Over the weekend, the “Woodstock for Capitalists” that is the Berkshire Hathaway annual meeting went on as usual, with Warren Buffett sitting with the board of directors, rather than being the center of attention. It is somehow very comforting to see a successful CEO succession play out in such a public way. At this time last year, Liz noted how Warren Buffett had caught some off-guard with an announcement that he would recommend that the company’s board of directors consider appointing his replacement, Greg Abel, effective as of the end of 2025. Now, one year later, Abel ran the show, with Buffett looking on. A WSJ article notes:

Abel took a down-to-business approach with the meeting, a change that many shareholders saw coming with Buffett no longer on stage.

The new CEO opened the meeting with a detailed breakdown of Berkshire’s businesses that ran around a half-hour longer than expected. The new take to the meeting was a departure from Buffett and Munger’s more casual and folksy approach. There were more questions on the nuances of Berkshire’s operations, and fewer seeking wit and wisdom on matters farther afield. CHI Health Center, the meeting’s venue, wasn’t as full as it was at last year’s gathering.

Shareholders appeared more serious, too, probing Abel’s plans for how he would continue Buffett’s legacy and oversee Berkshire’s mammoth stock portfolio, and whether he had settled on his own successor yet. Buffett and Munger often fielded questions about everything from life to politics that had little to do with Berkshire’s business.

The legacy of Buffett and Munger was not forgotten – the article notes:

Abel paid several homages to Buffett throughout the Saturday meeting, acknowledging the former CEO’s role in shaping the company and its unusual business model. The shareholder event itself was branded “The Legacy Continues,” with promotional materials featuring illustrations of Buffett and Abel. Abel had a can of Cherry Coke and peanut brittle on stage, favorite treats of Buffett and Charlie Munger, who was vice chairman. Munger died in 2023.

Abel surprised Buffett and the crowd during his opening with a giant “Buffett” sports jersey that was raised to the rafters, with the number 60 emblazoned on it to mark his six-decade run. A jersey for Munger was raised alongside it.

Buffett’s and Munger’s jerseys featured the words “CEO” and “vice chairman,” with Munger’s featuring the number 45, for the number of years he spent at Berkshire.

“Both those jerseys will remain in the rafters for the years to come,” said Abel.

We can draw some great takeaways on CEO succession from this annual meeting. First, Abel needed to bring his own approach to the meeting, and even though the meeting may not have been as folksy or entertaining as when Buffett and Munger were running the show, the audience no doubt understood that was going to be the case and was more focused on Abel’s leadership and plans for the company. Abel was also wise to pay tribute to Buffett and Munger, in recognition that while the change in leadership was significant, the legacy of those two legends would continue at Berkshire Hathaway. It was also great for continuity purposes that Buffett could still be a part of the annual meeting as one of the members of the board of directors; however, by all accounts, he did not spend much time in the spotlight, no doubt recognizing that Abel needed some space to demonstrate his leadership.

It will be interesting to see if attendance at the Berkshire Hathaway annual meeting drops off significantly in the future without Buffett and Munger as the big draw. Given the significant number of very loyal shareholders, I expect that the annual meeting will never end up like the annual meetings of most of the clients that I work with, where the number of shareholders showing up is closer to zero.

– Dave Lynn