Berkshire board confirms Greg Abel as CEO, Buffett to remain chairman
Berkshire Hathaway's board has unanimously appointed Greg Abel as the new CEO, effective January 1, succeeding Warren Buffett, who will remain chairman. This transition, surprising to both Abel and the board, follows Buffett's six-decade leadership. The announcement led to a dip in Berkshire's Class B shares, raising investor concerns about the future performance of its diverse holdings under new leadership.
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Berkshire Hathaway's board voted unanimously to name Greg Abel CEO starting January 1, while Warren Buffett will stay on as chairman, the company said on Monday.The move officially initiates the transition that will see Buffett step aside after six decades at the helm of the conglomerate. Buffett surprised shareholders on Saturday, when he said he would step down as CEO at the end of the year.Abel and most of Berkshire's board of directors were not aware of his plans prior to the announcement. Buffett had said the conglomerate's board would meet on Sunday to discuss the transition.Having Buffett in the chair role could add a layer of stability and reassure investors as Abel takes over from an iconic figure whose reputation and legacy loom large.Berkshire, which owns railroads, insurance companies and an ice-cream maker, has been planning for decades for the eventuality when Buffett, 94, who has run the company since 1965, is no longer there.Class B shares of the company were down nearly 2% in premarket trading.Class B shares of the conglomerate dipped to $530.01, putting them on course to wipe out billions of dollars in market value if losses hold through the session. They have jumped about 33% in the past year, outperforming the 12% gain in the S&P 500 .The surprise timing of the announcement, "notwithstanding likely successor Greg Abel's increasingly demonstrated competence, should pressure the shares on Monday", KBW analyst Meyer Shields wrote in a note.Berkshire shareholders said it remains unclear how the holding company's 189 operating businesses, $264 billion of stocks and $348 billion of cash will fare after the man so intertwined with it leaves the stage.Buffett's exit from the company "will probably impact investors' view of Berkshire more than it will actual operations", Shields said.Prior to Buffett's announcement, which Abel was unaware of, the vice chairman told attendees at the annual meeting he would be "more active, but hopefully in a very positive way", in overseeing Berkshire subsidiaries, though they would continue running "very autonomously".Leaders of most Berkshire businesses have reported to Abel since 2018, while its insurance units such as Geico, General Re and National Indemnity have reported to Vice Chairman Ajit Jain, which they will continue doing.
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