Berkshire Hathaway’s (NYSE:BRK.A) (NYSE:BRK.B) long-time CEO, Warren Buffett, is retiring and he passing the reigns in the hands of a very able man, named Greg Abel. Buffett’s Berkshire held its most anticipated annual shareholder meeting on May 3, where the 94-year-old announced his retirement and hailed Abel as his official successor. Effective January 1, 2026, Abel will become President and CEO of Berkshire, while Buffett will continue as chairman of the board of directors.
Although investors were aware that a day would come when Buffett would leave his beloved Berkshire, the news of his retirement led to a significant market reaction. On May 5, both Class A and B shares of Berkshire Hathaway declined by 5%. This share price drop reflects that shareholders do not trust anyone else to handle Berkshire the way Buffett did. And aptly so, Buffett has generated a whopping 5,000,0000% return for shareholders over this tenure, according to a report by CNN.
Who Is Greg Abel?
Originally from Canada, Abel joined Berkshire in 2000, when the company acquired a majority stake in MidAmerican Energy, where he served as president. Abel quickly climbed the ranks to become one of Buffett’s most trusted executives. Abel earned a Bachelor of Accounting degree from the University of Alberta in 1984. After completing his degree, Abel worked at PricewaterhouseCoopers before switching to CalEnergy, which was later acquired by MidAmerican.
Abel has been instrumental in successfully carrying out a large number of acquisitions for Berkshire. Before being named CEO, Abel was leading all of Berkshire’s non-insurance businesses, acting as the chairman and CEO of Berkshire Hathaway Energy and vice-chairman of non-insurance operations. Reportedly, in Q1FY25, the companies under Abel’s leadership generated a cumulative $5 billion in earnings. Abel resides at Des Moines, where Berkshire Hathaway Energy is headquartered.
Abel Takes on a Towering Challenge
At 62, Abel faces a formidable challenge of steering Berkshire into its next chapter, with the onus of trying to replicate Buffett’s success without merely imitating his approach. Considering Buffett’s unique investment style and the legacy he leaves behind, it is almost certain that no one can truly replicate his singular impact. Over his 60-year-long career at the helm of Berkshire Hathaway, Buffett has faced daunting challenges and emerged victorious, thanks to his disciplined stock-picking prowess and business acumen.
Abel has proven his expertise and knack for leading Berkshire in the same decentralized manner that Buffett has done over the years. Executives from several Berkshire subsidiaries praise Abel for always being available when needed to strategize and make tough decisions, but also said that Abel always challenges them to prod the difficult path.
Buffett Goes Gaga Over Abel
There must be something exceptional about the man whom the Oracle of Omaha has chosen to lead his trillion-dollar business empire. Notably, Buffett has been promoting Abel as his heir for several years, making statements such as, “He does all the work, and I take all the bows.” He was also heard saying once about Abel, “He’s a big improvement on me, but don’t tell anybody.”
Buffett has thoroughly tested Abel’s capabilities. He named Abel Vice Chairman, sought his help in making lucrative investments in five of Japan’s major trading houses, and allowed Abel to answer at the company’s annual meetings, sitting right by his side. Abel is even instrumental in transforming Berkshire Hathaway Energy into a massive business through strategic acquisitions and investments.
Buffett’s long-time friend, confidant, and vice chairman of Berkshire Hathaway, Charlie Munger, had also praised Abel at various occasions previously. Munger was heard saying, “just sensational at being a business leader, both as a thinker and as a doer.” Additionally, he has attributed Abel as being “a tremendous learning machine,” and entrusted him to “keep the culture” of Berkshire Hathaway.
Buffett vs. Abel
While Buffett often makes statements with pun intended, Abel seems to be a more sophisticated and a “politically correct” version of his leader. When asked at the annual shareholder meeting on May 3 how his leadership of Berkshire Hathaway’s subsidiaries would differ from Buffett’s, Buffett had a simple answer, “Better.” In contrast, Abel expressed his approach by saying, “More active, but hopefully in a very positive way.”
These contrasting responses highlight their differing communication styles, Buffett’s directness and Abel’s more measured speech. Despite these differences, both share a commitment to Berkshire Hathaway’s core principles and long-term success. Looking ahead, Abel faces a towering challenge of managing Berkshire’s record cash pile of $347.7 billion. Abel said before the announcement that the company’s investment philosophy would remain unchanged under his leadership. However, only time will tell how and when he successfully makes Buffett-like investment decisions.
Is Berkshire a Good Stock to Buy?
On TipRanks, BRK.B stock has a Moderate Buy consensus rating based on two Buys versus one Hold rating. Also, the average Berkshire Hathaway price target of $544 implies 6.2% upside potential from current levels. Year-to-date, BRK.B stock has gained nearly 13%.
