Shock as Warren Buffett successor resigns from Berkshire Hathaway

A top executive of Berkshire Hathaway who was believed to be on the inside track to one day succeed billionaire Warren Buffett as CEO has resigned suddenly.

Buffett said Wednesday that David Sokol's resignation letter, delivered by his assistant late Monday, came as a "total surprise." But the resignation letter arrived less than two weeks after Buffett learned about stock trades that Sokol made before Berkshire announced its $9 billion acquisition of chemical company Lubrizol.

Buffett said Sokol, who had been serving as chairman of Berkshire's MidAmerican Energy, NetJets and Johns Manville units, indicated that he wants to spend more time on philanthropy.

"As I have mentioned to you in the past, 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 and hopefully an enterprise which will provide opportunity for my descendents and funding for my philanthropic interests," Sokol wrote.

Buffett said twice before, most recently about two years ago, Sokol had spoken to him of resigning for similar reasons but Buffett and other board members convinced him to stay with the company. He accepted Sokol's resignation this time.

"I'm just totally shocked," said Andy Kilpatrick, the stockbroker-author of "Of Permanent Value, the Story of Warren Buffett." "It looked until a few minutes ago as if he (Sokol) was the guy."

Buffett said he learned March 19 that Sokol bought and sold a couple thousand shares of Lubrizol in December and then purchased nearly 100,000 Lubrizol shares in early January about a week before recommending that Berkshire make a bid.

Buffett said the decision, announced March 14, to offer $135 in cash for each share of Lubrizol was entirely his, but that the deal wouldn't have happened without Sokol's early efforts.

Buffett said he doesn't believe those stock purchases were illegal because Sokol made them before he'd even suggested the Lubrizol deal, and said Sokol did mention in passing that he owned stock in the company when first bringing the deal up for discussion. Buffett also said that he didn't ask Sokol to resign and noted that Sokol told him that the stock purchases weren't a factor in his decision to leave the company.

"Dave's contributions have been extraordinary," Buffett said.