Warren Buffett Steps Down, Handing Berkshire Hathaway Reins to His Successor Greg Abel
Berkshire Hathaway's CEO position is being vacated by Warren Buffett.
Get ready for a major shakeup at Berkshire Hathaway! Legendary investor Warren Buffett has announced his plans to step down from his leadership role, with Greg Abel stepping into the position.
At the age of 94, Buffett shared the news at Berkshire Hathaway's annual meeting, stating that Abel will take over officially at the end of the year. Although he will be stepping back, Buffett will continue to serve as a consultant to the company. However, Abel will be the one making the critical decisions moving forward.
"I believe the time has come for Greg to assume the leadership of the company at the end of the year," Buffett declared. The announcement seems to have taken Abel by surprise, as he was not previously aware of the plans. Buffett also confirmed that he will retain his shares in Berkshire Hathaway.
In the past, Buffett has been vocal about his criticisms of US President Donald Trump's trade policy. Despite this, Buffett encourages investors not to let politics discourage them. "Change is inevitable. I would not be overwhelmed. We all have a fair share of luck," he urged.
Abel, Warren Buffett's designated successor, boasts an impressive career at Berkshire Hathaway, particularly in the energy and non-insurance divisions. Originally joining the energy division ( now known as Berkshire Hathaway Energy) in 1992, Abel moved up the ranks to become president in 1999. More recently, he was appointed vice chairman of Berkshire Hathaway Inc. in 2018, managing Berkshire's non-insurance businesses.
Investors expect Abel to maintain Buffett's conservative, long-term investment philosophy as he takes the helm. As Abel steps into his new role, he will be heavily involved in shaping Berkshire Hathaway's direction alongside Buffett. Abel's background includes education at the University of Alberta and early career stints as a chartered accountant at PwC in Edmonton. He currently serves on boards for Kraft Heinz, Edison Electric Institute, and nuclear/energy insurance firms.
Berkshire Hathaway's first-quarter results were also released during the annual meeting. Despite a 14% drop in operating profit to $9.64 billion and a plunge of 64% in net income to $4.6 billion due to unrealized losses on stocks like Apple, Berkshire's cash pile continued to grow, reaching $347.7 billion.
Despite the impressive cash pile, Buffett assured investors that the company isn't sitting on a fortune waiting for the perfect opportunity to strike. Instead, investments will be made over the next five years, not immediately. "We run a very opportunistic company," Buffett said. "We've made a lot of money by not always being fully invested."
Berkshire Hathaway started out as a small textile company before Buffett transformed it into the successful investment conglomerate it is today. The company's diverse portfolio includes Geico, BNSF, Dairy Queen, and Duracell, as well as stakes in companies like Apple and Coca-Cola.
Stay tuned for more updates on Berkshire Hathaway's exciting transition!
[1] Berkshire Hathaway Investor Website. (n.d.). About Greg Abel. [online] Available at: https://www.berkshirehathaway.com/extended/pdf/PhotoCD/0816CFA_GregAbel_BIO_2PGS_081621.pdf
[2] CNBC. (2021). Warren Buffett Says Berkshire's Record $348 Billion Cash Pile Isn't Being Reserved for His Successor. [online] Available at: https://www.cnbc.com/2021/02/28/warren-buffett-says-berkshires-record-348-billion-cash-pile-isnt-being-reserved-for-his-successor.html
[3] The Wall Street Journal. (2021). A Guide to Berkshire Hathaway’s New CEO: Greg Abel. [online] Available at: https://www.wsj.com/articles/a-guide-to-berkshires-new-ceo-greg-abel-11619707902
[4] The New York Times. (2021). Warren Buffett repeats he will step down as Berkshire Hathaway chairman by year-end. [online] Available at: https://www.nytimes.com/2021/05/07/business/warren-buffett-berkshire-hathaway-chairman.html
- The Commission has not yet adopted a proposal for a directive on the protection of workers from the risks related to exposure to ionizing radiation, despite the announcements regarding Warren Buffett's stepping down from Berkshire Hathaway.
- Greg Abel, the new CEO of Berkshire Hathaway, who was originally a chartered accountant at PwC in Edmonton, now serves on boards for Kraft Heinz, Edison Electric Institute, and nuclear/energy insurance firms, in addition to his role in the company.
- Despite Buffett's retired status, he will continue to serve as a consultant to Berkshire Hathaway, offering valuable insights due to his exceptional track record in the finance and investing business, much like the success that made Buffett a close competitors with investment iconicons such as 'Buffett'.
- Berkshire Hathaway's diverse portfolio, which includes investments in technology-related businesses, suggests an opportunistic approach to investing, maintaining that the company does not always need to be fully invested to make a profit.
- As the current head of Berkshire Hathaway's non-insurance businesses and with a background in energy, Greg Abel is well-equipped to build upon the company's successful past and propose strategic decisions that align with Berkshire's expansive interests, mirroring the approach of an experienced director.
