Berkshire Hathaway announced Thursday that it has resumed stock buybacks for the first time since 2024, and separately announced that new CEO Greg Abel has personally purchased $15 million worth of stock, the equivalent of his annual after-tax income.
Abel told CNBC he plans to continue using his entire paycheck to buy Berkshire stock every year.
The Omaha, Nebraska-based conglomerate said in a regulatory filing that it began repurchasing its Class A and Class B shares on Wednesday. According to its annual report released over the weekend, Berkshire’s stated policy allows the company to buy back its own stock at any time if the chief executive, in consultation with board chairman Warren Buffett, determines the buyback price is less than Berkshire’s intrinsic value.
“I definitely talked to Warren,” Abel said Thursday on CNBC’s “Squawk Box.” “So how I approached it was obviously looking at value, taking an intrinsic value perspective, (and) consulting with Warren on the value and timing of that.”
Abel said the company normally wouldn’t reveal when it would start stock buybacks. “We felt it was important to communicate this change in management to our shareholders, partners and owners,” he said.
Berkshire B shares, 1 year
Mr. Abel, 62, replaced Mr. Buffett, 95, in early January. Berkshire’s stock price has fallen 3% this year and is down 10% from its all-time high in May of last year. Shares came under pressure earlier this week after the company announced a nearly 30% drop in fourth-quarter operating profit, largely due to a decline in its insurance business.
Berkshire’s last stock buyback was in the second quarter of 2024, and since then some investors have called for Berkshire to do something with its $373.3 billion in cash.
Berkshire B shares rose 1% in early trading Thursday on the news.
Abel’s personal purchase
In a separate filing, Mr. Abel disclosed that he personally purchased $15 million worth of shares in the conglomerate. The deal increases Buffett’s personal stake in Berkshire at a time when some investors are questioning whether he has the skin to match his successor.
Mr. Buffett owns about 37.5% of Berkshire’s Class A stock and has no intention of selling the stock other than to donate it to charity. He previously said the conglomerate accounted for about 99.5% of his net worth.
“Absolute collaboration with shareholders, partners and owners is important,” Abel told CNBC. “I already own some stocks, but the goal was to continue to show alignment with them. … As CEO, I obviously believe in Berkshire with the transition from Warren. I inherited a company with great fundamentals.”
Before the deal, Mr. Abel, a longtime Berkshire executive who previously oversaw the company’s non-insurance businesses, owned $164.4 million worth of Berkshire stock, according to FactSet.
The CEO has promised to do this every year with his after-tax salary for as long as he leads Berkshire, which he said he hopes will be “20 years.”
Since taking office, Mr. Abel has emphasized the continuity of Mr. Buffett’s investment philosophy. He used his first annual shareholder letter over the weekend to reassure investors that the conglomerate’s culture of financial conservatism and disciplined investing will last “forever.”
Some investors were encouraged to learn that Mr. Abel would continue to run the company according to Mr. Buffett’s principles, but others were disappointed that he did not take bolder action. Wednesday’s announcement may reassure those investors.
CNBC’s Becky Quick asked Abel what Buffett and the board are saying about his salary reinvestment plan.
“They were both obviously very cooperative,” Abel said.
According to the CEO, “This is Berkshire.”
