Berkshire Hathaway CEO Greg Abel to Invest Entire Compensation in Company Shares

Berkshire Hathaway Inc. Share Buyback Update

Key Highlights

• Berkshire Hathaway Inc. CEO Greg Abel has committed to allocating his entire take-home pay to acquire the company's stock for as long as he's in the role.
• Abel has purchased approximately $15.3 million worth of shares this week, as per a regulatory filing.
• The company has resumed share buybacks, with Abel stating that executives believe the shares' intrinsic value is higher than their current market price.

Share Buyback Program

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Berkshire Hathaway Inc. has resumed share buybacks, with CEO Greg Abel committing to ongoing share purchases after the company's annual results are released each year. This move follows the company's decision to abstain from share buybacks for a sixth consecutive quarter.

Financial Impact

The company's shares rose by as much as 2% in early trading in New York on Thursday, following the announcement. The shares had dropped earlier in the week following the release of the company's fourth-quarter earnings, which showed a 30% drop in operating profit and a 54% decrease in insurance underwriting earnings.

Cash Reserve

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Berkshire Hathaway Inc. has a substantial $373 billion cash reserve, which will not be impacted by the company's share buyback program. CEO Abel stated that the company will retain the option to invest in other opportunities, including acquiring whole companies or equities.

Shareholder Return Policy

Berkshire Hathaway Inc. has reaffirmed its shareholder return policy, with CEO Abel stating that the company will retain a dollar if it sees an opportunity to create more than a dollar for its shareholders. This policy largely rules out the possibility of a dividend, unless the company fails to meet its shareholder return test.