Berkshire's Abel sees 2015 pay surge 48 percent to $40.77 million

Mon Feb 29, 2016 11:01am EST
 
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By Jonathan Stempel

(Reuters) - The energy unit of Warren Buffett's Berkshire Hathaway Inc (BRKa.N: Quote) on Monday said Gregory Abel, its chairman and chief executive, saw his compensation jump 48 percent last year to $40.77 million, reflecting a large incentive award.

Berkshire Hathaway Energy Co said Abel, 53, whom many investors view as a potential successor to Buffett as Berkshire's chief executive, was awarded $28 million under a profit-sharing plan tied to the unit's earnings.

Abel also received a $1 million salary and an $11.5 million bonus. His pay package was disclosed in Berkshire Hathaway Energy's annual report. Abel's compensation in 2014 was $27.58 million, including a $12 million incentive award.

The 2015 package makes Abel one of the best paid among U.S. energy executives and Berkshire's 361,270 employees.

It could also be a factor in his staying with Berkshire.

In a letter to shareholders that fueled speculation about Abel's future, Berkshire Vice Chairman Charlie Munger called Abel a "world-leading" performer who, in some ways, was a better businessman than Buffett.

"If he's that talented, he could have a host of other, extremely lucrative opportunities outside the company," said Minor Myers, a Brooklyn Law School professor specializing in executive pay.

"One goal of executive compensation is to retain people who have attractive alternative opportunities," Myers said. "You want to keep the best people at the firm, and this may be Berkshire's way of doing it."   Continued...

 
Berkshire Hathaway Energy CEO Gregory Abel (R) is seated next to U.S. President Barack Obama (L), who was hosting a roundtable with CEOs to discuss efforts to tackle climate change both in the United States as well as on a global scale at the White House in Washington October 19, 2015. REUTERS/Kevin Lamarque