired full control of the unit. Buffett hired Jain more than 20 years ago to run a reinsurance business for Berkshire.

“Candidates change,” Howard Buffett said. “People often want him to come out and say here’s the person, but that’d be foolish because that person can change.”

Buffett’s Best Deal

Warren Buffett uses the annual meetings and his yearly letters to shareholders to single out managers for praise. In the most recent letter, published in February, Buffett placed Rose in the company of Sokol and energy executive Gregory Abel, saying he was “proud and grateful” for the performance of the three executives. Yesterday, Buffett said that hiring Jain, 59, was his “best deal.”

Berkshire has four candidates to become the next CEO, the company said in a February regulatory filing, without identifying them. The successor will take responsibility for a collection of businesses including insurance, energy, jewelry and freight. Warren Buffett, who is also chairman, has said he would like his son Howard to follow him in that role.

Berkshire took $2.25 billion in dividends from Fort Worth, Texas-based Burlington Northern through February, almost triple the railroad’s payout rate before the takeover. The sum includes a $1 billion payment in February.

“It was excess cash,” Rose said in an interview yesterday. Asked whether dividends will continue at the same pace as in the first 13 months of Berkshire’s ownership, Rose said “We hope so, we’ll see.”

To contact the reporter on this story: Betty Liu in Omaha at bliu17@bloomberg.net; Andrew Frye in New York at afrye@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

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