During the month, Warren Buffett, the acclaimed chairman and CEO of Berkshire Hathaway, publicly declared his intention to retire from the post. He named Greg Abel as his successor at this year’s annual meeting of the company in Omaha. The decision, set to take effect at the end of the year, stunned some 2,600 shareholders. They have just as long envied Buffett for his six decades of successfully presiding over the investment conglomerate. At 94 years old, Buffett has already made a colossal splash with this announcement. This moment is crucial for him personally and the company that he has dominated since the 1960s.
In an unusual show of confidence, Buffett went on to praise Abel, the vice chairman of non-insurance operations. Although his term doesn’t end until 2025, he officially named Abel as his successor in 2021. At 62, Abel is younger than all of Berkshire’s current leadership, and he will be the first new face on Berkshire’s top management team since 1965.
Tomorrow we’re going into the yearly board meeting of Berkshire, and yet we only have 11 directors. As it happens, my kids—Howie and Susie—are two of our directors. They know exactly what I’m going to talk about. Buffett revealed in the meeting, “The balance of them will be hearing this news for the first time… It’s about time for Greg to become the chief executive officer of the company by the end of the year.”
Buffett’s decision to step down comes after he has devoted 60 years to building Berkshire Hathaway into one of the most successful companies in the world. To quell any concerns, he emphasized that he’d remain very involved with the company during and after the transition. He failed to outline the specific responsibilities of his new role.
The decision on his official title will be made at the next full board meeting, now set for Sunday. Buffett soothed shareholders last week when he pledged not to sell any of his shares in the company. He thinks this prerogative economic decision will result in improved operational performance for the company under Abel’s stewardship.
“I would add this, the decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg’s management than mine,” Buffett explained.
Buffett’s announcement marks the end of an era at Berkshire Hathaway—a conglomerate that has been wildly successful and known for decades by the name of its longtime leader. The one caveat is that very good shareholders love Buffett for his long achievement. Today they, like everyone else, are waiting to see how Abel will lead the company through what could be a severe economic downturn.
Berkshire Hathaway’s board consists of 11 directors, including Buffett’s children, Howie and Susie, who are expected to play important roles during this transition. Buffett’s family definitely adds the personal touch to this corporate move. Their stake ensures that the company’s principles will live on.
As the transition nears, investors and analysts are anxious to see how Greg Abel will put into practice his vision for Berkshire Hathaway. Abel clearly has an impressive record of stewardship across many divisions of the company. He is well-positioned to lead Berkshire into its next chapter.
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