Greg Abel, the newly appointed chief executive officer of Berkshire Hathaway Inc., is set to receive a significant compensation increase in his first year at the helm. The conglomerate disclosed in a regulatory filing that Abel's annual cash salary will be US$25 million.
A New Era of Executive Pay at Berkshire
This new salary marks a 19 per cent increase from the US$21 million Abel earned in 2024. His total compensation for the year was slightly higher when other elements were included. The figure stands in stark contrast to the famously modest US$100,000 annual salary collected for decades by his predecessor, Warren Buffett.
The 95-year-old Buffett, who revealed at the company's annual meeting in May that he would cede the CEO role to Abel starting in January 2026, remains as chairman. Buffett's wealth, estimated at roughly US$150 billion by the Bloomberg Billionaires Index, stems almost entirely from his vast holdings of Berkshire stock, not his executive pay.
Responsibilities of the New CEO
Abel's responsibilities extend far beyond his new pay grade. He now leads a US$1 trillion conglomerate with holdings in insurance, utilities, railroads, and a massive stock portfolio valued at US$283 billion as of September 30. One of his most critical tasks will be strategically deploying Berkshire's enormous US$382 billion cash pile to generate future growth for the company.
Greg Abel, who is Buffett's hand-picked successor, has a long history with Berkshire. He joined the fold in 1999 when the company acquired a controlling stake in the energy company MidAmerican. Abel rose to become CEO of what is now Berkshire Hathaway Energy in 2008 and was promoted to vice chairman of Berkshire Hathaway in 2018, overseeing all non-insurance operations before his latest ascent.
Executive Pay in Perspective
While Abel's salary vastly outpaces Buffett's, it remains conservative compared to the extreme, performance-based incentive packages seen in the technology sector. For instance, Tesla Inc. shareholders last year approved a potential US$1 trillion compensation package for CEO Elon Musk, which is contingent on meeting ambitious benchmarks over a ten-year period.
Abel's compensation reflects a more traditional executive pay structure at the Omaha-based holding company, signalling a new chapter for Berkshire Hathaway while maintaining a distinct philosophy from the high-risk, high-reward models prevalent in Silicon Valley.
