Berkshire Hathaway shares fell 2.8% before the bell on Monday after famed investor Warren Buffett decided to step down from his 60-year role as CEO of the $1.16 trillion conglomerate, handing over the reins to Vice Chairman Greg Abel.

The transition will take place at the end of 2025 and Buffett would stay on as chairman, the company's board, which voted unanimously on the leadership change, said.

The decision to name Abel as CEO was first disclosed by 94-year-old Buffett in a surprise move at Berkshire's annual meeting in Omaha, Nebraska, on Saturday.

The handover marks his retreat from the helm of a company that he built from a floundering textile mill into an investment colossus that owns railroads, insurance companies and an ice-cream maker.

Buffett's unmistakable sense of judgment in making investments made him one of the great stock pickers of America, while his market insights through Berkshire Hathaway letters and his lessons in value investing earned him the title of "Oracle of Omaha".

Shareholders said it remains unclear how the holding company's 189 operating businesses, $264 billion of stocks and $347.7 billion of cash will fare after the man so intertwined with it leaves the stage.

The company's Class B shares dipped to $524.53, putting them on course to wipe out billions of dollars in market value if losses hold. They have jumped about 33% in the past year, outperforming the 12% gain in the S&P 500 (.SPX), .

Buffett's exit "will probably impact investors' view of Berkshire more than it will actual operations", KBW analyst Meyer Shields wrote in a note, adding that the surprise timing could pressure shares on Monday.

Over the course of six decades as the top boss of Berkshire, Buffett became a household name, thanks to his sharp one-liners, often delivered alongside his right-hand man Charlie Munger, who died in 2023.

Their presence at the company's annual shareholder meetings made it a must-attend event for thousands of investment-savvy Americans.

THE NEXT CHAPTER

Abel, 62, has been the CEO-designate since May 2021 and leaders of most Berkshire businesses have reported to him since 2018.

Born in Alberta, Canada, Abel joined Berkshire Hathaway Energy, then known as MidAmerican Energy, in 1992, which Berkshire later took over, and became MidAmerican's chief in 2008.

Before Buffett disclosed his plan, Abel, who was unaware of the move, told attendees at the annual meeting he would be "more active, but hopefully in a very positive way", in overseeing Berkshire subsidiaries, though they would continue running "very autonomously".

Abel could now face the tricky task of putting the company's record cash pile to good use. Berkshire has been a net seller of stocks for 10 straight quarters.

Over the last one year, he has taken over some of the capital allocation responsibilities from Buffett.

His commitment to continue Berkshire's capital deployment strategy with "an identical philosophy" should reassure investors, TD Cowen analysts wrote in a note.

The company's insurance units such as Geico, General Re and National Indemnity, will continue to report to Vice Chairman Ajit Jain.