Berkshire Hathaway is entering a new era as Warren Buffett steps back from day-to-day leadership and hands operational control to Greg Abel later this week, setting up a closely watched transition at one of the world’s best-known conglomerates. Buffett, who has led Berkshire since buying its first textile-mill stake in 1962, will remain chairman and plans to keep coming into the office each day to help spot new investments and advise Abel.
Abel’s challenge is to maintain Berkshire’s long-running investment and management approach in a period when the company has struggled to keep pace with its earlier performance. Berkshire had repeatedly outpaced the S&P 500 for decades, but more recently it has faced constraints that come with scale and with finding new, significant acquisitions, including a $9.7 billion purchase of OxyChem this fall that analysts said may not be large enough to materially change profits.
Abel’s role as successor was effectively telegraphed to shareholders in 2021, when the late Charlie Munger assured investors at Berkshire’s annual meeting that Abel would maintain the company’s culture. Buffett, meanwhile, has long sold Berkshire’s model to founders and chief executives selling their companies, saying the businesses could largely keep operating the way they do as long as they deliver results, according to an analyst’s description of how the company’s autonomy fits together.
Cathy Seifert, an analyst with CFRA Research, said it is “natural for Abel to make some changes” in how Berkshire is run, particularly because of the company’s large footprint and workforce. She pointed to the logic of adopting a more traditional leadership approach for an organization with nearly 400,000 employees across dozens of subsidiaries, while also noting that switching styles would only be viewed favorably by the investment community if it improves performance.
At the same time, Seifert described a key limit: Berkshire has “an extremely decentralized structure” in which executives hold substantial decision-making authority, and “everyone associated with the company has said there are no plans to change that.” In practice, Abel has already been operating within the autonomy-focused Berkshire framework, asking executives tough questions and holding them accountable for results even as he follows the company’s model for acquired businesses.
Berkshire has also already implemented changes in its leadership and management structure beyond the succession timeline. Abel announced earlier this month that Todd Combs departed and that Chief Financial Officer Marc Hamburg announced his retirement, and he said he is appointing NetJets CEO Adam Johnson to manage Berkshire’s consumer, service and retail businesses, effectively creating a third division to take work off Abel’s plate. Abel will continue to manage the manufacturing, utility and railroad businesses.
The transition also revives questions investors often ask at Berkshire: whether Abel would push for payouts rather than reinvestment, and whether additional capital-allocation changes could follow if the cash pile can’t find productive uses. From the beginning, Berkshire has argued that it is better to reinvest profits than to make quarterly or annual dividend payments, and it repurchases shares only when Buffett considers them bargains; Buffett has not repurchased shares since early 2024.
One reason investors may expect Abel to face less immediate pressure is Buffett’s remaining ownership and control. Buffett controls nearly 30% of Berkshire’s voting power, which is expected to diminish gradually after his death as his children distribute his shares to charity as agreed, leaving more room for shareholders to pressure for options such as dividends or more conventional buybacks.
Even as leadership changes take place, several business executives are expected to stay in place, leaving one of the biggest open questions centered on how much more management reshuffling follows Combs’ departure. The head of Berkshire’s insurance unit is Vice Chairman Ajit Jain, who is 74, and many of the CEOs across Berkshire’s companies have continued working long after retirement age, in part because they like working for Buffett.
Investor Chris Ballard, a managing director at Check Capital who said Berkshire is his firm’s largest holding, said many of the businesses “can almost take care of themselves,” and he sees a bright future for Berkshire under Abel. Ballard said the departure of Combs is not a sign of broader instability, adding: “As a long-term shareholder, we aren’t too concerned with Todd’s departure and don’t think this is the tip of some sort of iceberg. … It’s just a reminder that Warren’s pending departure is imminent and they’re preparing for a new phase — one that we’re still excited to see unfold.”