Berkshire Hathaway's CEO Now Has to Consult Howard Buffett Before Buying Back Stock

Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB) announced Friday that Warren Buffett has been named chairman emeritus, effective immediately. His son, Howard Buffett, a Berkshire director since 1993, is the conglomerate's new chairman.

Warren Buffett isn't leaving the company. He remains a member of the board.

Of course, it's still a milestone. Buffett had been Berkshire's chairman for 56 years, a run dating to 1970.

The announcement also lands about eight months after the bigger handoff. Greg Abel took over as CEO in January, and with that job came the final say over about $365 billion in cash and Treasury bills.

Does the new chairman change what Berkshire does with all that money? Not much, in my view. But one line in the company's buyback policy now points at a different Buffett.

Image source: The Motley Fool.

A chairman for the culture

Buffett described the division of labor himself. "Greg runs the company; Howard will guard its culture and values -- both worth more than anything on our balance sheet," he wrote in a letter to shareholders released Friday.

The job, in other words, is continuity. After all, Howard Buffett has spent 33 years on Berkshire's board, and his role is to keep the company his father built operating the way it always has.

As for Warren Buffett, the emeritus title recognizes his contributions, and the company said he will keep offering his judgment and perspective.

Who controls the $365 billion?

Berkshire's cash was never the chairman's to spend, and deciding what to do with it belongs to the CEO. Abel spelled that out in his first annual letter to shareholders in February: Capital-allocation decisions, including the equity portfolio the company runs as an extension of its insurance business, ultimately rest with him.

The same letter restated the policies that govern the money. Berkshire will buy back its own stock when it trades for less than the company conservatively estimates it is worth.

And it won't pay a dividend so long as each dollar retained is reasonably likely to create more than a dollar of market value for shareholders. That policy gets a fresh look from the board once a year, and a board chaired by a different Buffett could, in theory, land somewhere new. I don't expect that.

Nothing in Friday's announcement touches any of this. And the businesses keep handing Abel more money to allocate. Second-quarter operating earnings grew 16% year over year, reaching about $13 billion, though currency moves on Berkshire's overseas debt flattered the comparison. Operating earnings set aside the investment gains and losses that generally accepted accounting principles (GAAP) count in reported profit.

The buyback policy has a new name in it

The chairman does appear in one capital decision. Berkshire's repurchase program allows buybacks whenever the CEO concludes, after consulting with the chairman of the board, that the stock is selling for less than a cautious estimate of its value. The wording dates to a 2025 amendment. Before it, the authority belonged to one person who held both jobs.

Until Friday, Abel's consultation partner was Warren Buffett. Now it's Howard.

And buybacks have been picking up. After a 2025 with no share repurchases at all, Berkshire bought back about $235 million of stock in the first quarter of 2026, then about $4.5 billion in the second. The buying accelerated as the quarter went on -- nothing in April, nearly $750 million in May, and almost $3.8 billion in June, at average prices of about $476 and $488 per Class B share. In other words, as recently as June, management judged the stock to be worth more than it cost.

As of this writing, the B shares trade around $509. That is a little above what Berkshire was paying in June, and it puts the stock's valuation at nearly 1.5 times book value. It isn't a bargain price. But the company itself was buying at prices not far below today's, and the stock arguably remains reasonably valued.

What does Friday's announcement change for the stock? Very little. The CEO is the same, the policies are the same, and the cash is still Abel's to deploy.

Ultimately, the job that changed hands is about protecting the culture -- work that can matter over decades but doesn't show up in next quarter's numbers.

Buffett wrote that the company is in excellent hands and that he looks forward to staying on as a shareholder. If you already own the stock, I don't think there is anything in Friday's news to act on.

I'd keep holding the shares, and I'd be comfortable buying them at today's price, too.

Daniel Sparks and his clients have positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.