Berkshire Hathaway (NYSE: BRK.B) shares fell 2.2% in premarket trading Monday after Warren Buffett announced he is stepping down as chief executive of the conglomerate at the end of the year. The decision marks the end of a 60-year tenure that made Buffett one of the most revered figures in global finance.
Buffett, 94, made the revelation on Saturday during Berkshire’s annual shareholder meeting in Omaha. He confirmed that Vice Chairman Greg Abel will succeed him as CEO.
“I think the time has arrived where Greg should become the chief executive officer of the company at year’s end,” Buffett said. He added that he would still “hang around and conceivably be useful in a few cases,” but emphasized that the “final word” would rest with Abel.
The news triggered a drop in Berkshire Hathaway (NYSE: BRK.B) shares, which fell to $527.83 in pre-market trading, potentially wiping out billions in market value if the downturn holds through the session.
KBW analyst Meyer Shields noted that despite Greg Abel’s demonstrated competence as a leader, the surprise nature of the announcement could weigh on investor sentiment. “This will probably impact investors’ view of Berkshire more than it will actual operations,” Shields wrote in a note.
Some shareholders expressed uncertainty over how Berkshire’s sprawling empire, which includes 189 operating businesses, $264 billion in stocks, and $348 billion in cash, will be managed without Buffett at the helm. However, the announcement did not raise immediate concerns about the company’s operational strength.
Berkshire Hathaway, valued at $1.16 trillion, has seen its shares climb about 33% over the past year, far outpacing the 12% gain in the S&P 500.
Abel, who sources say was not told in advance that Buffett would announce the transition at the meeting, told shareholders that he plans to be “more active, but hopefully in a very positive way” in managing Berkshire subsidiaries. He also stressed that the units would continue to operate “very autonomously.”
Since 2018, most Berkshire business heads have reported directly to Abel, while insurance operations—including Geico, General Re, and National Indemnity—report to Vice Chairman Ajit Jain. That organizational structure will remain in place following the leadership transition.
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