Warren Buffett is retiring, will hand the top job at Berkshire to Greg Abel by the end of 2025. Here’s what you need to know

After many decades at the helm of Berkshire Hathaway, Warren Buffett is retiring. After founding his empire in 1965, he built it into a US$1tn+ empire owning many of America’s best companies and profiting off them. But of course, all good things must come to an end – at least a tenure led by the company’s original founder.

Warren Buffett is retiring

Buffett’s retirement was announced at Berkshire’s annual shareholders meeting. It was long anticipated that it would happen someday – as early as 2006 when Buffett mentioned it in his shareholder letter – but no one knew when.

Now we know that will happen by the end of 2020 and one of his closest confidants, Greg Abel, is taking over. This step had been anticipated as early as 2021 when Buffett pointed to that move and he said so again in 2024.

‘At 94, it won’t be long before Greg Abel replaces me as CEO and will be writing the annual letters,’ Buffett said.

But now, in 2025, is the year when it will happen.

Greg Abel is taking the reigns

Greg Abel has overseen Berkshire’s non-insurance businesses since 2018, after building its energy unit into a major US power provider.

At 62, he is relatively young (at least compared to other Berkshire executives, notwithstanding he is at a stage when many other US CEOs retire, but of course Berkshire is different). Abel worked at PwC, starting right after graduating from the University of Alberta with a commerce degree in 1984.

He moved onto a small company called CalEnergy. CalEnergy bought MidAmerican Energy in 1999 and adopted its name. Right at the same time, Buffett’s empire bought into MidAmerican Energy, and Abel took the top job in 2008, holding it until 2018 when he stood up into a senior role in Berkshire itself – Berkshire having renamed MidAmerican Energy as Berkshire Hathaway Energy in 2014.

Abel has also served on the board of Kraft Heinz and he lives Iowa, one of the neighbouring states of Nebraska where Berkshire is based. He has a net worth of over US$1bn, but (like the man he has been an understudy to) lives a modest lifestyle considering his wealth.

So what will change?

Well, seemingly the annual meetings of Berkshire will be less busy because there’ll be less of a push to ‘see Warren’, although as long as Warren is alive he might have some kind of informal role at them. At the very least, he’ll attend them.

Clearly Berkshire annual reports will continue, and they may still be fabled to a degree. Buffett said in 2024’s letter to Berkshire shareholders,’ Greg shares the Berkshire creed that a report is what a Berkshire CEO manually owes to owners. And he also understands that if you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well’.

And of course, we’ll still watch Berkshire’s movements (i.e. what it buys and sells) with eager interest. Abel has hinted himself that Berkshire’s philosophies would continue, in particular the maintaining the ‘fortress of a balance sheet’ allowing investments to be made without debt for equity finance. The very reason Berkshire’s share price is so high is because it has not had to raise dilutionary equity finance.

However, Abel might have a more hands-on management style in that he may engage directly with many of the investee companies. And while he has not specifically said so, it would not be surprising to see a greater focus on energy companies as that is his specialty.

Don’t discount the prospect of Berkshire paying dividends either. Buffett has long been opposed to it arguing cash in his hands is better than that of shareholders, although with US$350bn as of March 31, Abel may want to avoid any pressure of shareholders. And after all, Abel is a career manager rather than investor. Don’t get us wrong, we are not saying he’ll fail, but he’ll be a different kind of boss of Berkshire considering his background.

It will also remain to be seen who will be chairman of the company. Maybe Warren’s son, Howard Buffett? Howard has his father’s endorsement?

Conclusion

The retirement of Warren Buffett will happen this year, and Greg Abel will takeover. Some things about Berkshire won’t change, but some things could well – both moves one would reasonably expect given Abel’s different background, and perhaps a few surprises.

Whatever happens from here, the retirement of Warren Buffett marks the end of a story we will never see the likes of again.

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