Berkshire Hathaway Inc. Chief Executive Officer Greg Abel vowed to keep Warren Buffett’s guiding principles intact and sought to reassure investors that the company would outlast the legendary executive.
Abel began his inaugural letter to shareholders, published on Saturday as part of the company’s annual report, with a tribute to Buffett, the billionaire investor wh
o ran the company for more than six decades with a focus on seeking out value and investing over the long term.
“Warren is obviously a very hard act to follow,” Abel, 63, wrote.
He called Buffett “arguably the greatest investor of all time,” but said his mentor notched an equally impressive achievement in building Berkshire into a lasting en
terprise, along with longtime business partner Charlie Munger. The CEO promised the firm’s core values — capital discipline, integrity and investing for the long run — will remain unchanged.
“Twenty years from now, when I will have just a fraction of the tenure that Warren had, my intention is that you – or your descendants – will be proud that your company is even stronger,” Abel wrote.
Abel reaffirmed Berksh
ire’s shareholder returns policy, saying the firm will buy back its own shares when he believes, after consulting Buffett, that they trade below their intrinsic value.
He also said the firm will abstain from paying a dividend as long as “more than one dollar o
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f market value for shareholders is reasonably likely to be created by each dollar of retained earnings,” and that it will not retreat from investing.
‘Cult of Personality’
The letter was an otherwise straightforward review of the company’s operations, as Abel sought to strike a balance between finding his own voice while staying true to the company’s ethos.
“Abel is trying to overcome the cult of personality that often prevents investment firms from surviving a leadership transition,” said Christopher Davis of Hudson Value Partners.
Abel also said he doesn’t plan to change how the firm communicates with investors. Berk
shire, the only public company of its size without an investor-relations function, doesn’t hold any investor-oriented events other than its annual meeting.
“We concentrate on quality, not frequency,” Abel wrote. “If a significant issue arises, you will hear from me, but it will not be through quarterly commentary, given our long-term horizon.”
For Buffett fans, Abel’s first letter to shareholders marks the end of an era. The billionaire’s pearls of wisdom, aphorisms and life advice have turned the trove of letters into a must-read archive.
