Bill Ackman Expects Berkshire To Introduce Dividends, Expand Stock Buybacks After Warren Buffett’s Tenure
Synopsis
Despite the substantial capital base, Ackman expects Buffett’s successor, Greg Abel, and Berkshire’s leadership team to remain cautious in pursuing major acquisitions.
Berkshire Hathaway (BERK.B) (BERK.A) shares dropped in morning trade on Friday after Warren Buffett announced on Saturday that he will be stepping down as CEO.
However, Bill Ackman – the billionaire CEO of Pershing Square Capital Management – believes Buffett’s departure could increase the company’s cash returns to shareholders.
“I think they’re going to start returning capital,” Ackman told CNBC on Monday, suggesting Berkshire could introduce a dividend or become more aggressive with share buybacks.
The company has not paid a dividend during Buffett’s tenure and has not repurchased stock since the second quarter of 2024.
On Sunday, Berkshire’s board unanimously approved Buffett’s recommendation to name Vice Chairman Greg Abel as president and CEO, effective year-end. Abel will lead the trillion-dollar conglomerate starting January 2026.
Despite the substantial capital base, Ackman expects Abel and Berkshire’s leadership team to remain cautious in pursuing major acquisitions.
“I think it’s yet to be proven that the current management team has the capability that Buffett has had to buy businesses, and it’s more challenging now because of the scale,” he said.
Ackman, a longtime admirer of Buffett, called him “one of my most important heroes, certainly in business, and I would say in life.”
He also expressed confidence in Abel’s ability to oversee Berkshire’s vast portfolio. “Greg Abel is known to be a superb operator and a very good allocator of capital,” he said. “I wouldn’t bet against Berkshire.”
Earlier on Monday, Ackman’s firm announced it had increased its stake in real estate firm Howard Hughes, with plans to expand it into a conglomerate-style investment vehicle similar to Berkshire.
Berkshire Hathaway’s Class B stock was down over 5.5% in morning trade on Monday, as the broader market also showed weakness. However, the shares have gained over 12% year-to-date and are up 27% over the past 12 months.
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