Meet the ultra-exclusive club of people fired by Warren Buffett

As the chairman on “The Apprentice,” Donald Trump got used to saying “you’re fired.”

Warren Buffett, who is joining the next season of “Celebrity Apprentice” as an adviser to the contestants, isn’t that blunt, at least in public. He is widely depicted as someone who picks executives he admires and then is pretty hands-off. Executives at units of Berkshire Hathaway Inc.
 tend to stick around for a long time.

“Warren Buffett’s business model is based on trust,” says Lori Ryan, professor of management and director of the Corporate Governance Institute at San Diego State University.

And when that trust is broken and the so-called Oracle of Omaha does oust a senior executive, he tends to skip over it in his letter to shareholders — as he has done in this year’s letter. There’s not a word about the NetJets boss who left — and barely a mention of the company that sells fractional stakes in corporate jets.

And while Buffett favors a folksy tone in the annual letter, he also passed up the opportunity to even allude to his pending role in a reality television show.

Here are five senior people who have been pushed out of a Berkshire unit:

David Sokol in 2010


David L. Sokol

This may be the highest-profile departure.

Sokol was once one of Buffett’s top lieutenants and considered a potential successor to Buffett. He ran MidAmerican Energy Holdings Co. and helped turn around NetJets, another Berkshire unit.

He abruptly resigned in March 2011 after it was revealed that he had bought about $10 million in shares of stock in Lubrizol Corp. before suggesting that Berkshire buy the chemical company (it did). While Buffett initially said he didn’t feel the trades were “in any way unlawful,” within weeks he called it “inexcusable” and said the trades violated Berkshire’s code of ethics. Berkshire’s audit committee delivered a scathing 18-page report. (Nonetheless, Sokol’s departure didn’t warrant a mention in Buffett’s annual letter to shareholders for that year.)

In 2013, the Securities and Exchange Commission closed the case and told Sokol’s lawyer that it wouldn’t take any action. In an email to The Wall Street Journal, Sokol said: “I will never understand why Mr. Buffett chose to hurt my family in such a way, but given that he is rapidly approaching his judgement [sic] day I will leave his verdict to a higher power.”

A email to Sokol’s lawyer in the case wasn’t returned.

Jordan Hansell in 2013.


Jordan Hansell

This is the 2015 departure that Buffett ignored in his latest letter to shareholders. Hansell is the NetJets boss who Buffett praised in a letter to shareholders about 2011 results when he said NetJets’ problems were behind it.

But the problems at the unit run deeper, despite those assurances from Buffett. The Wall Street Journal reported five months before Hansell’s departure that NetJets has never paid Berkshire a dividend, and its net worth is considerably less than the $725 million Berkshire paid for it in 1998. (The company wasn’t singled out by name in the letter to shareholders published in February 2014.)

Hansell stepped down amid a pay dispute with pilots. A new wage deal that gives pilots a big raise was agreed to late last year, after his departure.

Hansell, who had spent six years at the firm, is now executive chairman at QuickInsured LLC, an insurance startup.

Through a spokesman, Hansell declined to comment.

Richard Santulli in 2008.

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Richard Santulli

The story of another high-level departure is also centered on NetJets. Santulli founded the company but announced in August 2009 that he was leaving. (He was replaced by Sokol, the man who left Berkshire in 2011.) At the time, Buffett said he accepted “with reluctance” Santulli’s decision to step down to spend time with his family and “pursue other interests.”

But the company’s financial results had been “a failure” since Berkshire acquired it in 1998, as Buffett disclosed in his letter to shareholders published in February 2011. In the first 11 years of Berkshire ownership, the company reported an aggregate pretax loss of $157 million — and that was with the “free use” of Berkshire’s credit.

Buffett then went on to praise Sokol.

“Dave’s quick restructuring of management and the company’s rationalization of its purchasing and spending policies has ended the hemorrhaging of cash and turned what was Berkshire’s only major business problem into a solidly profitable operation,” he wrote in that letter.

Santulli went on to cofound Milestone Aviation Group, a helicopter leasing company. He is now chairman of the company, which was acquired by GE Capital Aviation Services in 2015.

Santulli didn’t return requests for comment.

Denis Abrams in 2010.

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Denis Abrams

Abrams was pushed out as CEO of Benjamin Moore, a paint company owned by Berskshire, in 2012 as he neared a distribution deal to sell the company’s paints on the shelves of Lowe’s Cos.
  That would have broken a promise Buffett had made to the company’s independent dealers soon after the acquisition in 2000, and so he acted.

Abrams is now CEO of Punctil, a company that says its punctuality app helps medical professionals fight no-shows and nonpayments.

Abrams didn’t return requests for comment.

Benjamin Moore

Robert Merritt

This former CFO of Outback Steakhouse lasted just 15 months as Abrams’ successor at Benjamin Moore. He was out in September 2013 with no explanation.

“It came down to stylistic differences,” Merritt later told Fortune. He said he tried to reform Moore quickly and “I created more turmoil than Berkshire wanted.”

He was replaced by Mike Searles, who remains Benjamin Moore’s CEO. Merritt late last year became CEO of Ignite Restaurant Group, which owns the Joe’s Crab Shack and Brick House Tavern and Tap chains.

Merritt declined to comment to MarketWatch.

Read:50 best things Warren Buffett told investors over past 50 years

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