Berkshire Hathaway Vice Chairman Greg Abel, left, and Chairman and CEO Warren Buffett at the CHI Health Center, in Omaha, Neb., on May 2.Matthew Putney/The Associated Press
Billionaire Warren Buffett will remain chairman of the board at Berkshire Hathaway Inc. BRK-B-N when vice-chairman Greg Abel takes over for Mr. Buffett as chief executive at the start of 2026.
The board of directors at the cash-rich conglomerate voted Sunday to keep the legendary 94-year-old investor as head of the board, a decision likely to relieve investors worried about maintaining Berkshire’s remarkable winning streak as U.S. and global economies are beset by tariff shocks, financial turmoil and a growing risk of recession.
The board in the same meeting also approved Mr. Buffett’s chosen successor, Mr. Abel, a 62-year-old veteran Berkshire executive, as CEO. In a surprise announcement Saturday, Mr. Buffett said he would step down from that top spot at the end of the year.
Berkshire Class B shares fell more than 5 per cent on Monday after hitting an all-time high Friday.
Macrae Sykes, portfolio manager at Gabelli Funds, praised the company’s transparency after Mr. Buffett announced the succession and does not believe Mr. Buffett is going anywhere.
“I think it gives Warren a little more bandwidth instead of running this conglomerate,“ Mr. Sykes said in an interview with the Associated Press. ”It gives Greg more transparency on the opps with also Warren still being his mentor as chairman,”
In six decades at the helm, Mr. Buffett turned a Massachusetts textile company into a sprawling but nimble conglomerate that owns everything from Dairy Queen and See’s Candies to BNSF Railway and massive insurance companies. As the company grew, Mr. Buffett‘s reputation grew with it as shares of Berkshire Hathaway climbed steadily, exceeding major indexes by wide margins and returning an average 19.9 per cent each year to investors compared with 10.4 per cent for the Standard & Poor’s 500.
Warren Buffett said on May 3 he will step down as chief executive of Berkshire Hathaway at the end of the year, and hand over the reins to Vice Chairman Greg Abel.
Reuters
The decision to continue with the Oracle of Omaha, as Mr. Buffett is known, as head of the board differs from the succession plans laid out in the event of Mr. Buffett’s death. The billionaire has long said that Howard Buffett, the second-born of the investor’s three children, should become chairman when he is gone to protect Berkshire’s culture.
Mr. Abel will take over with big questions hovering over the company, amid trade wars launched by the U.S., but he has managed all of Berkshire’s non-insurance businesses since 2018. Mr. Buffett says President Donald Trump’s tariffs were a big mistake. There are also worries that Berkshire might not able to avoid the fate of most conglomerates–forced to break up to recapture focus.
Then there is Berkshire’s US$348-billion in cash.
Mr. Buffett says he doesn’t see many bargains to invest that money in now, not even Berkshire’s own stock, but he assured some of the estimated 40,000 attendees of the company’s annual meeting in Omaha, Neb., over the weekend that one day the company would be “bombarded with opportunities.”
Mr. Abel, a low-key Canadian with a love of hockey, has already shown he is a more hands-on manager than Mr. Buffett, asking managers tough questions and encouraging them to collaborate with other subsidiaries when it makes sense. He will now take on oversight of the insurance businesses and responsibility for investing the company’s cash. Vice-chairman Ajit Jain, 73, will stay on for now to help manage the insurance businesses that include Geico and massive reinsurers like General Re.
Mr. Abel said Saturday that he wouldn’t change the Berkshire’s approach to investing, which he learned from Mr. Buffett. Maintaining Berkshire’s fortress-like balance sheet will always be a priority, he said.
Eventually, Berkshire might have to consider paying a dividend, which Mr. Buffett always resisted because he believed he could deliver better returns by reinvesting the cash. For now, Mr. Buffett and Mr. Abel want to keep building cash, so they are prepared when opportunities arise.
Mr. Buffett endorsed Mr. Abel by saying he would keep all of his shares that give him control of 30 per cent of Berkshire Hathaway and praised Mr. Abel during the shareholder meeting.
“It’s way better with Greg than with me because I didn’t want to work as hard as he works and I can get away with it because we’ve got a basically good business – a very good business – and I wasn’t in danger of you firing me by virtue of the ownership and the fact that we could do pretty well,” Mr. Buffett said. “But the fact that you can do pretty well doesn’t mean you couldn’t do better, and Greg can do better at many things.”
The CEOs of Berkshire subsidiaries who report to Mr. Abel have praised his management style, which holds them accountable while allowing them autonomy. See’s Candy CEO Pat Egan worked with Mr. Abel at Berkshire’s utility unit for years before he took over six years ago and said Mr. Abel makes sure he’s considered every contingency.
“He’s allowed me to make a lot of decisions that he may or may not have agreed with, but he’ll support us at the end of the day, no matter what as long as we’re operating with integrity and principles and the long game,“ Mr. Egan said.
Mr. Buffett has always delegated the decisions about how to distribute his fortune, worth nearly US$170-billion today, to others by giving shares annually to the Gates Foundation and four family foundations run by his children.
The Gates Foundation has received the biggest donations worth more than US$40-billion since he started giving away his fortune in 2006.
He said last summer that his three children will decide how to distribute his remaining fortune after his death, but that the Gates Foundation won’t get any more donations at that point.
Mr. Howard, 70, has his own foundation through which he has donated billions to humanitarian and food-security causes, including helping coffee farms in El Salvador and war-torn Ukraine. Howard Buffett’s foundation expects to top US$1-billion in gifts to Ukraine – more than most countries – later this year.
Tributes to Mr. Buffett came tumbling in over the weekend praising his investment savvy and folksy management style.
“There’s never been someone like Warren, and countless people, myself included, have been inspired by his wisdom,” Apple CEO Tim Cook posted on X. “It’s been one of the great privileges of my life to know him.”
JP Morgan’s CEO Jamie Dimon said Mr. Buffett represented “everything that is good about American capitalism and America itself,” and praised his “integrity, optimism and common sense.”