Berkshire Hathaway Resumes Share Buybacks and CEO Greg Abel Invests $15 Million of His Salary

Berkshire Hathaway announced on Thursday that it has recommenced repurchasing its own shares, marking the first such action since the second quarter of 2024. Concurrently, new CEO Greg Abel personally acquired $15 million worth of Berkshire stock, an amount equivalent to his after-tax annual salary. Abel communicated to CNBC that he intends to continue investing his entire salary in Berkshire shares each year.

The Omaha, Nebraska-based conglomerate, in a regulatory filing, revealed that the buying of its Class A and Class B shares commenced on Wednesday. Berkshire’s established policy permits share repurchases when the chief executive, in consultation with Chairman Warren Buffett, determines that the repurchase price is below Berkshire’s intrinsic value, as outlined in the company’s annual report released over the weekend.

Abel stated in an interview with CNBC’s "Squawk Box" on Thursday, "I absolutely talked to Warren. So how I approached it was, obviously looking at the value, having a view of intrinsic value [and then] consulted with Warren relative to the value and the timing." He explained that while the company typically does not disclose the initiation of buyback programs, "We felt it was important to communicate to our shareholders, our partners, our owners, with the transition of leadership."

Berkshire B shares experienced a 1% increase in early trading on Thursday following this news. The company’s shares have seen a 3% decline year-to-date and a 10% drop from their record high in May of the previous year. Earlier in the week, Berkshire’s stock faced pressure after the company reported a nearly 30% decrease in its operating earnings for the fourth quarter, largely attributed to a slowdown in its insurance operations.

The last time Berkshire engaged in share repurchases was during the second quarter of 2024. Since then, some investors have expressed a desire for the company to deploy its substantial cash reserves, which stood at $373.3 billion.

Abel’s Personal Investment

In a separate filing, Greg Abel disclosed his personal investment of $15 million in Berkshire Hathaway stock. This transaction strengthens his personal stake in the conglomerate at a time when some investors have scrutinized whether Buffett’s successor possesses comparable "skin in the game." Warren Buffett, who holds approximately 37.5% of Berkshire’s Class A shares, has indicated no intention of selling his stake, aside from his philanthropic endeavors. He has previously stated that Berkshire Hathaway represents roughly 99.5% of his net worth.

Abel emphasized to CNBC the critical importance of "Absolute alignment with our shareholders, our partners, our owners." He added, "I already have some shares, but the goal was to continue to demonstrate alignment with them. … As the CEO, I absolutely, obviously, believe in Berkshire, with the transition from Warren, and I inherited a company that has an incredible foundation."

Prior to this recent purchase, Abel, a long-serving Berkshire executive who previously managed the company’s non-insurance divisions, owned $164.4 million worth of Berkshire stock, according to data from FactSet. The CEO expressed his commitment to reinvesting his after-tax salary into Berkshire shares annually for the duration of his leadership, a tenure he hopes will extend for "20 years."

Since assuming leadership, Abel has underscored his dedication to maintaining Warren Buffett’s investment philosophy. In his inaugural annual shareholder letter, released over the weekend, he aimed to reassure investors that the conglomerate’s established culture of financial prudence and disciplined investing would persist "into perpetuity." While some investors found comfort in Abel’s commitment to Buffett’s principles, others had hoped for more decisive actions early in his tenure. The announcements made on Wednesday may serve to address these concerns.

When asked by CNBC’s Becky Quick about the reactions of Warren Buffett and the board to his salary reinvestment plan, Abel stated, "Both were obviously very supportive." He relayed that they commented, "This is so Berkshire," indicating their approval and recognition of the action as consistent with the company’s ethos.