Warren Buffett steps down as Berkshire Hathaway chairman in succession move

Warren Buffett has stepped down as Berkshire Hathaway chairman, with Howard Buffett taking over and Greg Abel remaining CEO. The move advances a long-planned succession while raising sharper investor focus on capital allocation and execution.

In Short

• Howard Buffett will guard Berkshire's culture while Greg Abel runs operations
• Investors are watching how Abel deploys Berkshire's USD 365 billion cash reserve
• Berkshire became the first non-tech company valued above USD 1 trillion

Warren Buffett is stepping down as chairman of Berkshire Hathaway, marking the next stage in the leadership transition at the USD 1 trillion conglomerate he has led for more than six decades. The 96-year-old will become chairman emeritus with immediate effect, while his son Howard Buffett will take over as chairman as part of a long-planned succession process, the company said on Friday.

Buffett will remain a director of Berkshire Hathaway. He has been the company’s chairman since 1970 and took control of the then-struggling New England textile company in 1965. Greg Abel, who became chief executive officer at the start of this year, will continue in that role as Berkshire moves ahead with the next step in its transition.

In a letter to shareholders, Buffett said, "I have served Berkshire since 1965. 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." Buffett had continued to come into the office each day after handing over the CEO role to Abel, looking for new investments and deals and offering advice. It is not clear if that routine will now change.

Howard Buffett, who has been on Berkshire Hathaway’s board since 1993, will now become chairman, while Abel continues as CEO. Buffett said he was confident about the arrangement. "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."

Investor Adam Mead, who wrote "The Complete Financial History of Berkshire Hathaway", said Buffett appeared to be trying to reduce the impact on Berkshire when he eventually dies by taking this step now. Berkshire’s announcement did not mention any health issues, but Mead said, "He’s now 96, so even a cold could be a health scare."

Abel has managed all of Berkshire’s non-insurance businesses since 2018, when he was elevated to vice chairman. That means he already knows the group’s major businesses, including BNSF railroad, the utilities and manufacturing operations, and brands such as Dairy Queen and See’s Candy. Even so, CFRA Research analyst Cathy Seifert said investors still had questions about how Abel would deploy Berkshire’s massive USD 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."

Michael Withers, professor of management at the University of Notre Dame’s Mendoza College of Business, said Buffett had taken a deliberate approach to Berkshire Hathaway’s succession plans and had 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 built his fortune through Berkshire Hathaway stock after turning the company into an investing conglomerate and a Wall Street icon by buying insurance companies and reinvesting premium income in stocks and other businesses. In 2024, Berkshire Hathaway became the first non-tech company valued at more than USD 1 trillion. Buffett, a longtime philanthropist, has given away roughly USD 66 billion worth of stock since 2006, with most of it going to his friend Bill Gates’ foundation. This summer, he said his three children would take over all charitable decisions and distribute the rest of his fortune by the end of 2035.

Buffett’s market moves have long drawn close attention, with Berkshire Hathaway’s public disclosures on stocks bought or sold often moving markets. During his time as CEO, Berkshire nearly doubled the returns of the S&P 500, with a compounded annual growth rate of 19.9 per cent against the index’s 10.4 per cent. Abel said in a prepared statement, "Warren’s impact on Berkshire and its owners is without parallel in the history of American business. 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 on Friday.

Buffett’s move to become chairman emeritus, with Howard Buffett taking over as chairman and Abel continuing as CEO, marks another planned step in Berkshire Hathaway’s succession process, while leaving in place the structure Buffett said would protect the company’s culture, values and long-term direction.

With PTI Inputs

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