Warren Buffett has reassured shareholders of Berkshire Hathaway that they have nothing to fear as he prepares to step down as CEO at the end of the year. In a letter to shareholders, Buffett, 95, gave a strong endorsement to his chosen successor, Greg Abel, who he praised as an outstanding leader deserving of their confidence.
Buffett expressed full faith in Abel, saying he has exceeded the high expectations set when he first considered him for the role. “I can’t think of anyone better suited than Greg to manage your and my savings,” Buffett wrote. Abel, 63, has been vice chairman overseeing Berkshire’s non-insurance businesses since 2018 and was publicly named as Buffett’s successor in 2021. Buffett highlighted Abel’s deep understanding of Berkshire’s various companies and applauded his hard work and honesty.
Though Buffett will be stepping down as CEO, he will remain chairman of the company and hold a significant amount of Berkshire stock. He noted that he plans to keep many Class A shares until shareholders build the same level of comfort with Abel that he and his late longtime partner Charlie Munger shared. “That confidence shouldn’t take long,” Buffett said, adding that his children and the board are fully behind Abel.
Buffett’s letter also addressed recent concerns about Berkshire’s stock price, which has dropped 8% since his announcement in early May, while the broader market has climbed. Some investors worry the stock has lost the “Buffett premium” that came from having one of the world’s most respected investors at the helm. Buffett reminded shareholders that Berkshire’s stock has experienced sharp declines three times in the past but has always bounced back. He urged patience and faith in the company’s long-term prospects.
Despite acknowledging that Berkshire’s enormous size restricts the number of outstanding investment opportunities, Buffett said the company’s nearly 200 businesses still have “moderately better-than-average prospects.” These businesses include familiar names like Geico insurance, the BNSF railroad, Dairy Queen, and See’s Candies, along with large holdings in Apple and American Express.
Buffett also announced plans to accelerate charitable donations to family foundations led by his children. On Monday, he gave more than $1.3 billion in Berkshire stock to four family-run foundations. Over the years, Buffett has donated more than half of his Berkshire shares, mostly to the Bill & Melinda Gates Foundation, but after his passing, his children will manage a trust containing his remaining wealth. Donations to the Gates Foundation will cease as the family focuses on their own charities.
Though Buffett will no longer write the company’s annual letters or lead shareholder meetings, he intends to stay in touch with shareholders in the future. Despite his age, he says he feels well and continues to work at Berkshire’s Omaha offices five days a week.
As the company prepares for this transition, Buffett’s confidence in Abel and commitment to Berkshire’s future provide a steady hand for investors. The torch is passing, but the legacy and strength of the company remain intact.