EXCLUSIVE: Berkshire Hathaway launches new era of Pilot Company ownership with CEO change

The Haslam family is taking a side seat in determining Pilot Company’s leadership for the first time in its almost 65-year history.

Berkshire Hathaway, in its first major move since acquiring a controlling interest in the Knoxville-headquartered company, is replacing Pilot’s top executives with two of its own.

Adam Wright, an energy executive with more than 20 years of experience and deep ties to Berkshire, will replace Pilot CEO Shameek Konar, who will step down May 30. Longtime Berkshire executive Joe Lillo will become chief financial officer, replacing Kevin Wills.

In an exclusive interview with Knox News, board chairman Jimmy Haslam seemed comfortable with the shift and said he and founder and chairman emeritus James A. Haslam II will be more involved day-to-day to support Wright’s early tenure.

“Berkshire owns 80%,” Haslam said. “It’s their call.”

Pilot was ranked by Forbes as the fifth-largest private company in the country before being acquired by Berkshire Hathaway, Warren Buffett’s holding company.

The Haslam family retains 20% ownership of Pilot and two of seven board seats.

There are no plans to relocate the company, representatives from both parties told Knox News exclusively. Buffett has a hands-off reputation.

“He will leave the business alone,” said David Kass, clinical professor of finance at the Robert H. Smith School of Business at University of Maryland, who studies Berkshire.

The Haslam family has had years to prepare for this transition of power because of the terms of the deal, finalized in 2017.

Why Berkshire is replacing Pilot leadership

During Konar’s two years in the top job, Pilot launched a $1 billion redesign of travel centers and a partnership with General Motors to build a nationwide EV charging network.

The leadership changes aren’t a commentary on performance, Haslam said, nor are they an indication that Pilot headquarters will be relocated.

“We buy great companies who are run by great people and let them run their businesses locally,” Wright told Knox News. “But there are times where Berkshire has decided to bring in their leadership team, under certain circumstances. I think they see this as just an opportunity to do so.”

It’s an opportunity to bring Wright back to the fold after he left Berkshire Hathaway Energy in 2021 to become COO of Pacific Gas & Electric Company, one of the nation’s largest combined natural gas and electric providers. Wright will become Pilot’s fifth CEO.

Kass said it’s rare for Berkshire to bring in new management. But, when it bought a minority stake of Pilot back in 2017 with plans to own a majority in 2023, the deal hinted at a CEO shift.

It outlined that Jimmy Haslam would serve as CEO until Berkshire obtained the majority. However, in 2021, Haslam, now 69, passed the baton to Konar, who was brought on in 2017 to grow Pilot’s energy arm.

Pilot, with 29,000 employees, is one of the largest fuel suppliers and the largest operator of travel centers in North America across 670 Pilot-branded locations. It has the third-largest tanker fleet in North America and supplied 14 billion gallons of fuel in 2022.

According to Forbes, Pilot had $41.9 billion in revenue in 2022, up from $26.6 billion in 2021.

About Berkshire Hathaway’s acquisition of Pilot

It was announced in October 2017 that Berkshire Hathaway in a reported $2.8 billion deal would acquire 38.6% of Pilot, while the Haslam family would keep 50.1% and minority stakeholder FJ Management Inc., owned by the Maggelet family, would retain 11.3%.

This year, Berkshire acquired 41.4% for approximately $8.2 billion (dependent on Pilot’s audited 2022 earnings), according to the company’s annual report. It bought all of FJ Management’s shares and some of the Haslam family’s shares to become majority stakeholder.

Berkshire recognizes Pilot as a strong, stable and growing business, Berkshire Hathaway executive over non-insurance businesses Greg Abel said in a press release April 10.

Buffett wrote in his annual shareholder’s letter at the end of 2017 that Pilot was Berkshire’s “sensible” acquisition that year.

What this means for the Haslam family and Pilot

Haslam said, unequivocally, that Berkshire has no intention to move the company out of Knoxville.

“We’ll continue to be a leader in the community and give back to the community,” Haslam said.

Buffett, in a 2017 press release, said Berkshire had “never made a move of the home office of any company we've bought. We don't buy companies to change them."

Haslam said his family plans to retain 20% ownership.

Kass, the professor who studies Berkshire, said it’s likely the holding company’s preference “to own 100% rather than share ownership. (But) they will leave it to the discretion of the family.”

Berkshire outright bought Maryville-based Clayton Homes for $1.7 billion in 2003, and the company maintains its corporate headquarters there.

As for change within the company, Kass called Buffett “the preferred owner” for anyone looking to sell their business but maintain culture, stabilize employment and keep the company intact.

“I would expect there to be minimal change in the culture and the atmosphere, the working conditions, compensation,” Kass said. “Whatever attributes are important to the business and the employees, I would expect to pretty much stay the same.”

As for Berkshire’s future, Kass said Abel, the heir apparent to Buffett, 92, would maintain the legendary investor’s methods.

Whitney Haslam Johnson, formerly chief experience officer of Pilot, remains involved in the company but moved to a strategic adviser role in January.

Pilot’s new CEO Adam Wright

Wright, who started work April 10 along with Lillo, will continue the company’s initiatives launched while Konar was CEO:

• A $1 billion renovation of 400 Pilot Flying J truck stops to make the customer experience more consistent across the country. That ongoing project includes upgrading bathrooms, launching new food and installing technology. Haslam said supply-chain issues mean it will take longer than the original three-year timeline.

• A partnership with General Motors to build a “coast-to-coast” EV charging network at Pilot Flying J travel centers.

Before he left for Pacific Gas, Wright was a rising star in Berkshire Hathaway Energy, following in Abel’s footsteps.

“Energy is very high up on Buffett and Berkshire’s priority list,” Kass said.

Wright, whose shares his hometown of Omaha with Berkshire Hathaway, was president and CEO of its gas and electric utility subsidiary MidAmerican Energy Company, overseeing expansion of the company’s wind generation before taking over gas delivery operations and then taking the CEO job after Abel was promoted out of it.

Wright holds a bachelor’s degree in civil engineering from the University of Nebraska at Omaha, where he played football.

“I bring the eye of an engineer and the heart of a shepherd to strengthen and build America’s critical infrastructure,” his LinkedIn profile says.

Incoming CFO Lillo has worked for Berkshire Hathaway’s energy division for more than 25 years.

Wright described himself as a collaborator, facilitator and maximizer.

“I love doing things shoulder-to-shoulder, rolling my sleeves up. Being there with the team. I like co-ownership,” he said.

Wright acknowledged the challenge of coming in from the outside to run a subsidiary so entwined with its founding family.

“While it's a challenge, there's a lot of possibility by just leveraging all the relational capital they have,” Wright said of the Haslams. “They’re big names here. They’ll help me get acclimated to Tennessee and Knoxville.”

“It’s going to take a while to learn the business, but learn the people first, lead the people and everything else will fall in line,” Haslam said he advised Wright. “And I don't think he actually needed that coaching from us, because I think it's his natural style.”

Wright’s wife, Sabrina, and children, Kennedy, 21, and Adam, 18, will move here this summer from California.

James A. Haslam II opened the first Pilot gas station in 1958. Today, Knoxville is home to the company’s sales and support center and company headquarters.

This article originally appeared on Knoxville News Sentinel: New Pilot Flying J CEO named by Warren Buffett's Berkshire Hathaway