Warren Buffett Announces Transition as CEO of Berkshire Hathaway, Leaving a Lasting Legacy

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source:  Reuters/Scott Morgan

Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, has announced his decision to step down from his role as chief executive by the end of 2025, during the company's 60th annual meeting on May 3. At 94 years old, Buffett will continue to serve as Chairman, while vice chair Greg Abel is set to take over the CEO position starting January 1, 2026.

Buffett's legacy is marked by his value investing philosophy, which he adopted upon taking control of Berkshire Hathaway in 1965. This approach emphasizes identifying and acquiring stocks that are undervalued relative to their intrinsic worth. Under his leadership, Berkshire Hathaway has achieved remarkable growth, with the company's per-share value compounding at an impressive rate of 19.9%. This performance has nearly doubled the average annual gain of the S&P 500, which stands at 10.4%. As a result, shareholders have seen a staggering 5,502,284% return since Buffett's takeover, compared to the S&P 500's 39,054% return during the same period.

To illustrate the magnitude of this success, an investment of 10,000inBerkshireHathawayin1965wouldnowbeworthapproximately1 billion. Today, Berkshire Hathaway ranks as the seventh-largest company in the S&P 500, boasting a market capitalization of around $1.1 trillion. Year-to-date, the company's shares have continued to outperform, rising over 13%, while the S&P 500 has experienced a decline of 4%.

Buffett is well-known for his strategic investments in major companies, with Coca-Cola and Apple being among his most lucrative holdings. Berkshire Hathaway acquired shares of Coca-Cola nearly 40 years ago and has maintained its position in the beverage giant. Buffett famously stated, "When we own outstanding businesses with outstanding managements, our favorite holding period is forever," reflecting his long-term investment philosophy.

In 2016, Buffett began investing in Apple, a decision that initially came with some reluctance due to his cautious stance on technology stocks. However, he was ultimately convinced by the strong customer loyalty that Apple commanded. This investment has proven to be one of his most successful, with Buffett acknowledging that Apple CEO Tim Cook has generated more wealth for Berkshire than he himself has.

Beyond his investment acumen, Buffett has also been a vocal advocate for tax reform. In a 2012 interview, he highlighted the disparity in tax rates between himself and his secretary, who paid a higher percentage of her income in taxes. Buffett has consistently argued that the wealthy should contribute their fair share, attributing the inequities in the tax system to legislative shortcomings rather than individual actions.

As Buffett prepares to transition from his role as CEO, his influence on the investment world and his commitment to ethical business practices will undoubtedly leave a lasting impact on Berkshire Hathaway and the broader financial landscape.