Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc's annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan/File Photo

By Jonathan Stempel

(Reuters) -Warren Buffett on Monday assured shareholders of Berkshire Hathaway they need not worry about his upcoming departure as chief executive, giving a full-throated endorsement to his successor Greg Abel and promising to remain a major stockholder in the conglomerate.

In a letter to Berkshire shareholders, possibly his last public communication with them until he steps down at year end, Buffett, 95, said Abel has "more than met" his high expectations when he first thought the 63-year-old was CEO material.

"I can't think of a CEO, a management consultant, an academic, a member of government - you name it - that I would select over Greg to handle your savings and mine," wrote Buffett, who will remain Berkshire's chairman.

Buffett also said he will speed up his charitable donations to family foundations led by his daughter Susie, 72, and sons Howard, 70, and Peter, 67, but that this "in no way reflects any change in my views about Berkshire's prospects."

Referring to longtime second-in-command Charlie Munger, who died in 2023, Buffett said he wants to keep a significant number of Class A shares "until Berkshire shareholders develop the comfort with Greg that Charlie and I long enjoyed."

Buffett also donated more than $1.3 billion of Berkshire stock, the equivalent of 1,800 Class A shares, to four family foundations led by his children.

He has donated more than half his Berkshire shares since 2006, but still owns close to 14% of its stock and according to Forbes magazine was worth $149 billion as of Friday. Buffett has led his Omaha, Nebraska-based conglomerate since 1965.

BUFFETT CONFIDENT IN BERKSHIRE EVEN AS PREMIUM ERODES

Through Friday, Berkshire's share price had fallen 8% since Buffett announced on May 3 he would step down, trailing the Standard & Poor's 500 by 26 percentage points.

Investors have said that underperformance eroded much of the "Buffett premium" embedded in Berkshire's stock because of the presence of arguably the world's most revered investor.

Abel has been a Berkshire vice chairman overseeing non-insurance operations since 2018.

He was publicly designated Buffett's expected successor in 2021, and has taken on many of the billionaire's responsibilities, which include allocating capital.

"To my surprise, I generally feel good," Buffett said in his letter. "Though I move slowly and read with increasing difficulty, I am at the office five days a week where I work with wonderful people."

Buffett said Berkshire's nearly 200 businesses collectively have "moderately better-than-average prospects," though investors should not expect the $1.08 trillion conglomerate to trounce the market as it often did when Berkshire was smaller.

"Our size takes its toll," Buffett said. "Because of Berkshire's size and because of market levels, ideas are few - but not zero."

CHILDREN TO OVERSEE BUFFETT'S REMAINING FORTUNE

Buffett's charitable giving has included more than $47 billion to the Gates Foundation.

Those donations will stop when Buffett dies. His children will oversee a charitable trust that will contain nearly all of his remaining wealth, and have about a decade to give it away. Successor trustees have been named if they cannot serve.

Berkshire-owned businesses include Geico car insurance, the BNSF railroad, an array of energy and industrial businesses, and familiar retail brands such as Dairy Queen, Fruit of the Loom and See's candies.

The conglomerate also ended September with $283.2 billion of stocks including Apple and American Express, and $381.7 billion of cash.

(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)