Sokol_affair

David L. Sokol

David L. Sokol

American business executive (born 1956)

"Sokol affair" redirects here. For the Social Text publishing hoax, see Sokal affair.

David L. Sokol (born September 1956) is an American business executive. He is a Chairman of Teton Capital LLC, headquartered in Wilson, Wyoming. He served as chairman, president, and CEO of NetJets,[1] as well as a chairman of MidAmerican Energy Holdings Company, of which Berkshire Hathaway holds a 100% and 89.8% stake respectively.[2]

Quick Facts Born, Education ...

Early life

The youngest of five children, David L. Sokol was born in 1956 in Omaha, Nebraska. At the time of his birth, his father managed a grocery store in Omaha and his parents had been married for 25 years. Sokol's eldest sibling is 23 years older than he. Sokol attended a Catholic grade school and public high school.[3]

When Sokol was 11, his mother was diagnosed with breast cancer. To help out with expenses, Sokol worked as a paperboy, a caddie, and a janitor at a hardware store. He also helped local farmers bale hay. In high school, he worked as a maintenance manager for an apartment complex. He also worked for a local grocery store, where he started as a bagger and later became the night manager.[4]

Sokol was able to keep this job when he entered the University of Nebraska, Omaha. Shortly before the end of his junior year in college, Sokol got married. He moved out of his parents' home and into a trailer with his bride, Peggy. By the time he graduated with a degree in civil engineering, he had a child on the way. Sokol graduated in 1978 and went to work as a structural engineer for the American company HDR, Inc.[5]

Education

He holds Bachelor of Science in Civil Engineering from the University of Nebraska, Omaha in 1978 and Honorary Doctorate from Bellevue University, Bellevue, Nebraska.[6]

Professional career

Previously, Sokol served as the Chief Executive Officer of MidAmerican Energy Holdings Company (formerly CalEnergy Company Inc.) a subsidiary of Berkshire Hathaway Inc. from April 19, 1993 to April 16, 2008. He served as the President of MidAmerican Energy Holdings from April 19, 1993 to January 21, 1995.

Formerly, among other positions held in the independent power industry, Sokol served as President and Chief Executive Officer of Kiewit Energy Company, which was a wholly owned subsidiary of Peter Kiewit Sons' Inc., and Ogden Projects Inc.

He served as Chief Executive Officer and Chairman of the Board of Managers of MidAmerican Funding LLC, a subsidiary of MidAmerican Energy Holdings, since its formation in March 1999.

Sokol serves as the Chairman of the Board of Ce Casecnan Water & Energy Co., Inc. He previously served as Chairman of Omaha Metropolitan Entertainment and Convention Authority and as a director of Omaha Airport Authority. He served as the Chairman of the Board of MidAmerican Energy Holdings Company since May 1994. He served as Chairman of HomeServices of America, Inc. (formerly HomeServices.Com Inc.) since inception in July 1999.

He served as Chairman of Northern Electric PLC. He has been a director of HomeServices of America, Inc. since July 1999. He had been Director of MidAmerican Energy Holdings since March 1991. He served as a director of MidAmerican Funding LLC, since formation in March 1999. He served as Non-executive Director of BYD Company Ltd. from August 4, 2009 to April 1, 2011.

He served as a director of Northern Electric PLC from January 1997 to June 1, 2007. Prior to this, he served as a director of CE Electric UK Funding Company until June 1, 2007.

Berkshire Hathaway

Prior to his abrupt resignation in March 2011, Sokol was widely regarded as the likely successor to Warren Buffett.[7] Often referred to as Buffett's Mr. Fix-It,[8] Sokol was tasked with rescuing underperforming Berkshire divisions Johns Manville and NetJets. Under Sokol's leadership Johns Manville was brought back on track and NetJets swung from a $157 million loss in 2009 to a $207 million gain in 2010.[9]

Sokol was also integral in the selection of acquisition targets at Berkshire. In 2008, Sokol flew to China to research car manufacturer BYD, which resulted in Berkshire acquiring a $230 million stake. This position was worth over $1.5 billion in 2010. Later in 2008, Sokol engineered the acquisition of Constellation Energy for $4.7 billion, sparing the company from bankruptcy.[8]

Lawsuits

In April 2010, a Douglas County judge[10] found that Sokol, who was the CEO of MidAmerican Energy Holdings Company, decided to change future profit calculations in such a way that it eliminated the stake in a 1990s Philippines project for San Lorenzo Ruiz Builders & Developers Group. The judge said that Sokol and MidAmerican had acted "willfully and intentionally".[10] The court levied a $32 million[8] ruling against MidAmerican. This ruling may be worth $140 million in future profits.

In a second case, courts in San Francisco and Omaha ruled against MidAmerican for a total of $52 million[10] in past profits, while also restoring ownership to La Prairie and San Lorenzo. These rights could amount to $280 million in future profits.

The third lawsuit for $150 million alleges that Sokol "secretly resumed negotiations"[10] that led to a lower projected profit.

Sokol purchased 96,060 shares of Lubrizol at a limit price of $104 per share between January 5 and 7, 2011. He presented the idea of Berkshire's acquiring Lubrizol to Buffett on January 14 or 15, 2011, and again after a January 25 meeting with Lubrizol's CEO. Berkshire Hathaway's board voted to acquire Lubrizol at $135 per share on March 13, 2011.[11]

On March 28, 2011, Sokol tendered his resignation from Berkshire Hathaway. In his press release detailing the resignation, Buffett detailed trading activity surrounding the Lubrizol acquisition, emphasizing that he did not believe anything unlawful transpired.[11] However at the Berkshire annual meeting that year Buffett said he did not have the full facts before the initial press release was released, adding that he found Sokol's actions "inexplicable" and "inexcusable".[12]

Other

In 2008, he authored and self-published Pleased But Not Satisfied, which described his business philosophy.[13][14]

Since departing Berkshire Hathaway, Sokol has been managing investments through Teton Capital, LLC, his family holding company.[14][15]

In 2010, Sokol introduced Supreme Court justice Clarence Thomas when the Horatio Alger Association presented Thomas the 1992 Horatio Alger Award.[16] He has had a close personal relationship with Thomas spanning more than a decade and regularly vacations with Thomas and his wife, Ginni.[16]

Family

Sokol and his wife, Peggy, have a daughter, Kelly. Their son, David "DJ" Sokol, died of cancer at age 18.[17]

References

  1. [1]
    "Cuts at NetJets delay expansion plans in Ohio". Springfield News-Sun. September 12, 2009. Archived from the original on May 6, 2011. Retrieved October 3, 2009. Associated Press from The Columbus Dispatch
  2. [2]
    "2010 SEC filing 10-K annual report" (PDF). 2011-02-25. Archived from the original (PDF) on 2011-04-09. Retrieved 2011-03-31.
  3. [3]
    Barrett, Paul M. (April 28, 2011). "Sokol Moves From Buffett's Heir Apparent to Rebuked Ex-Berkshire Executive". Bloomberg. Archived from the original on November 5, 2012.
  4. [4]
    "David L. Sokol". Retrieved 2023-03-04.
  5. [5]
    "David L. Sokol - Member Biography". Horatio Alger Association. Archived from the original on 20 March 2012. Retrieved 1 May 2011.
  6. [6]
    "David L. Sokol". Bloomberg Businessweek. Retrieved May 1, 2011.[dead link]
  7. [7]
    Pleven, Liam (March 31, 2011). "Buffett Successor List Gets Shorter". The Wall Street Journal. Archived from the original on August 6, 2016.
  8. [8]
    Dumaine, Brian (August 2, 2010). "Warren Buffett's Mr. Fix-It: Full Version". CNN. Archived from the original on August 4, 2010.
  9. [9]
    "2010 Annual Report" (PDF). Berkshire Hathaway. February 26, 2011. Archived (PDF) from the original on March 13, 2011.
  10. [10]
    Ruff, Joe (April 14, 2010). "Stakes high in MidAmerican suits". Omaha World-Herald. Archived from the original on April 17, 2010. Retrieved April 17, 2010.
  11. [11]
    "Warren E. Buffett, CEO of Berkshire Hathaway, Announces the Resignation of David L. Sokol" (PDF). Mar 30, 2011. Retrieved Mar 31, 2011.
  12. [12]
    "Warren Buffett admits 'I made a big mistake' over David Sokol's purchase of Lubrizol shares". the Guardian. 2011-04-30. Retrieved 2022-12-26.
  13. [13]
    Kim, Susanna (March 31, 2011). "Buffett Bombshell: Who Is David Sokol?". ABC News. Retrieved August 11, 2023.
  14. [14]
    "David Sokol on His Book [America in Perspective]". C-SPAN.org. August 22, 2022. Retrieved August 11, 2023.
  15. [15]
    "Energy is 'the blood of an economy' and can't be restricted without alternatives: Teton Capital CEO". Yahoo News. July 19, 2022. Retrieved August 11, 2023.
  16. [16]
    Abbie VanSickle; Steve Eder (July 9, 2023). "Where Clarence Thomas Entered an Elite Circle and Opened a Door to the Court". The New York Times. Retrieved July 9, 2023.
  17. [17]
    "Remembering DJ Sokol". metroMAGAZINE The Spirit of Omaha. ALH Publications. Apr 15, 2022. Retrieved August 29, 2022.

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