Warren Buffett, 94, to step down from Berkshire Hathaway
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The news: Warren Buffett will step down as chief executive of Berkshire Hathaway at the end of 2025, capping a 60 year run at the helm which saw the conglomerate reach a USD1.16 trillion ($1.8 trillion) valuation.
The numbers: Buffett’s personal wealth exceeds USD168 billion according to Forbes magazine, nearly all of which is in Berkshire stock. Buffett’s success saw Berkshire achieve a 20% compounded annual gain in stock between 1965 and 2024. Berkshire's share price has increased 19% this year, compared with a 3% drop in the S&P 500.
Berkshire reported Q1 2025 earnings on Saturday, which saw operating earnings, (which includes Berkshire’s insurance and railroad businesses) fall 14% to USD9.6 billion, down from the USD11.2 billion reached in the same quarter last year. On a per share basis, operating earnings were USD4.47 last quarter, down from USD5.20 per class B share in the same period one year ago.
Much of the decline was driven by a 48.6% dive in insurance-underwriting profit, with the company adding that the Southern California wildfires led to a USD1.1 billion loss in Q1.
Berkshire’s cash holdings swelled to USD347 billion from around USD334 billion at the end of 2024, a net seller of stocks for the tenth consecutive quarter.
The context: Announcing his plans at the Berkshire Hathaway annual stockholders meeting in Omaha, Nebraska over the weekend, Buffett said that he will hand over the reins to vice chairman of non-insurance operations, Greg Abel.
“The time has arrived where Greg should become the chief executive officer of the company at year-end and I want to spring that on the directors and get that recommendation,” he said.
“That’s the news hook for the day,” Buffett said. “Thanks for coming.”
Buffett had previously named Abel as his successor, but had not given Abel or Berkshire’s other directors any advance notice around timing, making the surprise announcement at the end of the 60th annual shareholder meeting in Omaha, Nebraska.
"I couldn't be more humbled and honoured to be part of Berkshire as we go forth," Abel told shareholders.
Buffett said he does not plan to sell any Berkshire stock and that nearly all of it will be donated after his death.
Before announcing his plans to step down, Buffett strongly defended the importance of trade, arguing that tariffs should not be a "weapon" and the US would be better off if other countries shared its prosperity. The company warned that the pace of industry changes, including international trade policies has accelerated this year, and considerable uncertainty around the outcome of these changes remains.
During the AGM, Berkshire shareholders rejected a resolution requiring the company to report on risks from its subsidiaries' race-based initiatives. The proposal was one of several DEI related proposals voted down during the meeting.
The sources: Berkshire Hathaway, FT, Bloomberg, CNBC
