Warren Buffett has formally stepped aside as chief executive of Berkshire Hathaway, ending more than sixty years at the helm of one of the world’s most influential investment groups. Day-to-day control now passes to Greg Abel, while Buffett, 94, remains as chairman and will continue to work from his Omaha office. The transition affects a conglomerate valued at over $1 trillion and followed closely by global investors, as The WP Times reports, citing international business media.
Buffett began buying Berkshire shares in 1962 when the company was a failing textile manufacturer. Over six decades he transformed it into a sprawling industrial and financial group whose holdings range from insurance and railways to energy, manufacturing and consumer brands, as well as major equity stakes in Apple, Coca-Cola and American Express. Berkshire’s Class A shares now trade above $750,000, and Buffett’s personal stake — despite having donated more than $60bn to charity — is still worth around $150bn.
Why the timing matters
Berkshire is entering a phase in which size itself has become a constraint. The group is sitting on $382bn of cash and short-term investments, yet it has become increasingly difficult to find acquisitions large enough to make a material difference to earnings. Even the recent $9.7bn purchase of OxyChem is widely regarded as too small to alter Berkshire’s overall growth profile.
Buffett’s age and the strategic challenge of capital deployment have therefore made an orderly transition unavoidable. Abel’s appointment has been planned for years and is designed to provide continuity rather than a change of direction.
Who Greg Abel is
Greg Abel, 62, has run all of Berkshire’s non-insurance businesses since 2018, overseeing operations that include utilities, manufacturing, rail transport and consumer services. He is regarded by investors as a more operationally engaged executive than Buffett, whose role in recent years focused primarily on capital allocation and long-term strategy.
His position as Buffett’s successor was confirmed publicly in 2021, when the late Charlie Munger told shareholders that Abel would preserve Berkshire’s distinctive culture of decentralisation and managerial autonomy.
What will change — and what will not
Berkshire’s structure is unlikely to be dismantled. Subsidiaries will continue to operate with a high degree of independence, provided they meet financial targets. However, Abel has already begun to impose a more conventional corporate framework at senior level.
In December he announced a series of changes: Todd Combs, chief executive of Geico, departed; Marc Hamburg, the long-serving chief financial officer, retired; and Adam Johnson, head of NetJets, was appointed to run Berkshire’s consumer, service and retail businesses. These moves effectively create a clearer management hierarchy within the group.
The pressure over cash
The largest question facing Abel will be how to use Berkshire’s cash reserves. Buffett has always rejected regular dividends, preferring to reinvest profits or buy back shares when he believed they were undervalued. But with $382bn on the balance sheet, institutional investors are increasingly likely to press for either dividends or a more systematic share buy-back programme.
For now, that pressure is limited by Buffett’s continued control of nearly 30 per cent of Berkshire’s voting rights, which will only diminish gradually after his death as his shares are transferred to charitable foundations.
A group with deep financial foundations
Despite slower growth, Berkshire remains financially resilient. Its insurance businesses generate more than $175bn in float, providing investable funds before claims are paid. Its regulated utilities offer stable returns, while its railway, manufacturing and consumer companies tend to perform strongly when the US economy is expanding.
Many investors argue that much of Berkshire’s portfolio now operates on a largely self-sustaining basis, giving Abel a solid platform from which to manage the group’s capital.
Buffett’s departure as chief executive marks the end of a defining era in global investing. But the transition to Abel has been engineered to avoid disruption. For the markets, the focus now shifts from the personality of the founder to the discipline with which one of the world’s largest corporate balance sheets will be managed in the years ahead.
Read about the life of Westminster and Pimlico district, London and the world. 24/7 news with fresh and useful updates on culture, business, technology and city life: British Gas bills rise in January as Ofgem lifts the price cap while April cuts promise relief
