Warren Buffett may be sending a message to his successor: Buy more Berkshire Hathaway shares

Abel, 60, has been identified in Berkshire Latest annual report As a potential successor to Buffett, 92. He heads up the company’s massive non-insurance operations and owns an estimated $80 million in Berkshire stock (tickers: BRK/A, BRK/B). He bought almost all of that stake last year in open market transactions.

Abel owns 173 Class A shares, based on a securities filing at beginning of October, having bought 168 of those shares at that time. Class A shares were down 0.3% Monday, at $460,000. Abel also owns less than $1 million in Class B shares.

While $80 million is a lot of value, it is not a huge part of Abel’s net worth, Barron estimates. He sold a 1% stake in Berkshire Hathaway Energy, the utility company he headed before taking on a broader role at Berkshire in 2018, and returned to the utility for $870 million in 2022, according to Berkshire filings.

Even after any taxes, he likely made at least $600 million. He is also well-paid as a CEO at Berkshire, where he earned about $75 million from 2018 through 2021.

Buffett’s letter, which flags that future CEOs are expected to own the stock, could mean more purchases by Abel this year and in the future. The company had no immediate comment on Buffett’s remarks, and an Appel spokesperson did not immediately respond to a request for comment.

Buffett sets the standard for stock ownership. His 15% stake in Berkshire is worth more than $100 billion. Written several years ago in Berkshire Owner’s Manual that he has “more than 98%” of his net worth in Berkshire stock.

This is not an excessive percentage, in Buffett’s view. He wrote that he and Vice Chairman Charlie Munger “feel quite comfortable with putting eggs in one basket because Berkshire itself has a truly extraordinary variety of businesses. In fact, we think Berkshire is close to being unique in the quality and diversity of businesses in which it owns Either a controlling interest or a significant minority interest.”

The other notable note in Buffett’s comment on CEO stock ownership in the letter is that future CEOs will buy Berkshire stock “with their own money.”

Berkshire is unusual among large corporations in not awarding equity compensation to CEOs, or anyone in the organization. Buffett sees every stock as valuable and hates giving away any stock to employees or using it as currency for acquisitions.

Buffett has joked that he would rather undergo colonoscopy preparation than issue Berkshire stock.

Berkshire managers get paid the old-fashioned way, in cash, and Berkshire always pays cash for the companies it buys. If Berkshire executives want to own shares, they have to buy them on the open market like everyone else.

Write to Andrew Bary at [email protected]