OMAHA, Neb. (AP) — Folk wisdom and jokes that have been a staple of the Berkshire Hathaway annual meeting for decades Warren Buffet The person leading the show will disappear on Saturday, but shareholders still started lining up outside the Nebraska arena at midnight to hear the new songs. CEO Greg Abel.
Attendance was down significantly this year, with the hall being just over half full as the meeting progressed. This is a far cry from the last few years, when more than 40,000 people attended to hear the 95-year-old Buffett. death in 2023Buffett’s longtime partner Charlie Munger was always part of the fun. Buffett gave up the CEO title in January but will remain chairman and sit with the rest of the Berkshire board to listen in on the meeting.
Saturday’s meeting kicked off with a video tribute to Buffett filled with clips from the previous 60 years of annual meetings. The first clip showed Buffett receiving a standing ovation after surprising shareholders last year by announcing he would resign.
Abel later announced that he would retire the jerseys with Buffett and Munger’s names that would hang from the rafters of the arena.
Buffett took the microphone briefly to praise Abel and recognize Apple CEO Tim Cook, who was in attendance. Buffett said Abel has done a great job so far and that Cook helped raise Berkshire’s initial $35 billion investment. Apple Today it has reached 185 billion dollars. In fact, Cook received a longer ovation than Buffett did when he was introduced.
“Greg does everything I do and then some,” Buffett said, so his decision to resign has worked out great so far.
Abel has been performing alongside the legendary investor at annual conventions for several years, but this year is the first time he’s running the show. Investors expect the conversation to focus more on the performance of the dozens of companies Berkshire owns. The group owns major insurance companies such as Geico, many major utilities such as Pacificorp, BNSF railroad, and various manufacturers, retail and service businesses.
Signs of the transition are visible in the 200,000-square-foot showroom where shareholders buy products from Berkshire companies. A caricature of Abel playing hockey, his favorite sport, is front and center on See’s Candy’s souvenir boxes, with Buffett and Mrs. See dressed in hockey gear in the background. At the Pilot Travel Center booth, pictures of Abel and Buffett are taped to the windshield of a semitrailer truck, but Abel is in the driver’s seat. And this year, Jazwares created a Squishmallow version of Abel, in keeping with Buffett and his longtime partner Charlie Munger’s latest versions as stuffed dolls that shareholders are lining up to buy.
“We unfortunately miss Warren and Charlie and that show, which was fun, but for most of us it’s a business meeting and it’s all about hearing about what businesses are doing,” said investor Chris Bloomstran, president of Semper Augustus Investments Group.
That’s how Abel opened the meeting with a detailed discussion of how Berkshire’s largest businesses were performing. He gave a detailed account of the performance of Berkshire’s insurance companies, railroads and utilities. He explained how Berkshire used artificial intelligence “To solve problems in our companies.” But he has repeatedly emphasized that Berkshire’s fundamental approach will not change and that he will not feel pressured to prematurely spend the company’s nearly $400 billion in cash.
“One of our greatest strengths at Berkshire is patience and discipline in allocating our capital,” Abel said. “We’re not worried about directing capital to subpar opportunities.”
But many people also travel to Omaha primarily to meet with like-minded value investors who follow the approach Buffett takes and to attend some of the investment conferences and meetings planned around Berkshire’s shareholder meeting.
“That’s why I’m here, I’m really here to network with other people,” said Bob Robotti, who runs his own investment firm. He doesn’t expect any surprises from Abel and other Berkshire executives at the meeting. “They shouldn’t say anything that would be shocking or surprising because they’re consistent with what they’re doing.”
Many investors are keeping a close eye on the changes Abel might make, but there’s little reason to expect anything big. After all, Abel had been at Berkshire for more than 25 years and had been running all of the conglomerate’s non-insurance businesses for almost eight years when he was promoted.
Abel has made several executive changes to build a team to help support him, but he has vowed to maintain Berkshire’s culture, which allows the CEOs of all its businesses to largely run day-to-day operations while advising headquarters on major investments and sending extra cash to Omaha.
The CEOs of Dairy Queen, See’s Candy, Jazwares and Brooks Running said little has changed since Abel’s promotion, except that they report to NetJets CEO Adam Johnson, who oversees 32 retail and service businesses.
“I think this is a deeply rooted culture that Warren has created, and I believe the transition to Greg will be based on the values that Warren has established and will continue over 60 years,” Brooks CEO Dan Sheridan said.
For years, Buffett had said he had too much fun running Berkshire to retire, but after the shock of his announcement in the final minutes of last year’s meeting wore off, company executives quickly agreed that this transition plan was better so that Buffett could still be around to advise Abel.
“Berkshire is stronger today than ever before, and Warren is still a part of that,” DQ CEO Troy Bader said as his staff sold Dilly Bars to shareholders. “Warren is still available. So being able to have a leadership transition where Greg and Warren can still work together is the best combination right now.”
Abel is known as a more demanding and hands-on boss than Buffett ever was, but he does so by pushing Berkshire’s CEOs to leverage their competitive advantage while taking care of their customers. Abel asks tough questions and offers advice their CEOs will appreciate, but he doesn’t tell them exactly what to do.
With Buffett remaining Berkshire’s chairman and largest shareholder, Abel is unlikely to make any significant changes. So shareholders shouldn’t wait for Berkshire to start paying dividends or for Abel to suddenly split the company. Instead, Abel will continue to build on the foundation Buffett has built over 60 years.
Robotti said business performance at Berkshire should be much more important to shareholders than the entertainment value of annual meetings.
“My hope and expectation is that they choose people who are competent to run a business, not people who are public speakers and presenters,” Robotti said.
Berkshire said Saturday morning that its profits more than doubled in the first quarter to $10.1 billion, or $7,027 per Class A share, as the value of its investments rose and many of its businesses improved.
The paper value of Berkshire’s investments has always had a significant impact on profitability, and it generated $5.8 billion in gains from the stocks it sold. The value of the portfolio rose to just over $288 billion.
Berkshire’s massive cash pile continues to grow, reaching $397.4 billion at the end of the first quarter.
Many of Berkshire’s diverse businesses reported better operating profits this year. The insurance unit, which includes Geico and several other companies, reported underwriting profits of $1.7 billion, down from $1.34 billion last year. Profits for BNSF railroad and Berkshire’s utilities and manufacturing companies also rose slightly.
But Abel acknowledged that more improvements are needed, especially at BNSF.
“We see a lot of opportunity here to continue to get better,” Abel said of the railroad.
