End of ‘The Berkshire Way’? Combs’ departure isn’t only big change as Buffett transition nears

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Todd Combs’s sudden departure from Berkshire Hathaway made the most sense when it was announced this week.

However, Monday’s three-page news release also contained several additional personnel changes that indicate the company is moving toward a more traditional structure as Warren Buffett prepares to transfer his CEO position to Greg Abel in less than three weeks.

Combs is going JPMorgan Chase Next month to lead a $10 billion “strategic investment group” for the company’s new $1.5 trillion “security and resiliency initiative” to “help companies accelerate their growth, foster innovation, and accelerate manufacturing primarily in the United States.”

Combs has been on JPM’s board since 2016 but is stepping down after getting a new job.

In his news release, JPM Chairman and CEO Jamie Dimon called Combs “one of the greatest investors and leaders I know.”

In Berkshire’s announcement, Warren Buffett is quoted as saying “JPMorgan has, as is usually the case, made a good decision,” praising Combs for “making several great appointments at GEICO.”

Combs, who is 54, joined Berkshire in 2010 as a portfolio manager.

In 2020, he received an additional role as CEO of Berkshire auto insurer Geico, leading to speculation that he could become Buffett’s future successor.

At the May 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 “risk-matching rates” and incorporating telematics and electronic monitoring of how policyholders drive into setting rates.

But Jain said, “I still think we need to do more in the technology area.”

Leading the way in technology at Geico now falls to its new CEO Nancy Pierce, who has moved up from chief operating officer. He has been with the insurance company since 1986, when he started as a claims associate.

However, the question of who will take over Combs’s duties as portfolio manager is still open.

Buffett has been saying that Abel will have full responsibility for the portfolio, but it is unclear how much of that responsibility will be handed over to another portfolio manager, Ted Weschler.

Berkshire may also appoint one or more additional portfolio managers and Buffett himself, as chairman, may help fill the gap left by Combs.

Traditionally, Berkshire has been opaque about who is responsible for the minority stakes in its portfolios and has not said much about the track records of portfolio managers.

in an email to buffet watch, Christopher Davis of Hudson Value Partners urged Berkshire to “be more transparent about the roles and responsibilities of Abel and Wexler in managing the public equity portfolio.

“We all like the ‘Berkshire way,’ but some concessions must be made to the fact that this is now a trillion-dollar enterprise going through its first leadership change.”

Many aspects of that change are taking the company away from the famously decentralized “Berkshire way.”

Greg Abel already has more management oversight over non-insurance operating companies than Buffett.

Now some of them are getting an additional layer of management.

NetJets Chairman and CEO Adam Johnson has been appointed to the newly created role of “President of Berkshire Hathaway’s consumer products, services and retail businesses.”

Calling him “an accomplished leader with a proven ability to deliver long-term shareholder value,” Abel said in a Monday news release that Johnson will “support the outstanding CEOs of our 32 consumer products, service and retail businesses and maintain Berkshire’s culture and values.”

The remaining non-insurance subsidiaries, including BNSF, Berkshire Hathaway Energy and Pilot, will still report directly to Abel.

Berkshire is also getting its first general counsel.

Michael O’Sullivan worked in that role at Snap Inc. since 2017 after practicing law at Munger, Tolles & Olson for more than two decades.

Until now, Berkshire has turned to outside law firms to handle its legal matters.

(I wouldn’t be surprised to see Berkshire add investor, media and government relations departments to its notoriously low-overhead Omaha headquarters sometime next year.

On the other hand, I don’t think Berkshire will see any dividends as long as Buffett remains in office.)

Finally, in a more traditional transition, Chief Financial Officer Mark Hamburg will retire next June after 40 years at Berkshire.

In the news release, Buffett said Hamburg has been “indispensable” and “has done more for this company than many of our shareholders will ever know.”

His successor will be Berkshire Hathaway Energy CFO Charles Chang.

This is a huge change for a company that hasn’t changed much in years.

Keefe, Bruyette & Woods analyst Meyer Shields said wall street journal, “There’s so much emotional investment in the solidity of Berkshire as a culture that when you have decent-sized changes, it causes more concern than joy over the dynamics of the company. That’s why people don’t own Berkshire Hathaway.”

KBW downgraded Berkshire’s shares to “underperform” earlier this year due to Buffett’s impending departure.

Both A and B shares weathered the storm well this week and fell about 1%, although they are still down more than 7% from their all-time high in May, just before Buffett revealed he would step down as CEO at the end of the year.

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audience member:What has been the best investment of your career?

warren buffett: Probably, in terms of what it’s already done and where it will go over time, probably the best investment was the first half of GEICO, which we bought for $40 million. Now in the second half it cost us Rs 2 billion. I’m glad I didn’t buy it for a third. (laughter)

But, you know, that 40 million – for half the company – will yield very good results.

But GEICO — some of our businesses have growth potential, some don’t. And we don’t need growth potential as part of the business.

If a business makes good money and we can use it to buy other businesses, one of the advantages of the Berkshire system is that we have a tax efficient and kind of frictionless way of taking the money to the best opportunities. And GEICO still has a lot of room for growth internally.

Charlie Munger: Okay, but GEICO, after all, cost $2 billion for the second half and –

warren buffett: Correct.

Charlie Munger:- A significant number of lakhs for the first half.

Now the search expense that brought us Ajit Jain was now an investment that really paid dividends.

I can’t think of any investment we have ever made that is better than this. (applause)

And I think that’s a good lesson in life. In other words, getting the right people into your system can often be more important than anything else.

BRK.A Stock Price: $748,887.00

BRK.B Stock Price: $499.52

BRK.BP/E (TTM): 15.97

Berkshire market capitalization: $1,077,426,505,703

Berkshire cash as of Sept. 30: $381.7 billion (up 10.9% from June 30)

Excluding rail cash and subtracting T-bills payable: $354.3 billion (up 4.3% from June 30)

No Berkshire stock repurchases after May 2024.

(All figures are as of the date of publication, unless otherwise indicated)

Berkshire’s top holdings in publicly traded stocks in the US and Japan are disclosed, ranked by market value, based on the latest closing prices.

Holdings are through September 30, 2025, as reported in Berkshire Hathaway’s 13F filing dated November 14, 2025, except:

A complete list of holdings and current market values ​​is available on CNBC.com’s Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about the newsletter to me at alex.crippen@cnbc.com. (Sorry, but we do not forward questions or comments to Buffett himself.)

If you haven’t already subscribed to this newsletter, you can sign up here.

Additionally, it is highly recommended to read Buffett’s annual letters to shareholders. These are collected here on Berkshire’s website.

-Alex Crippen, editor, Warren Buffett Watch