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Warren Buffett 'Reluctantly' Accepts Decision By NetJets Creator To Step Down

Tuesday, 4 Aug 2009 | 5:44 PM ET
NetJets Creator Richard Santulli
AP
NetJets Creator Richard Santulli

The man who created the company that pioneered time-shares for corporate jets in 1986 is stepping down as chief of the Berkshire Hathaway subsidiary.

NetJets Chairman and CEO Richard Santulli says in a news release late today that he's leaving immediately to "spend more time with my young family and pursue other interests."

NetJets says its "fractional aircraft ownership allows individuals and companies to buy a share of a private business jet" for much less than what it would cost to own and maintain a full-time jet.

Warren Buffett bought the company in 1998 for Berkshire after "being a satisfied customer" for three years.

Buffett says in the release, "It is with reluctance that I accept Richard’s decision to step down. Richard Santulli is synonymous with the fractional jet ownership industry and his vision and energy has made NetJets the leader that it is today. All of Richard’s friends at Berkshire Hathaway wish Richard well in this transition."

Santulli says he told Buffett of his decision to leave this morning. He will, however, remain as a consultant to NetJets for "at least" the next 12 months.

Buffett has named Mid-American Energy Chairman David Sokol as Chairman and interim CEO of NetJets to "allow for a smooth transition."

While Sokol and insurance chief Ajit Jain are generally believed to be at the top of the list of potential Buffett successors as Berkshire's CEO, Santulli's name has also been mentioned. Last year, Barron's called Sokol "the most likely candidate" and noted that Santulli's age (early 60s) probably "worked against" him.

In his 2006 letter to shareholders, Buffett reveals that three CEO candidates had been identified and that "each of the three is much younger than I." Buffett will be 79 later this month.

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