Warren Buffet intends for the chief investment officers who succeeds him at Berkshire Hathaway to continue his firm’s success. He’s going to pay them a low salary but give them generous incentives to beat the S&P 500, probably on a five-year basis, Reuters reports.

Of the 600 to 700 applications he has received, Buffet plans to select up to four CIOs, entrusting each between $2 billion and $3 billion to invest. He said he’s looking for someone who can handle unforeseen events and is versed not only in equities but also bonds and currencies.

Meanwhile, as to his role as chief executive officer, Buffet said he has three internal candidates, one who could serve immediately if he were to leave the firm.

The incentive arrangement is one Buffet has used before, most notably for Lou Simpson, who runs the firm’s Geico business. In fact, Buffet told shareholders in his annual letter that if Simpson weren’t only six years younger than him, he’d get the Berkshire Hathaway CIO job.

Likening his business to the New York Yankee’s third baseman Alex Rodriguez, Buffet said: “When A-Rod goes to bat, he is in control of his batting average. If he does a good job and the rest of the team falls on its face, we’ll pay him. If he falls on his face and the rest of the team wins the World Series, we’re not going to pay him.”

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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