Berkshire Hathaway Inc. Chief Executive Officer Warren Buffett announced he would retire at the end of the year during the conglomerate’s annual shareholder meeting in Omaha, Neb. on May 3, ending a 55-year run in his role.
He formally nominated vice-chairman of non-insurance operations Greg Abel as the next chief executive officer to Berkshire’s board of directors during a meeting the following day.
The announcement came after a lengthy question-and-answer session during the shareholder meeting.
Buffett did not accept questions regarding the announcement.
He also revealed that only two board members, his children Susan Alice and Howard Graham Buffett, knew of the announcement beforehand. Abel was not aware that the announcement would be made during the meeting.
Buffett told shareholders that he would not sell any shares of Berkshire.
“The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg’s management than mine,” he said.
Charlie Munger, Berkshire’s vice chairman and Buffett’s business partner from 1978 until his death in 2023, revealed during the 2021 annual shareholder meeting that Abel would eventually succeed Buffett.
Buffett said in a letter to his shareholders, released on Feb. 22, that “it won’t be long before Greg Abel replaces me as CEO and will be writing the annual letters.”
Despite this hint, the news of Buffett’s retirement came as a shock due to his previous statements that he would not retire.
“It surprised me, but it impresses me,” Berkshire director Ronald Olson said in an interview with CNBC regarding the announcement. “Warren has lived a life full of surprises. Very few of his decisions have been anything other than sensational.” Olson also spoke about Abel’s character, saying his humility and honesty “is very important for the young people to learn.”
“If you looked at Berkshire Hathaway Energy 10 years ago and looked at it today, or take it back to its beginning, Greg has been instrumental in making acquisitions for a long time,” Olson said regarding Abel’s abilities.
Olson will step down from his board position following a policy change requiring directors to leave the position after turning 80 years old.
Politicians and business leaders reacted to Buffett’s retirement news. In a statement, Omaha Mayor Jean Stothert called Buffett “a generous philanthropist, wise mentor, and champion,” citing his work in making his hometown “known not just for economic strength, but for generosity, integrity and heart.”
Industry experts also weighed in on the announcement of Buffett’s retirement.
“I think he’s built up a strong team that are already playing a greater role in decision making,” B. Riley Wealth Advisors Inc. Chief Market Strategist Art Hogan said. “And stepping back now leaves Greg Abel with a lot of cash to move forward with.” But not everyone is ecstatic about the change in leadership.
“There is no indication that Berkshire Hathaway wants to be a climate leader, and Abel’s appointment is Exhibit A,” Rose Monahan, a staff attorney at Sierra Club, an environmental organization, stated, “While Berkshire Hathaway executives and shareholders rake in billions of profit every year, the rest of us are paying the price for their climate inaction.”
Buffett will remain on the board of directors as chairman. He stated he “would still hang around and conceivably be useful in a few cases.”
