Berkshire resumes buybacks! The new CEO backs it with $15 million of his own money, pledging to continue increasing holdings for the next 20 years.

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Greg Abel, the new CEO of Berkshire Hathaway succeeding Warren Buffett, responded to market concerns about his leadership with a series of concrete actions: the company announced the resumption of share buybacks, Abel himself simultaneously disclosed spending about $15.3 million of his own money to purchase company shares, and pledged to use his entire after-tax salary each year during his tenure to increase his Berkshire holdings.

After these measures were announced before the market opened on Thursday, Berkshire’s Class B shares opened higher and trended upward throughout the day, rising nearly 2.7% at their midday peak. This is Berkshire’s first share buyback announcement since the second quarter of 2024; previously, the company had gone six consecutive quarters without any buybacks, during which its cash reserves soared to about $373 billion. Some investors expressed dissatisfaction with the lack of capital deployment.

In an interview with the media, Abel said the buyback decision was made after assessing intrinsic value, and he had communicated with Buffett, who remains chairman of the Berkshire board. He also revealed that the proactive disclosure of the buyback launch was meant to ensure adequate communication with shareholders during the leadership transition period.

Abel’s personal share purchase is on par with his annual after-tax salary. He stated he would stick to this commitment every year during his tenure as CEO, with the total personal share acquisition potentially reaching "several hundred million dollars." He also said he hopes his CEO tenure will last "twenty years."

Buyback Resumption: Value Judgment and Capital Signal

According to documents Berkshire submitted to regulators, the company began repurchasing both Class A and Class B shares Wednesday. Under company policy, the CEO, after consulting with the board chairman, may authorize a repurchase if the price is believed to be below intrinsic value.

Current Berkshire CEO Abel said the repurchase was advanced after judging intrinsic value. "I absolutely communicated with Warren," he said. "My approach is to evaluate value, form a judgment on intrinsic value, and then discuss the value and timing with Warren."

Macrae Sykes, portfolio manager at Gabelli Financial Opportunities Fund, commented: "The buyback announcement is a positive signal, recognizing stock value and indicating the company intends to deploy capital against the backdrop of continued strong operational earnings anticipated in 2026."

Abel emphasized that starting buybacks does not mean the company will abandon other capital allocation opportunities. "Buying back shares, acquiring entire businesses, and investing in equity assets are all decisions that can be advanced independently—buybacks won't crowd out capital for other directions."

Abel’s Personal Purchase: Strengthening Alignment with Shareholders’ Interests

On a personal level, Abel disclosed buying about $15.3 million of Berkshire shares this week, an amount on par with his after-tax annual salary. Before this purchase, according to FactSet data, Abel already held approximately $164.4 million of Berkshire stock.

Abel said the move was meant to align his interests with shareholders. "It’s critical to be absolutely aligned with our shareholders, partners, and owners," he said. "As CEO, I have absolute confidence in Berkshire—I’ve taken over a company with an outstanding foundation."

He further disclosed that Buffett and the board support his salary reinvestment plan, describing it as "so Berkshire."

Christopher Davis, Founding Partner of Hudson Value Partners, said, "Greg Abel’s commitment to personal investment every year will, I believe, go a long way toward building trust with shareholders as deep as Buffett’s. Today’s interview reassures us that Berkshire’s investments are in very capable hands."

Market Divergence: Hidden Concerns Beyond a Short-term Boost

Although the market responded positively to these measures, some analysts remain cautious about whether the stock price can sustain its upward trajectory.

CFRA Research analyst Cathy Seifert noted that Berkshire’s long-term share price growth ultimately depends on whether Abel can improve the company’s fundamentals. "Until we see that, this could just be a short-lived rebound because the stock isn’t hugely undervalued," she said.

Earlier this week, Berkshire’s share price came under pressure after the company reported fourth-quarter operating profits down about 30% year-over-year, with insurance underwriting profits plunging 54%. Year-to-date, Berkshire shares have fallen about 3% and are down roughly 10% from the record high set in May last year.

Abel officially succeeded the 95-year-old Buffett as CEO in January this year. In his first annual letter to shareholders released last weekend, he stressed that Berkshire’s culture of financial conservatism and disciplined investment principles would remain "perpetual," and he essentially ruled out the possibility of paying dividends.

Abel said Thursday: "If we think we can create more than $1 of value for shareholders, we’ll retain that $1—that’s our test."

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