Berkshire’s Abel Vows to Use All His Pay to Buy Firm’s Stock

(Bloomberg) — Berkshire Hathaway Inc. Chief Executive Officer Greg Abel said he will use all of his take-home pay to acquire the conglomerate’s stock for as long as he’s in the role.

To that end, Abel bought up about $15.3 million of the shares this week, according to a regulatory filing. He said his commitment to continue doing so after the firm releases its annual results each year will add up to “hundreds of millions” of share repurchases over the course of his career.

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“Absolute alignment with our shareholders, our partners, our owners is critical,” Abel said in an interview with CNBC Thursday. “I already have some shares, but the goal was to continue to demonstrate alignment with them.”

Berkshire also restarted share buybacks on Wednesday, with Abel saying that came after executives had determined that the “intrinsic value” of those shares was above their market price. The move sent Berkshire’s stock climbing as much as 2.3% in New York Thursday after the announcement.

“The repurchase announcement is a welcome sign both in recognition of the value in the shares as well as the opportunity to deploy capital as the firm generates significant operating earnings in ’26 and continues to manage a unique cash pile of $370 billion,” said Macrae Sykes, portfolio manager of the Gabelli Financial Opportunities Fund.

Abel, who took the reins of the Omaha, Nebraska-based conglomerate earlier this year, has vowed to keep intact the principles and values that helped his legendary predecessor, Warren Buffett, turn a failing textile factory into a $1 trillion conglomerate. The newly minted CEO’s long-term pledge reinforces that perception.

“Greg Abel’s commitment to an annual personal investment I think will go along way towards forging the same type of strong bond that Buffett had with shareholders,” said Christopher Davis, founding partner of Hudson Value Partners. “Today’s interview confirmed that our investment in Berkshire shares is in very capable hands.”

Still, beyond investors’ short-term positive sentiment, a long-lasting growth in Berkshire’s share price relies on Abel’s ability to improve the firm’s underlying fundamentals, according to Cathy Seifert, an analyst at CFRA Research.

“Until we see that, this may be a pop, because the shares are not hideously undervalued,” Seifert said.

Berkshire’s shares had fallen earlier in the week after the company reported its fourth-quarter earnings on Saturday. The firm’s operating profit fell 30% in the period, driven by a 54% decline in its insurance-underwriting earnings.

Shareholders had been combing those results for signs of how Abel would approach share buybacks as the conglomerate had abstained from doing them for a sixth quarter in a row. Abel used his first annual letter to investors last week to reaffirm Berkshire’s shareholder-return policy, largely ruling out the possibility of a dividend.

“We will retain a dollar if we see the opportunity to create more than a dollar for our shareholders — and that’s been the test,” Abel said. “So if we didn’t meet that test, we’d do a dividend.”

The decision to start repurchasing shares won’t stop Berkshire from looking to deploy its massive cash pile on other opportunities, Abel said.

“There’s also ‘Do we acquire stock?’ And when we’re looking at companies, ‘Do we acquire whole companies also?’ And then there’s the ‘Do we acquire equities?’” Abel said. “Each of those, with the amount of capital we have, can be done independently. So when we’re purchasing our shares, it’s not taking away from any of the other decisions.”

(Updates with shares in fourth paragraph, comments starting in fifth.)

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