OMAHA, Neb. — Warren Buffett, the highly regarded investor and long-time leader of Berkshire Hathaway, surprised a gathering of shareholders on Saturday with a significant announcement: he plans to retire at the end of the year. In a moment that caught many off guard, the 94-year-old CEO declared he would recommend Greg Abel, the company’s Vice Chairman, as his successor.
Buffett stated, “I think the time has arrived where Greg should become the chief executive officer of the company at year end.” Abel has been heralded as Buffett’s chosen successor for years, overseeing all of Berkshire’s non-insurance operations. While it was generally assumed he would step into the role only after Buffett’s passing, the announcement shifts those expectations considerably.
This development came at the conclusion of a five-hour question-and-answer session, where Buffett offered no insight into his decision but revealed that only his children, Howard and Susie Buffett, were aware of it beforehand. Abel, who sat beside Buffett during the announcement, appeared unprepared yet expressed his gratitude when he returned to lead the company’s formal meeting shortly thereafter. “I couldn’t be more humbled and honored to be part of Berkshire as we go forward,” he remarked.
Investor confidence in Abel is palpable, though observers are left to wonder how he will handle the investment strategy that has long defined Berkshire’s success. Buffett reaffirmed his trust in Abel, declaring he would maintain all his shares in the company, indicating confidence in its future under the new leadership. “I have no intention — zero — of selling one share of Berkshire Hathaway. I will give it away eventually,” he affirmed.
The transition has raised questions among analysts and investors alike. Cathy Seifert, a CFRA research analyst, noted that while stepping down might have been challenging for Buffett, it’s better to make that choice on his own terms. “There will be an effort at maintaining a ‘business as usual’ environment at Berkshire,” she said, though how this plays out remains uncertain.
Abel has handled many significant aspects of the company for years, but he has now assumed the additional responsibilities of managing Berkshire’s massive cash reserves and overseeing its insurance operations, with Vice Chairman Ajit Jain remaining to assist. Some observers, like investment manager Omar Malik, are optimistic about Abel’s ability to transition into this pivotal role. “He’s had such a long time alongside Warren and knows the businesses well,” he said, although he noted that Abel might not match Buffett’s prowess in capital allocation.
Meanwhile, some shareholders expressed concern over the historic transition. Cole Smead from Smead Capital Management remarked on Buffett’s gradual cognitive decline, expressing how witnessing the shift made him believe Buffett was ready to move on. “The challenge Abel is going to have is whether anyone will give him the same leeway as Buffett had.”
Buffett is not just stepping down from the CEO role; he also highlighted pressing global issues, such as the dangers of President Donald Trump’s trade policies, which he believes could destabilize the global landscape. “Trade should not be a weapon,” he cautioned, while emphasizing the importance of a prosperous global economy.
Despite market volatility, Buffett remains cautious in investments, indicating that Berkshire is sitting on a staggering $347.7 billion in cash. He suggested that the company is poised for future opportunities when the market favors buyers. “We will be glad we have the cash for,” he remarked, emphasizing his belief in the company’s potential.
The vibrant annual meeting drew nearly 40,000 attendees, a testament to Buffett’s enduring popularity and the loyalty of Berkshire shareholders. Among them was former presidential candidate Hillary Clinton, who attracted attention as a notable attendee. Investors continue to demonstrate their faith in the company’s direction, with many stating they have no plans to sell their shares, cementing Berkshire Hathaway’s status as a cornerstone of their investment strategy.
As the company prepares for this significant leadership change, all eyes will be on Greg Abel as he steps into a role that will determine Berkshire Hathaway’s trajectory in the years to come.