Buffett plans to keep Class A shares until successor wins over investors

Berkshire Hathaway's Warren Buffett wrote that he will keep a “significant amount” of the company’s Class A stock until his fellow shareholders grow comfortable with his successor as CEO, Greg Abel.

- Krystal Hur [e-mail]

In his letter on Monday, Warren Buffett reiterated his faith in Greg Abel, his successor as CEO of Berkshire Hathaway.

(AP)

“That level of confidence shouldn't take long,” Buffett wrote Monday in a letter to shareholders and his three children. “My children are already 100% behind Greg as are the Berkshire directors.”

Buffett, 95 years old, surprised the investing world at Berkshire’s annual shareholder meeting in May when he announced that Abel would take over as chief executive officer at year's end. Berkshire has said Buffett would remain chairman. The company’s shares have since slumped, with some attributing the declines to a shrinking “Buffett premium’—the higher price investors are willing to pay to own Berkshire’s stock, thanks to the chairman's presence.

In Monday's letter, Buffett reiterated his faith in Abel. "He isa great manager, a tireless worker and an honest communicator,” he wrote. “Wish him an extended tenure.”

The succession plan will also bring changes to longstanding traditions for Berkshire followers. Abel will take overwriting the annual letter to shareholders, Buffett's assistant confirmed recently to The Wall Street Journal. And starting next year, Abel will lead Berkshire’s annual meetings while Buffett sits with the company’s other directors.