Warren Buffett shocks shareholders by announcing his intention to retire

Warren Buffett shocked an arena full of his shareholders on Saturday by announcing that he wants to retire at the end of the year.

Mr Buffett said he will recommend to Berkshire Hathaway’s board that Greg Abel should become chief executive at the end of the year.

“I think the time has arrived where Greg should become the chief executive officer of the company at year end,” Mr Buffett said.

Mr Abel has been Mr Buffett’s designated successor for years, and he already manages all of Berkshire’s noninsurance businesses.

But it was always assumed he would not take over until after Mr Buffett’s death. Previously, the 94-year-old Mr Buffett has always said he has no plans to retire.

Mr Buffett announced the news at the end of a five-hour question-and-answer period and didn’t take any questions on the topic.

He said the only board members who knew this was coming were his two children, Howard and Susie Buffett. Mr Abel, who was sitting next to Mr Buffett on stage, had no warning.

About an hour later, Mr Abel came out to oversee the formal Berkshire business meeting without Mr Buffett, and he addressed the announcement.

“I just want to say I couldn’t be more humbled and honoured to be part of Berkshire as we go forward,” Mr Abel said.

Many investors have said they believe Mr Abel will do a good job running Berkshire, but it remains to be seen how good he will be at investing Berkshire’s cash. Mr Buffett also endorsed him by pledging to keep his fortune invested in the company.

“I have no intention — zero — of selling one share of Berkshire Hathaway. I will give it away eventually,” Mr Buffett said. “The decision to keep every share is an economic decision because I think the prospects of Berkshire will be better under Greg’s management than mine.”

Thousands of investors in the Omaha arena gave Mr Buffett a prolonged standing ovation after his announcement in recognition of his 60 years leading the company.

CFRA research analyst Cathy Seifert said it had to be hard for Mr Buffett to reach this decision to step down.

“This was probably a very tough decision for him, but better to leave on your own terms.”