From Yahoo Finance: 2025-05-03 14:05:00

Warren Buffett plans to step down as CEO of Berkshire Hathaway at year-end, recommending Greg Abel as his successor. The board will meet on Sunday to discuss the transition. Buffett has no plans to sell his shares. Since 1970, Berkshire has compounded at almost 20% annually, delivering a 5,502,284% return.

Abel, currently the vice chairman, will take over as CEO. Berkshire’s stock has outperformed the S&P 500, rising 17% this year. Buffett discussed the decision with two board members, his children Susie and Howard, prior to the announcement. The board will finalize the decision at a later meeting.

At Saturday’s meeting, Abel emphasized Berkshire’s $300 billion cash position as a strategic asset. The company’s cash holdings were over $347 billion at the end of Q1. Abel joined Berkshire in 1999 and became CEO of Berkshire Hathaway Energy in 2008. He was named vice chairman in 2018.

Buffett has written in his annual letters about finding the right successor for Berkshire. He previously identified three candidates for the CEO position. Charlie Munger, who passed away in 2023, praised Abel as a “world-class” performer. In 2006, Buffett highlighted the importance of temperament and risk management in a successor.

The decision to pass the CEO torch to Abel marks a significant transition for Berkshire Hathaway. Buffett’s legacy of strong shareholder returns and value creation will now be carried forward by Abel. The board’s decision to approve Abel as CEO underscores the confidence in his leadership and strategic vision for the company. In a recent interview, Warren Buffett emphasized the importance of emotional stability and independent thinking for successful long-term investing. He highlighted the challenge of retaining talented individuals in the investment field, especially when they could earn more elsewhere.

Buffett’s partner, Charlie Munger, expressed confidence in Berkshire Hathaway’s ability to keep top talent like Ajit Jain and Greg Abel on board, despite lucrative offers from competitors. However, the real test of this loyalty will come in 2026 as the company enters a new era.

For more insights on stock market trends and news, click here for in-depth analysis. Stay informed with the latest financial and business updates from Yahoo Finance.

Read more: Warren Buffett to step down as Berkshire Hathaway CEO at year-end, Greg Abel to take over