For the first time in nearly two years, Berkshire Hathaway is buying back its own stock. And its new CEO just put his entire salary where his mouth is.
Greg Abel, who took the reins from Warren Buffett at the start of January, announced Thursday that the conglomerate has “recommenced” share repurchases — and that he personally bought $15 million in Berkshire stock, an amount equal to his entire after-tax annual salary. He told CNBC he plans to do this every single year for as long as he runs the company, which he hopes is “20 years.”
This isn’t just a feel-good corporate gesture. It’s a signal. The 62-year-old CEO consulted directly with Buffett on the timing and valuation before pulling the trigger. Berkshire’s stated repurchase policy only allows buybacks when the CEO believes shares are trading below intrinsic value. So when the company that famously sat on $373 billion in cash suddenly decides its own stock is a good deal, you pay attention.
The timing is notable. Berkshire shares have dropped roughly 10% from their record high last May and slipped 3% year-to-date. A near 30% decline in Q4 operating earnings — mostly from insurance weakness — spooked some investors. The $373 billion cash pile has frustrated others who’ve been begging for capital deployment. Abel’s move addresses both concerns in one shot.
Before this purchase, Abel already held $164 million worth of Berkshire stock. But in the post-Buffett era, the “skin in the game” question has loomed large. Buffett himself owns 37.5% of Berkshire’s Class A shares — roughly 99.5% of his entire net worth. Abel can’t match that concentration, but committing every dollar of his salary annually sends an unmistakable message.
Here’s what makes this actionable for investors: Berkshire’s buyback history has been an excellent buy signal. The last time the company aggressively repurchased shares was 2020-2021, right before a 40%+ run. If Abel — with Buffett’s blessing — thinks these shares are undervalued today, the Oracle of Omaha’s stamp of approval on that view carries serious weight. BRK.B is trading around $500, and the smart money just told you what they think it’s worth.