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Buffett plans to remain big Berkshire shareholder

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Buffett says Berkshire's size takes its toll

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Stock price has lagged since Buffett set departure

By Jonathan Stempel

Nov 10 (Reuters) -

Warren Buffett on Monday assured shareholders of Berkshire

Hathaway ( BRK/A ) they need not worry about his upcoming

departure as chief executive, giving a full-throated endorsement

to his successor Greg Abel and promising to remain a major

stockholder in the conglomerate.

In a letter to Berkshire shareholders, possibly his last

public communication with them until he steps down at year end,

Buffett, 95, said Abel has "more than met" his high expectations

when he first thought the 63-year-old was CEO material.

"I can't think of a CEO, a management consultant, an

academic, a member of government - you name it - that I would

select over Greg to handle your savings and mine," wrote

Buffett, who will remain Berkshire's chairman.

Buffett also said he will speed up his charitable donations

to family foundations led by his daughter Susie, 72, and sons

Howard, 70, and Peter, 67, but that this "in no way reflects any

change in my views about Berkshire's prospects."

Referring to longtime second-in-command Charlie Munger, who died

in 2023, Buffett said he wants to keep a significant number of

Class A shares "until Berkshire shareholders develop the comfort

with Greg that Charlie and I long enjoyed."

Buffett also donated more than $1.3 billion of Berkshire

stock, the equivalent of 1,800 Class A shares, to four family

foundations led by his children.

He has donated more than half his Berkshire shares since 2006,

but still owns close to 14% of its stock and according to Forbes

magazine was worth $149 billion as of Friday. Buffett has led

his Omaha, Nebraska-based conglomerate since 1965.

BUFFETT CONFIDENT IN BERKSHIRE EVEN AS PREMIUM ERODES

Through Friday, Berkshire's share price had fallen 8% since

Buffett announced on May 3 he would step down, trailing the

Standard & Poor's 500 by 26 percentage points.

Investors have said that underperformance eroded much of the

"Buffett premium" embedded in Berkshire's stock because of the

presence of arguably the world's most revered investor.

Abel has been a Berkshire vice chairman overseeing

non-insurance operations since 2018.

He was publicly designated Buffett's expected successor in 2021,

and has taken on many of the billionaire's responsibilities,

which include allocating capital.

"To my surprise, I generally feel good," Buffett said in his

letter. "Though I move slowly and read with increasing

difficulty, I am at the office five days a week where I work

with wonderful people."

Buffett said Berkshire's nearly 200 businesses collectively

have "moderately better-than-average prospects," though

investors should not expect the $1.08 trillion conglomerate to

trounce the market as it often did when Berkshire was smaller.

"Our size takes its toll," Buffett said. "Because of

Berkshire's size and because of market levels, ideas are few -

but not zero."

CHILDREN TO OVERSEE BUFFETT'S REMAINING FORTUNE

Buffett's charitable giving has included more than $47

billion to the Gates Foundation.

Those donations will stop when Buffett dies. His children

will oversee a charitable trust that will contain nearly all of

his remaining wealth, and have about a decade to give it away.

Successor trustees have been named if they cannot serve.

Berkshire-owned businesses include Geico car insurance, the

BNSF railroad, an array of energy and industrial businesses, and

familiar retail brands such as Dairy Queen, Fruit of the Loom

and See's candies.

The conglomerate also ended September with $283.2 billion of

stocks including Apple ( AAPL ) and American Express ( AXP ),

and $381.7 billion of cash.