Warren Buffett is one step closer to naming his successor—here's a key trait he'll be looking for

Warren Buffett
David A. Grogan | CNBC

On Wednesday, Warren Buffett appointed Gregory Abel and Ajit Jain to the Berkshire Hathaway board as vice chairs, hinting that one of them is the most likely candidate to eventually take over.

Buffett told CNBC that this is "part of a movement to succession over time," although both the billionaire and his partner Charlie Munger will continue in their respective roles and be in charge of significant investment decisions for the company.

This isn't the first time that the 87-year-old has dropped hints about the future of his company. At the Berkshire Hathaway 2017 Annual Shareholders Meeting Buffett shared one key qualification he's looking for in Berkshire's next CEO: The new boss shouldn't be in it for the money.

CEO shares the best business advice Warren Buffett ever gave him
CEO shares the best business advice Warren Buffett ever gave him

"I actually would hope that we have somebody that's ... already very rich — which they should be if they've been working a long time — and really is not motivated by whether they have 10 times as much money than they and their families can need or a 100 times as much," he said.

Ideally, Buffett said, his successor "might even wish to perhaps set an example by engaging for something far lower than actually what you could say their true market value is."

Although he said he couldn't blame a CEO for wanting to be paid market value, if the new boss chose to go that route, the company would likely "pay them a very modest amount and then have an option, which increased in striking price annually."

As Buffett went on to explain, this strategy would keep the CEO's compensation in line with how the company is doing and reflect the same surges the shareholders feel.

Warren Buffett (L) and Berkshire-Hathaway partner Charlie Munger
Eric Francis | Getty Images

Buffett, along with longtime business partner Charlie Munger, also discussed compensation consultants, who advise corporate boards on how to best pay employees. Neither Buffett nor Munger is a fan.

"I have avoided all my life compensation consultants. I hardly can find the words to express my contempt," Munger said.

Buffett agreed. "If the board hires a compensation consultant after I go, I will come back — mad," he said.

It seems clear that Buffett and Munger want their future CEO to be motivated by passion, the work and the good of the company — not a paycheck.

This is an updated version of a previously published article.

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