Warren Buffett is stepping down as chairman of Berkshire Hathaway, effective immediately, transitioning to chairman emeritus while remaining on the board of directors. The 96-year-old announced the move in a shareholder letter on Friday, closing out a leadership tenure that began in 1965 when he took over a struggling New England textiles mill at age 34.
His son, Howard Buffett, will assume the chairmanship under a succession plan the company has long maintained. Susan Decker continues as lead independent director. Greg Abel, who took over as CEO more than nine months ago, wrote that Howard will "guard" the culture and values Buffett built — qualities he said are "worth more than anything on our balance sheet."
"Father Time always wins," Buffett wrote. "He has, however, been generous with me. He has given me the opportunity to see Berkshire reach a point where I am more confident than ever about what lies ahead."
Berkshire Hathaway, now valued at approximately $1 trillion, posted $44.5 billion in operating earnings last year and employs nearly 400,000 people worldwide. Under Buffett's leadership, the conglomerate delivered a 19.7% compounded annual return to shareholders — roughly double the S&P 500's performance over the same period.
Buffett acknowledged physical limitations in previous communications, including a Thanksgiving letter last year in which he noted he read with "increasing difficulty" despite attending the office five days a week. He revealed in March he had broken his leg. In his latest letter, he joked: "Recently, I celebrated my 96th birthday with family and friends, including one of my great-grandchildren, who had just turned one. He's moving a bit faster than I am these days."
Berkshire shares have lagged this year, rising just 1% compared with more than 11% for the S&P 500. Rising oil prices and investor rotation toward higher-growth segments of the market have weighed on the stock. The leadership change raises the bar for Abel, who must continue deploying Berkshire's $365.5 billion cash reserve effectively.
Abel has stepped up share repurchases, with Berkshire buying back $4.5 billion of its own stock in the second quarter. In July, Buffett disclosed he was behind Berkshire's $10 billion private purchase of Alphabet shares in June, making Google's parent the company's third-largest equity holding behind Apple and American Express.
Buffett praised Abel in Friday's letter: "My expectations for him were sky high from the start, and he has exceeded them. The company is in excellent hands, and I look forward to remaining a shareholder alongside you."
Abel responded: "I look forward to continuing to work alongside Warren, with Howard serving as Chairman and Sue as Lead Independent Director, and I am grateful for that opportunity."
