Warren Buffett Steps Down as Berkshire Hathaway Chair

Warren Buffett stepped down as Berkshire Hathaway chair this week, according to a company statement. He will remain on the board as a director and retain a large personal stake in the company.

The board named Greg Abel, vice chairman for noninsurance operations, to assume the chair role. Abel oversees utilities, energy and manufacturing units and had been identified by Buffett previously as his successor.

Berkshire noted that operating leaders and the company strategy will continue under the current executive team and the board. The firm’s decentralized model keeps day-to-day control with managers of acquired businesses.

Investors are assessing how the leadership change could affect investment decisions, the firm’s holdings strategy, balance-sheet management and how markets will price Berkshire stock without Buffett as chair. Market participants have highlighted potential effects on the timing of large acquisitions and on the deployment of cash reserves.

Analysts and shareholders point to continuity in senior management. Greg Abel has worked at Berkshire for more than a decade. Ajit Jain remains head of insurance operations and several long-tenured executives continue to run major units.

Buffett disclosed his expected successor and contingency plans in the 2018 annual letter and earlier company documents described succession planning. Those disclosures and the presence of experienced deputies were referenced by some investors as evidence of a managed handover.

Berkshire is organized as a holding company with a large equity portfolio, many wholly owned subsidiaries and sizable cash balances. Buffett’s long-standing approach emphasized buying businesses and holding them over time while keeping cash available for opportunistic acquisitions.