Warren Buffett unexpectedly announced on May 3 that he will step down as CEO of Berkshire Hathaway at the end of the year, capping a 60-year era in which the billionaire investor has become a prominent and iconic aspect of the US economy.
Buffett made the statement following the conclusion of Berkshire Hathaway’s annual shareholder meeting in Omaha, Nebraska.
Greg Abel, 62, who was scheduled to become CEO when Buffett retired, should take over at the end of the year, Buffett said. “I think the time has arrived where Greg should become the chief executive of the company at year end,” Buffett, who is 94 years old, told reporters.
Buffett stated that Abel and the other Berkshire board members, with the exception of his children, Susan and Howard, were unaware of his plans prior to the announcement and that he was “springing” this on them.
“I would still hang around and could conceivably be useful in a few cases, but the final word would be what Greg said,” Buffett said, adding that he has “zero” intention of selling any of his Berkshire stock.
The crowd at the CHI Health Center in Omaha gave a standing ovation when they heard the news.
Attendees laughed as Buffett added, “Greg does not know anything about this that I am telling you right now.”
Abel joined Berkshire Hathaway’s board in 2018 as vice chairman of non-insurance operations, where he oversaw several of the conglomerate’s more than 90 subsidiaries, including the BNSF railroad and all of Berkshire’s utilities, retail, and manufacturing businesses.
Buffett said the board of directors would meet on May 4 to examine his idea, which may become official later this year.
Buffett: Helming Berkshire Hathaway ‘an extraordinary luxury’
Buffett’s decision to stand out brings to an end a historic 60-year career in which he converted Berkshire Hathaway from a failed textile firm into a massive trillion-dollar multinational with operations throughout the United States.
“I found myself in this position where I can run the kind of company I want to run and that is an extraordinary luxury,” Buffett told CNN.
“There has never been someone like Warren, and his insight has inspired innumerable others, including myself. “Knowing him has been one of the greatest privileges of my life,” said Apple CEO Tim Cook in a social media tribute. Cook stated that Buffett was leaving Berkshire in good hands with Abel.
Shareholders were clearly surprised by the announcement.
“It surprises me, but it impresses me,” Ron Olson, a Berkshire board director, told NBC News.
CFRA research analyst Cathy Seifert told the Associated Press that Berkshire may try to maintain a “business as usual” approach.
“This was probably a very tough decision for him, but better to leave on your own terms,” Seifert joked.
