Berkshire Hathaway Inc. said late Wednesday that David Sokol resigned after it came to light that he bought millions of dollars in Lubrizol Corp. shares shortly before urging Chairman Warren Buffett to buy the company.
Sokol was considered a possible successor to Berkshire Chairman Warren Buffett. Sokol is chairman of several Berkshire Hathaway subsidiaries.
Buffett said that he was surprised by Sokol’s decision and stressed in a statement that he and Sokol don’t consider the Lubrizol trades “unlawful.” Buffett said that Sokol told him that the trades were not a factor in his decision to resign.
“It is my goal to utilize the time remaining in my career to invest my family’s resources in such a way as to create enduring equity value,” Sokol wrote in his letter of resignation, according to the statement.
Sokol had talked about resigning twice before, most recently about two years ago, according to the statement.
Here is a letter by Warren Buffett on the matter.
The media focus will be on the insider transaction but that seems to have nothing to do with the resignation. It looks like David Sokol was thinking about this for a while. This is definitely a blow for Berkshire Hathaway, although the CEO position isn't as critical as the CIO role.
I didn't know Sokol wanted out and indicated he wanted to leave two years ago. A lot of Berkshire Hathaway shareholders and followers probably didn't know that either. David Sokol tackled a very hard problem at NetJets and I wonder if that drained everything from him. Tags: Berkshire Hathaway (BRK.A)