Berkshire Hathaway has resumed buying back its own shares for the first time since 2024. Separately, new CEO Greg Abel purchased $15 million worth of Berkshire stock from his own pocket, an amount equal to his full after-tax annual salary. Abel told CNBC he plans to do the same every year for as long as he leads the company, which he hopes will be 20 years.
The Buyback Decision
Berkshire disclosed in a regulatory filing that it began repurchasing both Class A and Class B shares on Wednesday. Under the company’s stated policy, buybacks can occur whenever the CEO believes the repurchase price is below Berkshire’s intrinsic value, following consultation with chairman Warren Buffett.
Abel confirmed he spoke directly with Buffett before proceeding. He also said the company felt it was important to communicate the decision publicly given the leadership transition, noting that ordinarily Berkshire would not disclose the start of repurchases.
Why Now
Berkshire shares have fallen 3% so far this year and are down 10% from their record high last May. The stock came under pressure earlier this week after the company reported a near 30% decline in operating earnings for the fourth quarter, largely due to weakness in the insurance business. The company’s cash pile stands at $373.3 billion, and some investors have been pushing for that capital to be deployed in some form.
Abel’s Personal Investment
Abel’s $15 million personal stock purchase is designed to signal alignment with shareholders at a time when some investors have questioned whether Buffett’s successor has comparable skin in the game. Before this latest purchase, Abel already held approximately $164.4 million worth of Berkshire stock. He told CNBC that absolute alignment with shareholders is critical and that he believes deeply in the company’s foundation. When asked what Buffett and the board said about his salary reinvestment plan, Abel said they responded: “This is so Berkshire.”
Berkshire’s B shares rose 1% in early trading Thursday following the announcements.
Why This Matters to You
Berkshire Hathaway is one of the most widely held companies in the world. If you own index funds, have a pension or invest in US equities, there is a good chance Berkshire’s performance affects your portfolio. The resumption of buybacks is generally seen as a positive signal, suggesting leadership believes the stock is undervalued.
For everyday investors, Abel putting his entire after-tax salary into Berkshire stock every year is also a meaningful gesture. It signals he is not just talking about long-term commitment. He is backing it with his own money. It is worth thinking about: Does Abel’s decision to match Buffett’s investment philosophy signal genuine continuity, or will investors eventually demand bolder moves from the new CEO? With $373 billion in cash still sitting on the sidelines, how long before the market expects a major acquisition? And with Buffett still actively engaged as chairman, how much of the decision-making is truly Abel’s own?
