Warren Buffett will stay on as chairman of Berkshire Hathaway after Vice Chairman Greg Abel takes over as chief executive officer, the conglomerate said Monday.
Berkshire made the announcement two days after the 94-year-old Buffett revealed at the company's annual meeting in Omaha, Nebraska that he would step down as CEO, ending six decades at the helm for the legendary investor.
Shares of Berkshire closed down about 5 percent, lowering the company's market value by $59 billion to $1.11 trillion.
Though Abel's expected ascension had been known for four years, Buffett's announcement was a surprise.
The change overshadowed Berkshire's first-quarter results, where insurance losses tied to wildfires caused operating profit to fall short of analyst forecasts.
"Buffett's retirement announcement was a shocker," Morningstar analyst Greggory Warren wrote.
Warren Buffett took control of Berkshire, once a floundering textile mill, on May 10, 1965, after a dispute with prior management.
He transformed Berkshire into one of the world's largest and most admired companies, with 189 businesses including Geico insurance, the BNSF railroad, Dairy Queen and See's Candies, and a huge stock portfolio including Apple.
Berkshire's stock price has reflected Buffett's success, posting annualized returns that nearly doubled the Standard & Poor's 500 index.
Berkshire's board of directors approved Abel's promotion, which will take effect on Jan. 1, 2026, at a meeting Sunday.
Abel and most of the board had not known of Buffett's announcement in advance. Buffett said he had given a heads up to his children Howard and Susie, who are directors.
It had been unclear before Monday whether Warren Buffett would remain chairman or hand that title to Howard Buffett.
"His sticking around provides reassurance to shareholders," said Kyle Sanders, an analyst at Edward Jones & Co. "Abel will be making large and important decisions, but having Warren around is a nice resource and he can serve as a mentor."
Staying around means Buffett could play a role if Berkshire made another major acquisition, which has eluded him for nearly a decade. Berkshire ended March with $347.7 billion of cash.
"It would give shareholders confidence that yes, we're still Berkshire and we'll still do large deals," Sanders said. "It gives shareholders confidence the company is not going to change even as the leadership does."
Buffett's investing success, annual letters to Berkshire shareholders, common sense and modesty made him a household name and American icon, earning him the title "Oracle of Omaha."
His admirers include billionaire Bill Ackman, who has said he wants to turn the Howard Hughes real estate company in which he invests into a "modern-day Berkshire Hathaway."
Berkshire's annual meetings have drawn an estimated 40,000 people to Omaha, including thousands from China and other countries, to see Buffett and former Vice Chairman Charlie Munger, go shopping and meet like-minded investors.
Munger died in 2023.
Howard Buffett, 70, is expected to eventually become non-executive chairman, primarily to preserve Berkshire's culture.
Abel, 62, who was raised in Edmonton, Alberta, and has a love for hockey, had waited four years since Berkshire publicly revealed he was Buffett's designated successor.
Berkshire's non-insurance businesses have reported to him since he became a vice chairman in 2018, and in the last year he took over some of Buffett's capital allocation responsibilities.
Insurance units such as Geico, General Re and National Indemnity will continue to report to Vice Chairman Ajit Jain.
Morningstar's Warren said Abel will have a "challenging time" as CEO focusing on both day-to-day operations and capital allocation, though he was the right pick for the job.
Buffett assured at the meeting that he would not sell any of his Berkshire stock, which comprises most of his fortune.
Nearly all of it will be donated by his three children, including his youngest son Peter, after his death, and they must decide unanimously on each commitment.
“I have no intention, zero, of selling one share of Berkshire Hathaway," Buffett said, prompting a two-minute standing ovation.
"The decision to keep every share is an economic decision," he added, "because I think the prospects of Berkshire will be better under Greg’s management than mine." (Reuters)
