Berkshire Resumes Buybacks, CEO Buys In
Berkshire Hathaway has resumed share repurchases for the first time since 2024. In a further sign of confidence, new CEO Greg Abel also bought $15 million worth of shares — his entire after-tax annual salary. The moves come amid market volatility and recent underperformance in the company's insurance sector.
The resumption of share buybacks marks a significant move under new CEO Greg Abel, representing the first such action since the second quarter of 2024. This nearly two-year hiatus was preceded by a 24-quarter streak of repurchases that began in mid-2018. The company spent over $24 billion on buybacks in both 2020 and 2021. This decision comes as Berkshire Hathaway sits on a massive cash pile, which reached approximately $373.3 billion by the end of 2025. The growing cash reserve has been a point of focus for investors, as the company has found it challenging to identify attractively priced acquisition targets. The buyback allows Berkshire to deploy some of this "dry powder" into what it considers an undervalued asset: its own stock. The buyback announcement coincided with a period of underperformance for Berkshire's stock, which has lagged the S&P 500. This underperformance has been attributed to several factors, including concerns about the leadership transition from Warren Buffett to Greg Abel and the company's value-investing approach in a market often led by growth stocks. Berkshire's extensive insurance operations, a core part of the business, have also faced headwinds. The fourth-quarter operating profit saw a significant drop, largely due to weaker results in the insurance sector. This was influenced by increased competition in the property and casualty insurance market. In a move to signal alignment with shareholders, CEO Greg Abel invested his entire $15 million after-tax annual salary into Berkshire stock. Abel has stated his intention to continue this practice annually as long as he is CEO. This personal investment, coupled with the corporate buyback, was made after consultation with Warren Buffett, who remains chairman. While the exact amount of the current share repurchase has not been disclosed, the company has indicated it will be revealed in its next quarterly report. Abel noted that the public announcement of the buyback's resumption was a one-time event, done in the interest of transparency during the leadership transition. The market reacted positively to the news, with Berkshire's Class A shares gaining over 2% on the day of the announcement.
