In a moment that marks the end of an era on Wall Street, Warren Buffett has announced he will step down as CEO of Berkshire Hathaway (NYSE: BRK.B) this year.
Buffett, who turns 95 later this year, made the surprise declaration during Berkshire's annual shareholder meeting in Omaha — sending ripples across the investing world.
According to CNBC, Buffett wants his long-time heir apparent, Greg Abel, to fill his boots when he finishes up. He said:
I think the time has arrived where Greg should become the chief executive officer of the company at year end.
An incredible legacy
Warren Buffett is not just the CEO of Berkshire Hathaway — he's a symbol of long-term investing discipline, rational thinking, and business acumen.
From humble beginnings buying failing textile company Berkshire in the 1960s, Buffett built it into a US$1.16 trillion conglomerate with interests in insurance, railroads, energy, consumer goods, and more.
Under his leadership, Berkshire has acquired or invested in companies like Geico, Coca-Cola (NYSE: KO), American Express (NYSE: AXP), Bank of America (NYSE: BAC), and Apple (NASDAQ: AAPL) — delivering decades of market-beating returns and earning Buffett the nickname The Oracle of Omaha.
Greg Abel to take the reins
While Buffett's retirement has long been anticipated, the timing caught everyone by surprise. Even CEO-elect Greg Abel.
Abel has been managing Berkshire's non-insurance operations for several years and is widely respected within the company. Analysts have stated in the past that they believe he will bring a more hands-on style of management.
Can Berkshire thrive without Buffett?
There's no denying that Warren Buffett leaves enormous shoes to fill. His investment decisions have shaped not only Berkshire Hathaway, but generations of investors.
But he believes that the business will be even better under Abel's leadership. Buffett quipped:
I have no intention — zero — of selling one share of Berkshire Hathaway. It will get given away. The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg's management than mine.
Foolish takeaway
Warren Buffett stepping down is the kind of moment that makes investors pause and reflect.
It brings to an end a remarkable 60-year run — one that took Berkshire from a struggling business into a symbol of enduring quality. And while no one can truly replace the Oracle of Omaha, his hand-picked successor steps into the role with a wealth of experience, the trust of management, and a company built to last.
