With Warren Buffett preparing to step down as CEO of Berkshire Hathaway after six decades at the helm, financial advisors and investors should expect meaningful, though measured, changes to one of the most closely followed companies in the investment world.
While major shifts may not occur before Buffett formally exits at the end of 2025, his departure will set the stage for a new era under Greg Abel, the designated successor, assuming board confirmation.
Abel, currently 62, is slated to become CEO at an age when many executives consider retirement. However, Buffett has made it clear that Berkshire doesn't operate under conventional timelines, and Abel appears ready for a lengthy tenure.
His operational experience—especially leading Berkshire Hathaway Energy—positions him well to manage the sprawling $1.2 trillion conglomerate. While Buffett has suggested he may play an informal, advisory role going forward, the company’s future direction will increasingly rest with Abel.
It remains unclear whether Buffett will also relinquish his chairmanship. If he does, his son, Howard Buffett, a current board member and longtime trustee of his father's vision, is a likely candidate. Succession at the chairman level would give Abel the autonomy to set a fresh course while preserving Berkshire's foundational principles.
One of the most anticipated shifts could involve capital allocation, particularly regarding Berkshire's historic reluctance to pay a dividend. As of March 31, the firm held a record $350 billion in cash and equivalents. Buffett has always argued that he could deploy that capital more effectively than shareholders could.
However, Abel may face increasing pressure to return capital to shareholders, particularly if opportunities for large-scale investments remain limited. Advisors should monitor closely whether a dividend—regular or special—becomes part of Berkshire’s policy under new leadership, potentially as early as 2026.
Abel brings a strong managerial background but lacks Buffett’s legendary investment acumen, raising questions about how Berkshire’s massive equity portfolio will be managed. For years, it was assumed that Todd Combs and Ted Weschler—who each currently manage about 10% of Berkshire’s $300 billion equity portfolio—would inherit the entire portfolio post-Buffett. But Buffett has recently stated he expects Abel to retain oversight of the investment portfolio, just as Buffett has done.
That plan could prove impractical. Running the broader Berkshire organization, which includes dozens of business units such as BNSF Railway and the insurance operations, is a full-time job in itself. Investment professionals like Bill Smead of the Smead Value Fund have argued that Combs and Weschler should be elevated to primary investment roles to maintain continuity and ensure specialized focus on the portfolio, which includes Apple, Bank of America, Coca-Cola, and American Express as top holdings.
Abel’s deep understanding of the utility and energy sectors also presents a unique opportunity for expansion. As former head of Berkshire Hathaway Energy, he may prioritize organic growth and acquisitions in these areas.
Berkshire already owns 28% of Occidental Petroleum, and speculation continues about whether it might eventually acquire the company outright. Occidental CEO Vicki Hollub has described the prospect of joining Berkshire fully as “a dream come true,” though Buffett has publicly downplayed the idea of a full buyout.
Despite a 14% drop in operating earnings during the first quarter, Berkshire still posted nearly $10 billion in after-tax profits, and its cash hoard continues to grow by an estimated $40 billion per year.
At the annual shareholder meeting, Abel offered few specifics about capital deployment, merely stating his intent to preserve a strong balance sheet and reinvest in core operations. But that leaves advisors and institutional investors alike looking for more concrete guidance in the near term.
Berkshire's equity strategy has also been relatively muted in recent quarters. The firm was a net seller of equities in 2023, offloading over $130 billion, including large portions of its Apple stake. The trend continued in Q1 2024, with an additional $1.5 billion in net stock sales. Berkshire hasn’t repurchased shares since May 2023—likely a function of valuation, with the stock trading near record levels.
Class A shares closed Friday at $809,000, up roughly 20% year to date, outperforming the S&P 500’s 3% decline. On a total return basis, Berkshire’s performance under Buffett is unmatched: a 40,000-fold increase since 1965, equating to approximately 20% annualized returns, compared to about 10% for the S&P. KBW analyst Meyer Shields calls Buffett “the most iconic CEO in the history of CEOs.” Abel now steps into what is arguably the most prominent CEO role in corporate America.
Still, the market’s reaction to Buffett’s announcement reflects some investor unease. Over dinner in Omaha following the annual meeting, investors suggested that shares could fall as much as 3% in early trading on Monday—more as a response to surprise timing than to disagreement with the transition itself. Many long-time shareholders may take profits, reassessing their allocations as the company enters uncharted leadership territory.
The insurance division, long led by Ajit Jain, could also be in flux. Jain, now 73, may step down, possibly opening the door for Joe Brandon—a seasoned executive who joined Berkshire through the 2022 Alleghany acquisition—to take over. Such leadership changes would be closely scrutinized by institutional clients and allocators, especially those with material exposure to Berkshire’s insurance units, which remain core to the firm’s capital generation engine.
As Abel takes control, he inherits a business with unmatched financial strength, significant optionality, and a fiercely loyal shareholder base. But he must also decide how—or whether—to modernize the company’s approach to investor engagement. Berkshire remains famously opaque by today’s standards: it lacks an investor relations department, eschews quarterly earnings calls, and provides minimal segment-level financial disclosure, particularly for units like GEICO.
Some analysts, including CFRA’s Cathy Seifert, believe these practices must evolve. As more institutional investors gain exposure to Berkshire post-Buffett, transparency and access could become larger priorities.
Abel demonstrated his grasp of company operations during the annual meeting and could enhance credibility further by hosting earnings calls or publishing more frequent updates. This would offer financial professionals and RIAs better insight into the firm’s direction and strategy.
Berkshire’s annual meetings have long served as a key forum for shareholder engagement, but even these may need to adapt. The 2024 meeting featured numerous questions from teenage attendees—heartwarming, perhaps, but not particularly relevant to institutional stakeholders or high-net-worth advisors. A more structured approach to Q&A or follow-up sessions with business unit leaders may prove more informative moving forward.
Abel has received strong endorsements from across the organization. Brooks Sports CEO Dan Sheridan noted Abel’s responsiveness and accessibility, stating, “I’m blown away by his capacity and bandwidth.”
Abel’s financial alignment with shareholders is also notable—he owns approximately $185 million in Berkshire stock and netted $870 million from selling his 1% stake in Berkshire Hathaway Energy in 2022. Last year, his total compensation was $21 million, nearly all in cash. True to Buffett’s philosophy, Berkshire continues to forgo stock-based compensation to reinforce shareholder alignment.
Buffett’s personal stake remains substantial: he owns 14% of Berkshire’s equity and controls roughly 30% of voting rights through supervoting Class A shares, valued at over $160 billion. After his passing, these shares will be overseen by a foundation controlled by his three children, who are expected to uphold his commitment to long-termism and corporate unity.
Despite some investor chatter, a corporate breakup appears unlikely. Buffett has consistently opposed such a move, and Berkshire’s board—led by voices like Chris Davis—has made it clear that its mandate is to protect the company’s unique culture and defend against external pressure to conform to conventional norms.
Ultimately, the real test for Berkshire in the post-Buffett era will lie in preserving its distinctive DNA while evolving in ways that serve shareholders, maintain operational excellence, and enable transparency where needed. For RIAs and wealth managers, this transition period presents both risk and opportunity—an inflection point worth monitoring closely as one of the most remarkable success stories in capital markets enters its next chapter.
