Warren Buffett to Step Down and Greg Abel Will Be the New Berkshire Hathaway CEO

At the annual Berkshire Hathaway $BRK.B ( ▲ 1.81% ) shareholder meeting in Omaha today, Warren Buffett shocked attendees by announcing his retirement as CEO effective at the end of 2025, closing a remarkable 60-year chapter in American business history^1,^7.

The 94-year-old investing legend will hand the reins to Greg Abel, who has served as Vice Chairman of non-insurance operations and has been the designated successor since 2021^3,^13.

The surprise announcement came at the conclusion of the company's five-hour question-and-answer session, leaving the packed arena momentarily stunned before erupting into standing ovations^16.

Buffett revealed that only his children, Susan and Howard, who serve on Berkshire's board, knew about his decision beforehand – even Abel himself was caught off guard^1.

"I think the time has arrived where Greg should become the Chief Executive Officer of the company at year end," Buffett told shareholders, adding that while he would "still hang around and be useful in a few cases," final decisions would rest with Abel^7,^11.

The End of a Legendary Run

Buffett's departure marks the conclusion of perhaps the most successful CEO tenure in modern business history.

Since taking control of Berkshire in 1965 when it was a struggling textile manufacturer, he has transformed it into a trillion-dollar conglomerate spanning insurance, energy, railroads, and consumer goods^3.

BUFFETT'S LEGACY BY THE NUMBERS
- 60 years as Berkshire CEO
- 5,502,284% total return to investors
- $10,000 in 1965 → $500+ million today
- $169 billion personal net worth
- Berkshire stock growth: 19.9% annually vs. S&P 500's 10.4%

Under Buffett's leadership, Berkshire shares have appreciated at nearly double the rate of the broader market, with an annual growth rate of 19.9% compared to the S&P 500's 10.4%^11.

This extraordinary performance has cemented Buffett's reputation as one of history's greatest investors and business leaders^3.

The timing of Buffett's announcement comes as Berkshire stock has soared 19% year-to-date, significantly outperforming the S&P 500's 3.3% decline amid market volatility related to President Trump's tariff policies^14,^9.

This strong performance gives Abel a solid foundation as he prepares to take the helm.

Greg Abel: The New Steward of Berkshire

Abel, 62, brings a different skillset to the CEO role compared to his predecessor, with a background more focused on operations than stock-picking^4,^13.

Born in Edmonton, Alberta, Canada, he studied accounting at the University of Alberta before joining PricewaterhouseCoopers and later moving to CalEnergy in 1992^4.

His rise through Berkshire began when CalEnergy acquired MidAmerican Energy (later renamed Berkshire Hathaway Energy), where he eventually became CEO in 2008.

Since 2018, Abel has served as Vice Chairman for non-insurance operations, overseeing many of Berkshire's subsidiary businesses^13.

Industry analysts have noted that Abel has already been taking on more capital allocation responsibilities, traditionally Buffett's domain, suggesting a gradual transition has been underway behind the scenes^18.

In 2022, Abel demonstrated his commitment to Berkshire by purchasing 168 Class A shares worth approximately $68 million^13.

Challenges and Opportunities Ahead

Abel faces significant challenges as he prepares to take over.

Berkshire reported disappointing first-quarter results today, with operating earnings dropping 14% to $9.64 billion, below analyst expectations^14.

The company cited potential impacts from President Trump's tariffs and broader economic uncertainty as reasons for caution^14,^9.

Perhaps most daunting is the task of deploying Berkshire's massive cash reserves, which reached a record $347.7 billion in the first quarter, up from $334.2 billion at the end of 2024^14,^18.

For nine consecutive quarters, Berkshire has been a net seller of stocks, raising questions about the company's investment strategy in a high-valuation market.

BERKSHIRE'S Q1 2025 PERFORMANCE
- Operating earnings: $9.64 billion (-14% YoY)
- Cash reserves: $347.7 billion (new record high)
- Net seller of stocks for 9 consecutive quarters
- Insurance underwriting profits: -48.6%
- Foreign exchange losses: ~$713 million

Another challenge will be navigating the impact of tariffs on Berkshire's diverse business portfolio.

The company noted in its earnings report that it "cannot currently foresee the potential effects of tariffs" on its operations^14.

Abel's operational expertise may prove valuable in this environment.

His background in energy and utilities gives him deep experience managing capital-intensive businesses during economic fluctuations.

However, investors will closely watch his investing approach, an area where Buffett's genius has been most apparent.

The Transition Process

Berkshire's board of directors will meet on Sunday, May 4, to begin formal discussions about the leadership transition^11.

While Abel has been the designated successor since 2021, the official handover requires board approval^3.

Buffett has emphasized that he plans to remain involved with Berkshire in some capacity and has "zero intention" of selling any of his shares^1.

This commitment signals confidence in Abel's leadership while providing continuity during the transition.

The shift in leadership style from Buffett to Abel may bring changes to Berkshire's approach.

While Buffett is known primarily as a capital allocator with a gift for value investing, Abel brings strengths in operational management and organizational efficiency.

Market Reaction and Investor Sentiment

The announcement, while surprising in its timing, wasn't entirely unexpected given Buffett's age and Abel's previous designation as successor.

Initial market reaction showed a 2.3% increase in Berkshire's stock price during after-hours trading, suggesting investor confidence in the transition plan^10.

Many long-term Berkshire shareholders expressed mixed emotions at the meeting - gratitude for Buffett's extraordinary leadership combined with cautious optimism about the company's future under Abel.

The two standing ovations Buffett received reflected the deep appreciation investors feel for his stewardship^16.

Industry analysts note that Abel's success will depend on balancing innovation with preserving Berkshire's core strengths and culture.

The company's decentralized structure, with over 60 operating businesses functioning largely autonomously, may help smooth the transition as day-to-day operations continue without disruption.

Looking Ahead: Berkshire's Next Chapter

The leadership change at Berkshire comes at a pivotal moment for both the company and the broader market.

With record cash reserves and a portfolio spanning critical sectors of the American economy, Berkshire's investment decisions under Abel will have far-reaching implications.

Abel has indicated his commitment to Berkshire's core principles while bringing his own perspective to capital allocation.

His experience with renewable energy investments at Berkshire Hathaway Energy suggests he may emphasize sustainable growth strategies^17.

For investors, Buffett's retirement marks the end of an era but not necessarily a reason to lose confidence in Berkshire.

The company's strong balance sheet, diverse business holdings, and established succession plan provide a foundation for continued success.

As Buffett himself stated at the meeting today, "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"^7.

Coming from perhaps the greatest investor of all time, that's a powerful endorsement indeed.

Warren Buffett's extraordinary six-decade journey as Berkshire's CEO transformed a failing textile mill into one of the world's most valuable companies.

As Greg Abel prepares to write the next chapter, he inherits not just a business empire but a legacy of integrity, long-term thinking, and shareholder value creation that has few parallels in American business history.