Greg Abel just pulled back the curtain on his first big move as Berkshire Hathaway’s new CEO.
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Abel, who took over from Warren Buffett in January, shelled out roughly $225 million to repurchase 309 million of Berkshire’s Class A shares on Wednesday, March 4, the company’s proxy statement revealed on Friday.
That’s a notable shift in strategy for Berkshire, which didn’t buy back a single share during Buffett’s final six quarters in charge.
Berkshire — which owns scores of businesses such as Geico and Dairy Queen, and has huge stakes in listed companies including American Express and Coca-Cola — repurchased more than $20 billion of its stock in both 2020 and 2021.
But its buybacks fell sharply in 2022 and 2023, and dried up completely by the second half of 2024.
Abel said in his first televised interview on March 5 that after consulting with Buffett, he had restarted buybacks on March 4. Berkshire’s proxy statement only provides the company’s share count at the end of that day, meaning it may have continued repurchases since then.
Buffett has long said he would only repurchase Berkshire stock when it traded at a material discount to its intrinsic value, conservatively estimated. When he scrapped buybacks in mid-2024, it signaled that he no longer saw his own company’s shares as a bargain.
Berkshire has been a net seller of stocks for the past 13 quarters, and has made few significant acquisitions in recent years, as Buffett has struggled to find deals in a historically expensive market.
A key consequence of Berkshire keeping its powder dry has been its ballooning cash pile: it held a record $373 billion of cash, Treasury bills, and other liquid assets at the end of December.
Abel’s decision to resume buybacks, particularly with Buffett’s endorsement, signals that the pair see Berkshire’s shares as undervalued and are bullish on the company’s prospects under Abel’s leadership.
Berkshire’s shares are down about 9% from the all-time high they reached going into the company’s annual shareholder meeting last May.
They slumped after Buffett unexpectedly announced his plan to retire at the end of the year. They’re yet to recover, signaling investors are no longer placing a “Buffett premium” on the stock to reflect the unique value of having the legendary investor in charge.
Abel has taken another step to show his belief in Berkshire. He spent his entire after-tax salary of around $15 million on Berkshire stock on March 4 and pledged to do the same every year going forward as CEO.
Abel owned 249 Class A shares and 2,363 Class B shares on March 4, together worth $184 million at current prices. That’s still a tiny fraction of Buffett’s ownership: 196,317 Class A shares worth $144 billion, and just over 1,000 Class B shares worth about $550,000.
