By Jonathan Stempel, Niket Nishant and Medha Singh
(Reuters) – Warren Buffett will stay on as chairman of Berkshire Hathaway (BRK-B, BRK-A) after Vice Chairman Greg Abel takes over as chief executive officer, the conglomerate said on Monday.
Berkshire shares fell as much as 6.8% in Monday trading, after the 94-year-old Buffett announced on Saturday that he would step down as CEO, ending six decades at the helm for the legendary investor.
Although Abel’s expected ascension had been known for four years, the announcement at Berkshire’s annual meeting in Omaha, Nebraska, was a surprise.
It overshadowed Berkshire’s first-quarter results, where insurance losses tied to wildfires caused operating profit to fall short of analyst forecasts.
“Buffett’s retirement announcement was a shocker,” Morningstar analyst Greggory Warren wrote.
Buffett took control of Berkshire, once a floundering textile mill, on May 10, 1965, after a dispute with prior management.
He transformed the company into a conglomerate worth $1.16 trillion as of Friday.
Berkshire has 189 businesses such as Geico insurance, the BNSF railroad, Dairy Queen and See’s Candies, and a huge stock portfolio including Apple.
The company’s stock price has reflected Buffett’s success, posting annualized returns that nearly doubled the Standard & Poor’s 500 index.
Berkshire’s board of directors approved Abel’s promotion, which will take effect on January 1, 2026, at a meeting on Sunday.
Abel and most of the board had not known of Buffett’s announcement in advance. Buffett said he had given a heads up to his children Howard and Susie, who are directors.
“His sticking around provides reassurance to shareholders,” said Kyle Sanders, an analyst at Edward Jones & Co. “Abel will be making large and important decisions, but having Warren around is a nice resource and he can serve as a mentor.”
Staying around means Buffett could play a role if Berkshire made another major acquisition, which has eluded him for nearly a decade. Berkshire ended March with $347.7 billion of cash.
“It would give shareholders confidence that yes, we’re still Berkshire and we’ll still do large deals when the opportunity presents itself,” Sanders said. “It gives shareholders confidence the company is not going to change even as the leadership does.”
Buffett’s investing success, lessons taught including through his annual letters to Berkshire shareholders and his modesty made him a household name and American icon earning him the title the “Oracle of Omaha.”
