Berkshire shareholders are ‘stunned’ as Buffett announces plan to step down

OMAHA, Neb. — Berkshire Hathaway shareholders who came from around the world to Omaha for the conglomerate’s annual meeting this weekend had no idea how historic this year’s event would be.

Warren Buffett, the billionaire and CEO who turned what was once a failing Massachusetts textile company into a $1.2 trillion titan, announced his intention to step down by the end of the year. The news astonished investors, whom Buffett has long characterized as partners in his value investing mission.

“I’m stunned,” said Jim Ross, a bookstore manager and shareholder who lives four doors down from the “Oracle of Omaha” in the Dundee–Happy Hollow neighborhood of Omaha.

Buffett ended the marathon-length question-and-answer session by saying he would ask to leave the chief executive post by the end of the year at Berkshire’s board meeting on Sunday. Buffett said he had only told two of his children who are also on the board before making the announcement on Saturday, and that it would be a surprise for other members.

He had previously named Greg Abel, chief of Berkshire’s energy unit, as his successor. Buffett said he would remain with the business in some capacity.

“I think the time has arrived where Greg should become the chief executive officer of the company at year end,” Buffett said, before adding that he has no intention to sell any Berkshire stock.

If the board approves Buffett’s request, it will mark the end of the 94-year-old’s six-decade tenure at the helm. This year’s meeting, which annually draws tens of thousands of shareholders from around the world, highlighted his leadership with an exclusive book on the history of the firm. Berkshire auctioned signed copies, with the proceeds benefiting a local charity focused on the homeless community in South Omaha.

The summit also included key changes that brought Buffett’s longevity to mind for shareholders like Grant Macklem, a Colorado Springs-based software engineer. Berkshire announced that Buffett would take questions for a shorter period than usual, and with a quicker break in between segments. There was also no introduction video, a component of the day that investors have come to love over the years.

Macklem, who’s been an investor for about 15 years, said he wanted to come this year to ensure he could see Buffett at the head of the company at least one more time.

“We could kind of see it coming someday, just, I didn’t expect it this year,” he said. But, “it’s better to have some announcement, some flow, some time to prepare for the markets, rather than a worst-case scenario.”

Macklem said he considered adding to his stake ahead of the meeting, but didn’t get around to it. The 44-year-old said he’d consider picking up additional shares, which hit an all-time high in Friday’s session, if there’s any pullback next week.

Buffett’s earlier acknowledgement in the 2024 shareholder letter that it “won’t be long” before Abel would take over writing the annual memo further raised suspicion. He also mentioned his use of the cane in the letter, which was released in February.

“The announcement memorializes some of what we already knew,” said Bill Stone, CIO at the Glenview Trust Company and a longtime shareholder. “Greg has effectively been running the operating businesses day to day. But he will also now take over capital allocation decisions.”

While Berkshire attracts individual traders, the firm’s focus on value investing has also garnered dollars from bigger names. For those employing others’ capital, Berkshire’s succession plan has been an existential question that has loomed particularly large since the death of Charlie Munger, Buffett’s longtime friend and business partner, in 2023.

“Berkshire is no longer a stock picker with great cash flow. Now a group of well-known businesses with cash to reinvest,” said Bill Smead, CIO of Smead Capital Management. “Losing Charlie and age have ended the era for Warren.”