FILE - Warren Buffett, chairman and CEO of Berkshire Hathaway, speaks during a game of bridge following the annual Berkshire Hathaway shareholders meeting May 5, 2019, in Omaha, Neb.
Nati Harnik / AP
Warren Buffett is stepping down as chairman of Berkshire Hathaway in the next step of the transition at the top of the $1 trillion conglomerate he led for more than six decades.
Buffett, 96, will become chairman emeritus and will take on his new role immediately, the company said Friday. His son, Howard, will become Berkshire Hathaway’s new chairman, part of a long-planned succession. Howard Buffett has been on the Berkshire Hathaway board since 1993.
Warren Buffett, known by a legion of financial market followers as the Oracle of Omaha, will remain a director. He had been Berkshire Hathaway’s chairman since 1970, but he took control of the struggling New England textile company in 1965.
Greg Abel took over for Buffett as the CEO of the $1 trillion conglomerate at the start of this year though Buffett continued to come into the office each day to look for new investments and deals and offer Abel any advice. It’s not clear whether Buffett will change his routine at all now.
“I have served Berkshire since 1965,” Buffett said in a letter to shareholders. “Sixty-plus years in, I still have the best job in the world. That is not something many people my age can say, and I have never felt better about what comes next.”
Investor Adam Mead, who wrote “The Complete Financial History of Berkshire Hathaway,” said Buffett seems to trying to lessen the impact on Berkshire when he eventually dies by taking this step now. Berkshire’s announcement didn’t reveal any health issues for Buffett, but Mead said “He’s now 96, so even a cold could be a health scare.”
Greg Abel will continue as CEO with Howard Buffett becoming chairman
Buffett said that he is confident with Abel and his son Howard leading Berkshire Hathaway.
“Greg runs the company; Howard will guard its culture and values – both worth more than anything on our balance sheet,” he said. “Think of Howard as a policy the shareholders own and hope never to claim against.”
Abel started managing all of Berkshire’s non-insurance businesses in 2018 when he was elevated to vice chairman, so he knows the various companies well including BNSF railroad, the utilities and manufacturing operations as well as name brands like Dairy Queen and See’s Candy. But CFRA Research analyst Cathy Seifert said investors still have questions about how well Abel will be able to deploy Berkshire’s massive $365 billion cash pile.
“There was a premium awarded Berkshire stock because of their financial strengths and because of this famed investor who was allocating capital. I think it’s naive to assume that this is business as usual. It’s not,” Seifert said. “What this does is amplify some of the execution risk in the strategy and the significance of the transition.”
The next orderly step in Warren Buffett’s succession plan
Michael Withers, professor of management at the University of Notre Dame’s Mendoza College of Business, said Buffett took a deliberate approach to Berkshire Hathaway’s succession plans and has carried out the transition step by step.
“Buffett seems to have understood that succeeding him wasn’t just about finding another extraordinary leader,” he said. “It was about building a structure that could preserve what makes Berkshire different long after he has stepped away. The test moving forward will be whether Abel and Howard can honor that legacy while still giving Berkshire room to adapt to a market that looks very different from the one Buffett mastered.”
Buffett’s fortune has been amassed through Berkshire Hathaway stock. Buffett built the company into an investing conglomerate and an icon of Wall Street by buying insurance companies and reinvesting the money from premiums in stocks and other companies. In 2024, Berkshire Hathaway became the first non-tech companies valued at more than $1 trillion.
Buffett, a longtime philanthropist, has given away roughly $66 billion worth of stock since 2006 with the bulk of that going to his friend Bill Gates’ foundation. But this summer he announced that his three children will now take over all of the charitable decisions and distribute the rest of his fortune by the end of 2035.
Buffett’s take on finance has created its own gravitational pull. When Berkshire Hathaway reveals the stocks that the company has acquired or sold in public disclosures, it can shake markets.
During his time as CEO of Berkshire Hathaway, the company nearly doubled the returns of the S&P 500, with a 19.9% compounded annual growth rate compared with the index’s 10.4% gain.
“Warren’s impact on Berkshire and its owners is without parallel in the history of American business,” Abel said in a prepared statement. “The culture Warren built and the values he championed will remain at the heart of Berkshire, and Howard will be their guardian.”
Shares of Berkshire Hathaway dipped slightly after the market opened Friday.
