Berkshire Hathaway‘s Greg Abel used his first annual shareholder letter as chief govt to reassure traders that the conglomerate’s tradition of economic conservatism and disciplined investing established underneath Warren Buffett will proceed “into perpetuity.”
“I’m honored by our Board’s determination to nominate me CEO of Berkshire and humbled to succeed Warren as I write my first annual letter to you,” Abel wrote within the missive to start the corporate’s annual report launched Saturday together with Berkshire’s quarterly earnings. “Warren is clearly a really exhausting act to observe.”
Abel, 63, signaled continuity somewhat than change as he takes the reins from the 95-year-old Buffett, who stepped down as CEO firstly of 2026 and stays chairman. The brand new CEO laid out a transparent framework of foundational values for the way he intends to maintain operating the conglomerate: to protect its monetary energy and preserve strict capital self-discipline.
“We preserve a fortress-like stability sheet, making certain Berkshire’s basis is rarely compromised,” he wrote. “We protect this monetary energy by utilizing debt sparingly and prudently. Our substantial liquidity allows us to satisfy our obligations even underneath probably the most antagonistic circumstances and to reply swiftly when alternatives come up.”
Different values he highlighted included a decentralized administration mannequin and “status for integrity.”
Berkshire’s money pile stood at $373.3 billion on the finish of 2025. Abel described the mountain of money as strategic dry powder, which permits the corporate to behave decisively when alternatives floor with out jeopardizing resilience. Abel additionally used the letter to push again on any notion that the sizable money place signified that Berkshire was retreating from investing.
However Abel famous he’ll proceed Berkshire’s long-standing resistance to paying a dividend.
“Our strategy to money dividends continues to be that Berkshire is not going to pay dividends as long as a couple of greenback of market worth for shareholders within reason prone to be created by every greenback of retained earnings,” Abel wrote, including that the board evaluations the coverage yearly.
Overseeing inventory portfolio
Abel emphasised that Berkshire applies the identical disciplined framework whether or not it’s buying a complete enterprise, shopping for shares of a public firm or repurchasing its personal inventory.
“We are going to assess worth rigorously, act patiently, and maintain for the long run — ideally endlessly,” he wrote.
He added that Berkshire’s fairness portfolio will stays concentrated in a small group of American corporations, together with Apple, American Specific, Coca-Cola and Moody’s, that he mentioned Berkshire expects to compound over a long time. Notably absent from that checklist was Financial institution of America, which ranked as Berkshire’s third largest holding on the finish of 2025.
Abel mentioned the concentrated strategy will proceed, with restricted buying and selling exercise, although Berkshire would “considerably modify” a place if long-term financial prospects change.
He additionally settled a key query hanging over the management transition: he’ll immediately oversee the fairness portfolio. Ted Weschler will proceed to handle about 6% of the portfolio, together with investments beforehand overseen by Todd Combs, an funding supervisor and Geico CEO who left for JPMorgan just lately.
“At Berkshire, fairness investments are elementary to our capital allocation actions; duty in the end resides with me as CEO,” Abel wrote.
Lengthy-term dedication
Abel has been identified internally as a hands-on operator with a deep bench of subsidiary CEOs reporting to him. The Canadian govt, born in Edmonton, Alberta, has a 25-year tenure at Berkshire underneath his belt. Abel joined Berkshire in 2000 when the conglomerate purchased MidAmerican Vitality, the place he ultimately turned the CEO in 2008. Previous to that, Abel labored at CalEnergy the place he reworked the small geothermal agency right into a diversified power enterprise.
He underscored that he views the function as a long-term dedication as he intends to steward Berkshire for many years.
“Our homeowners’ time horizon extends past the tenure of any particular person CEO,” he wrote. “I cannot be your CEO for the following 60 years as easy arithmetic makes that – let’s assume – an formidable plan. Nonetheless, 20 years from now, when I’ll have only a fraction of the tenure that Warren had, my intention is that you just – or your descendants – will likely be proud that your organization is even stronger.”
He famous that Buffett stays actively engaged as chairman, coming into the workplace 5 days per week and persevering with to offer enter.
Abel additionally made clear that Berkshire is not going to undertake Wall Road’s typical cadence of quarterly earnings calls.
“We think about high quality, not frequency. If a major problem arises, you’ll hear from me, however it is not going to be by quarterly commentary, given our long-term horizon,” he wrote.