Greg Abel, the new Chief Executive Officer of Berkshire Hathaway (BRK.A.US) and successor to renowned billionaire Warren Buffett, is confronting numerous challenges. This Saturday, Wall Street will observe how he handles a challenge unique to Berkshire: the highly anticipated annual shareholder letter.

The 95-year-old Buffett stepped down as CEO earlier this year, concluding a six-decade tenure. During those sixty years, he transformed a struggling textile manufacturer into a conglomerate valued at over $1 trillion, encompassing numerous insurance companies, BNSF Railway, and dozens of energy, industrial, and retail businesses. While still serving as Chairman, Buffett indicated last November that he would "step back from public commentary" as Abel has assumed leadership of the company.

Buffett is a difficult act to follow, and the 63-year-old Abel is not expected to be a replica of him. Whether fielding questions alongside Buffett at the annual meeting in Omaha, Nebraska, or in a 2022 letter on environmental sustainability—which Buffett requested he write—Abel has tended to focus more on the operational specifics of Berkshire's businesses when communicating with investors. His letter will likely follow a similar pattern, though it may lack the literary flair of Buffett's eagerly awaited annual missives.

The letter presents an opportunity to outline the future direction of Berkshire Hathaway—and might even signal a gradual reduction of its massive $381.7 billion cash pile. "Warren Buffett was the Mark Twain of shareholder letters," said Evan Pondel, founder of investor relations firm Triunfo Partners and a professor at the USC Annenberg School for Communication and Journalism. "At Berkshire, Abel has not been highly accessible. The annual letter is a prime opportunity for him to establish his own style, tone, and strategy."

Abel joined Berkshire in 2000 and served as Vice Chairman for the past eight years, overseeing dozens of non-insurance operations. He is widely regarded as having a deep understanding of the company and a commitment to preserving its culture. "Management credibility has always been a cornerstone of Berkshire's strategy," said Greg Miller, a professor at the University of Michigan's Ross School of Business who specializes in financial communication. "Buffett's reputation lent credibility to the company's operations and decisions. Abel needs to take up and continue that legacy."

**Lagging Stock Performance**

Berkshire's fourth-quarter and full-year results will be released alongside Abel's letter. Full-year 2025 operating profit is anticipated to approach the record $47.44 billion set a year earlier. However, since Buffett announced his retirement plan on May 3 last year, Berkshire's stock has declined by 8%, while the S&P 500 index has gained 22%.

Analysts have long suggested that the cash accumulation may be a drag on performance. Berkshire has been a net seller of equities for twelve consecutive quarters and has not repurchased any stock for five consecutive quarters. Its stock trades at approximately 1.5 times its book value. Berkshire did not immediately respond to a request for comment.

No other CEO's commentary—including that of JPMorgan's (JPM.US) Jamie Dimon or BlackRock's (BLK.US) Larry Fink—is scrutinized as closely as Buffett's letters. Every letter he has written since 1978 is archived on the company's website. Buffett often adopted a conversational tone. In 2008, he famously wrote about the financial excesses that led to the U.S. housing market collapse: "You only learn who has been swimming naked when the tide goes out."

Even if Abel focuses primarily on Berkshire's operations, he could also choose to look outward. "Buffett's letters weren't just about how Berkshire was doing; they were about how Warren Buffett saw the world. People will want to know how Greg Abel sees the world," Miller said. "He must carefully balance maintaining the legacy with establishing his own identity."

**Unresolved Questions at Berkshire**

Abel's letter may address other lingering questions. These include the tenure of 74-year-old Vice Chairman Ajit Jain, whom Buffett has called "irreplaceable." His continued role, after decades leading Berkshire's insurance operations, remains a point of interest.

Berkshire Hathaway has not yet formally appointed a Chief Investment Officer to succeed Buffett, who personally oversaw the company's approximately $3000 billion stock portfolio. Ted Weschler, a key portfolio manager who previously assisted in its management, is seen as capable of assuming the role; Greg Abel is also considered a potential candidate, with the possibility of them sharing the CIO responsibilities.

Meanwhile, options for deploying the cash include resuming share buybacks or paying a dividend, which would be Berkshire's first since 1967. "Greg will seize the opportunity—it's a hallmark of the Berkshire way," said Steven Check, a long-term Berkshire investor at Check Capital Management in Costa Mesa, California.

Pondel suggested that Abel should use the letter to affirm his commitment to Buffett's values—a focus on long-term shareholder value—and articulate an investment philosophy he can execute over the next decade. This would signal that he is more than just the new field general for Berkshire. "Following Buffett is like taking the football from Tom Brady," said Macrae Sykes, portfolio manager at Gabelli Funds in Rye, New York, referring to the retired quarterback. "As long as Abel communicates effectively and provides clear, transparent feedback on the business, he can do a great job building shareholder confidence."