Shares of Berkshire Hathaway (BRK.A -0.52%) (BRK.B -0.77%) are falling on Monday. The company's stock lost 4.3% as of 11:45 a.m. ET today and as much as 6.8% earlier in the day. The leg down comes as the S&P 500 lost 0.5% and the Nasdaq Composite lost 0.7% on the day.
Warren Buffett, the legendary investor and chief of Berkshire Hathaway, asked the board to replace him as CEO at the company's annual shareholder meeting on Saturday.
Buffett is stepping down, but it's not a complete exit
After leading the company for 60 years, Buffett announced he will step down as CEO. His chosen successor, Greg Abel, will take over on Jan. 1, 2026. Although the announcement by the 94-year-old to step down wasn't entirely unexpected, its timing was.
Speaking to the company's shareholders, Buffett said, " Two of the directors, who are my children, Howie and Susie, know of what I'm going to talk about there. The rest of them, this will come as news to, but I think the time has arrived where Greg should become the chief executive officer of the company at year end."
On Sunday, the board voted unanimously to accept Abel as president and CEO while keeping Buffett on as executive chairman. This should help make the transition smoother, but the loss of Buffett as the chief executive sent shares lower on Monday.
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The transition comes at a delicate time
The good news for investors is that Buffett and Berkshire Hathaway's leadership have been planning for this for quite some time. Abel is a highly competent successor whom Buffett has mentored to take the reins.
Buffett is also sticking around to help Abel with any major acquisition decisions. With the recent chaos in the market, it's a delicate time. However, I think that despite losing Buffett as CEO, Berkshire is well positioned to weather the current storm and to take advantage of any major downturn.
