Mr. Abel’s $25 million salary at Berkshire is in line with other CEOs in the S&P 500.

(This is the Warren Buffett Watch newsletter, news and analysis about Warren Buffett and Berkshire Hathaway. Sign up here to receive it in your inbox every Friday night.)

Berkshire Hathaway’s new CEO, Greg Abel, will earn an annual cash salary of $25 million in 2026, a 19% increase from the $21 million he received in 2024 as vice chairman of the company’s non-insurance operations. (Mr. Abel’s salary for 2025 has not yet been made public.)

Berkshire’s filing this week doesn’t mention any additional compensation for Mr. Abel, but the company said it never uses company stock to pay employees.

After crunching a bunch of proxy numbers from MyLogIQ, the Wall Street Journal reported that Abel’s salary “would be the highest earned by a chief executive running an S&P 500 company in a single year from 2010 to 2024.”

However, the real money for CEOs comes in the form of stock, stock options, and other non-cash compensation.

Including these, Mr. Abel still earns more than the median S&P 500 CEO of just over $16 million in 2024.

But the paper notes that “most of the top 100 highest-paid executives received more than $25 million, including stock and other non-cash compensation.”

Bill Stone, Glenview Trust’s chief information officer, told the paper that since Abel leads one of S&P’s 10 largest companies, “you would expect his compensation to be commensurate with a CEO at that level.”

Not unusual for a CEO of a large American company, Mr. Abel’s salary is a far cry from Mr. Buffett’s annual salary of $100,000 (plus an additional $300,000 or so in personal and home security services provided by Berkshire, and he typically repays half of his salary to cover personal expenses paid to the company).

But unlike Abel, Buffett is effectively the founder of today’s mega-conglomerate, and nearly all of his current net worth of about $150 billion was generated through decades of huge gains in Berkshire stock. (He has also given away $200 billion worth of stock now.)

He was able to afford a symbolically low salary for many years as the “billionaire next door.”

Mr. Abel currently owns approximately $171 million worth of Berkshire stock, according to the company’s 2025 annual meeting proxy statement.

That’s a “significant amount,” according to investor Jonathan Boyer, who recently told Yahoo Finance that Abel should “personally buy a very large amount of Berkshire stock and really put his money where his mouth is.”

At the 2017 annual meeting, Mr. Buffett suggested that his then-unknown successor CEO might be very wealthy, suggesting that “they may perhaps even want to set an example by trading for much less than their true market value.”

Alternatively, he thought he could “pay a very modest amount” in cash and give the company the option to increase the strike price each year to account for retained earnings, unlike a standard CEO option package with a fixed strike price. “Because someone would have to retain a ton of profits and argue that value actually increased because they withheld money from shareholders.”

(You can watch and/or read his entire response in “Highlights from CNBC’s Buffett Archive” below.)

Professor Randall Peterson of the London Business School focuses on organizational behavior.

He said that when founders leave or become less involved in the distinctive companies they founded, those companies “start doing more of what everyone else is doing.”

Abel’s high salary appears to be a step towards “normalcy”. But even if Berkshire eventually becomes indistinguishable from its peers, he thinks it will be a very long process that probably won’t accelerate until Buffett dies.

Although Mr. Abel already receives a large salary, Mr. Buffett told CNBC last May that Mr. Abel, who lives in Iowa, is not a “distorted person” and “lives a semblance of normality.”

Although Professor Peterson cannot predict Abel’s specific future, he points out that there are many examples of people who started out as “normal” but were unable to remain that way after years of experiencing great wealth.

Buffett’s previously unreleased May interview with CNBC will be featured in a two-hour special, “Warren Buffett: Life and Legacy,” next Tuesday, January 13th at 7pm ET.

Berkshire hathaway The stock rose slightly in Greg Abel’s first full week as CEO, but lagged the stock. S&P500 That’s about a 1 percentage point difference.

Year-to-date, including last Friday’s decline in BRK, the S&P has a lead of about 2.5 percentage points, regardless of whether the index pays dividends or not.

Last year, Buffett’s standard metric, the S&P with dividends, outperformed Berkshire’s A-shares by 7.0 percentage points.

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More than eight years ago, when it was still unknown who Berkshire Hathaway’s next CEO would be, Warren Buffett shared his thoughts on how much that person should be paid, given his famously low annual salary of $100,000 (plus personal protection services).

Andrew Ross Sorkin: Three years ago, you were asked at a conference how you thought your successor should be compensated.

You said it was a good question and would be addressed in your next annual letter.

We waited patiently. (laughs)

Can you tell me now how the company has been thinking, at least philosophically, about how to compensate their successors so that we don’t have to worry when paid consultants arrive on the scene?

Warren Buffett: There are actually several possibilities, but I don’t want to get into them.

But you might be, and I really hope that there are people, A) people who are already very rich, which they should be, if they’ve been working a long time and have that kind of ability, that’s very rich, and they’re not actually motivated by whether they have 10 or 100 times more money than they or their family needs.

And they may even want to set an example by trading at prices far below what they can actually call their true market value.

It may or may not happen, but I think it would be great if it did. But you can’t blame people for looking for market value.

And if they don’t choose to go in that direction, you’re probably going to pay them a very modest amount and then get an option that either goes up in value or has an exercise price that goes up every year, which very few people would do. Graham Holdings has done just that. The Washington Post Co. made a small profit, but we assume it has significant retained earnings each year, so it will increase even more.

Because why would someone keep a large amount of profits and claim that the value actually increased just because they withheld money from shareholders?

So it’s very easy to design it, and private companies actually design it that way. They just don’t want to do that in a public company. Because you can get more money in other ways.

But while they may have very substantial stock that they can exercise, they have to hold that stock for several years after retirement so that they can actually get the results over time that most shareholders would get, and they don’t get to pick their spots on when to exercise and sell large amounts of stock.

It’s not difficult to design. And it really depends on who you’re dealing with in terms of how much they actually care about money and whether they have more than they can spend.

Berkshire’s top U.S. and Japanese listed stocks by market capitalization, based on the latest closing prices.

Holdings are as of September 30, 2025, as reported in Berkshire Hathaway’s November 14, 2025 13F filing. However, the following cases are excluded.

A complete list of holdings and current market value is available on CNBC.com’s Berkshire Hathaway Portfolio Tracker.

If you have any questions or comments about the newsletter, please send them to alex.crippen@nbcuni.com. (Sorry, we do not forward questions or comments to Mr. Buffett himself.)

If you haven’t subscribed to this newsletter yet, you can sign up here.

I also highly recommend Buffett’s annual letter to shareholders. It’s collected here on Berkshire’s website.

— Alex Crippen, Warren Buffett Watch Editor