Berkshire Hathaway has announced a substantial pay raise for its new chief executive, Greg Abel, signalling a new era for the conglomerate following Warren Buffett's legendary tenure. A recent regulatory filing reveals that Abel's annual cash salary for his new role is set at $25 million.
A New Compensation Era Begins
This new salary represents a significant 19% increase from the $21 million Greg Abel earned in 2024 in his previous role as vice chairman. The figure starkly contrasts with the famously modest $100,000 annual salary that his predecessor, Warren Buffett, drew for decades. The pay bump was detailed in a company filing made public on Tuesday.
Greg Abel officially stepped into the CEO role on 1 January, succeeding the 95-year-old Buffett, who had led the Omaha, Nebraska-based empire for over six decades. Abel had spent eight years as vice chairman, overseeing all of Berkshire's vast non-insurance operations before his promotion.
Tracking Abel's Rising Compensation
The regulatory documents provide a clear view of Abel's rising compensation in recent years, which was set by Buffett himself. In 2023, he received a $20 million salary. The previous year, in 2022, his compensation included a $16 million salary plus a $3 million bonus. His total earnings for 2024, with additional compensation, were slightly above his $21 million base.
Meanwhile, Berkshire's other vice chairman, Ajit Jain, who manages the insurance businesses, was paid the same amount as Abel from 2022 to 2024. The compensation packages for both Jain and Abel for the year 2025 have not been disclosed yet.
Context and Implications of the Pay Shift
While Abel's $25 million salary is a massive leap from Buffett's, it is rooted in modern corporate compensation norms. Warren Buffett's wealth, estimated at around $150 billion by the Bloomberg Billionaires Index, stems almost entirely from his ownership stake in Berkshire, not his salary. His low pay was a unique hallmark of his leadership philosophy.
Furthermore, even Abel's elevated pay pales in comparison to the mega-packages seen in the technology sector. For instance, Tesla shareholders recently approved a monumental compensation plan for Elon Musk valued at up to $1 trillion. Abel's compensation reflects a more traditional corporate structure, albeit at the top end for S&P 500 CEOs.
Who is Greg Abel? The Canadian-born executive from Edmonton, Alberta, has been a key lieutenant to Buffett for years. He joined Berkshire in 1999 via the acquisition of energy company MidAmerican. Abel rose to become CEO of Berkshire Hathaway Energy in 2008 and was appointed vice chairman in 2018. He also holds approximately $171 million in Berkshire stock and, in 2022, sold his 1% stake in the energy business back to Berkshire for $870 million.
The shift in CEO pay at Berkshire Hathaway underscores the broader transition in leadership and corporate culture as the company moves beyond the Buffett era. It highlights the evolving standards for executive compensation, even within the most traditional of corporate giants.
