OMAHA, Neb. — Warren Buffett said Saturday that his designated successor, Greg Abel, will have the final say on the matter. Berkshire Hathaway investment decisions when the Oracle of Omaha is no longer at the helm.
“I would leave capital allocation to Greg, and he knows business very well,” Buffett told a room full of shareholders at Berkshire’s annual meeting. “If you understand business, you will understand common stock.”
Abel, 61, became known as Buffett’s heir apparent in 2021 after Charlie Munger accidentally made the move at a shareholder meeting. Abel oversaw much of Berkshire’s vast empire, including energy, railroads and retail.
Buffett offered the clearest picture of his succession plan to date after years of speculation about the exact roles of Berkshire’s top executives following a possible transition. The famed investor, who turns 94 in August, said his decision was influenced by how much Berkshire’s assets had grown.
“I used to think differently about how this would be handled, but I think the responsibility should be on the CEO, and whatever the CEO decides can be helpful,” Buffett said. “Berkshire has grown so big that we don’t want to have 200 people around us, each managing a billion. It just doesn’t work.”
Berkshire’s cash hoard grew to nearly $189 billion at the end of March, and its mammoth stock portfolio holds a whopping $362 billion worth of stocks, based on current market prices.
“I think with the amount of money we’re going to have, you have to think very strategically about how to do very big things,” Buffett added. “I think the responsibility should rest squarely with Greg.”
Although Buffett made it clear that Abel would take over as CEO, questions still remained about who would control Berkshire’s public stock portfolio, where Buffett had amassed a huge following by making huge profits through investments in companies such as Coca Cola And Apple.
Berkshire investment managers Todd Combs and Ted Weschler, former hedge fund managers, have helped Buffett manage a small portion of the stock portfolio (about 10%) over the last decade or so. There was speculation that they might take over some of the Berkshire CEO role when he was no longer able to do so.
But based on Buffett’s latest comments, it appears Abel will make final decisions on all capital allocations, including stock selection.
“I think a CEO should be a person who can weigh buying a business, buying shares, doing all kinds of things that might come up at a time when no one else wants to leave,” Buffett said.
Abel is known for his deep experience in the energy industry. Berkshire acquired MidAmerican Energy in 1999, and Abel became the company’s CEO in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.
Correction: Berkshire’s stock portfolio is worth $362 billion. In the previous version this figure was distorted.