Berkshire Hathaway announced on Thursday that it has resumed repurchasing its own shares for the first time since 2024, marking a significant move for the Omaha-based conglomerate. The company disclosed in a regulatory filing that it began buying back its Class A and Class B shares on Wednesday, following its stated policy of repurchasing stock when the chief executive, after consulting with chairman Warren Buffett, believes the repurchase price is below Berkshire's intrinsic value, as outlined in its annual report released over the weekend [1].
New CEO Greg Abel also made headlines by purchasing $15 million worth of Berkshire stock, an amount equal to his after-tax annual salary. Abel told CNBC he intends to use his full salary to purchase Berkshire shares every year, emphasizing his commitment to shareholder alignment. Prior to this purchase, Abel owned $164.4 million worth of Berkshire stock, according to FactSet [1]. Abel stated, "Absolute alignment with our shareholders, our partners, our owners, is critical," and highlighted the importance of communicating these actions during the leadership transition [1].
Shares of Berkshire Hathaway have fallen 3% year-to-date and are down 10% from their record high last May. The stock experienced pressure earlier in the week after the company reported a near 30% decline in operating earnings for the fourth quarter, largely due to weakness in its insurance business. Following the announcement of the share repurchase and Abel's personal stock purchase, Berkshire B shares rose 1% in early trading Thursday [1].
The last share repurchase occurred in the second quarter of 2024, and investors have since been urging the company to deploy its substantial $373.3 billion cash hoard. Warren Buffett continues to own about 37.5% of Berkshire's Class A shares and has stated he has no intention of selling his stake aside from charitable giving, with the conglomerate representing roughly 99.5% of his net worth [1].
CONCLUSION
Berkshire Hathaway's resumption of share repurchases and CEO Greg Abel's $15 million personal stock purchase signal renewed confidence in the company's value and leadership alignment. The market responded positively, with Berkshire B shares rising 1% in early trading. Despite recent earnings weakness and share price declines, these actions may reassure investors about the company's direction and commitment to shareholder value.