(Reuters) - Berkshire Hathaway Inc BRKa.N shares rallied on Wednesday after the conglomerate's board gave its billionaire chairman, Warren Buffett, more freedom to conduct stock buybacks and whittle down a $108.6 billion stockpile of cash.

FILE PHOTO: Warren Buffett, CEO of Berkshire Hathaway Inc, tours the exhibit hall at the company's annual meeting in Omaha, Nebraska, U.S., May 5, 2018. REUTERS/Rick Wilking/File Photo

The company’s Class A shares climbed $14,470, or 5 percent, to $302,970 in afternoon trading, while its Class B shares rose $10.32, or 5.4 percent, to $200.73 on the New York Stock Exchange.

Berkshire announced late Tuesday that Buffett and Vice Chairman Charlie Munger, who make major decisions on allocating capital, may now repurchase stock when both believe the price is below Berkshire’s “intrinsic value,” a determination that would be made “conservatively.”

The old policy prohibited buybacks when the stock price exceeded 1.2 times book value per share, or assets minus liabilities.

Berkshire shares recently traded closer to a 1.4 times multiple. The Omaha, Nebraska-based company has not disclosed any buybacks since December 2012.

“We’re surprised that this took so long,” wrote Meyer Shields, an analyst at Keefe, Bruyette & Woods who rates Berkshire “market perform.”

Shields called the old buyback policy “almost obsolete,” saying the recent slashing of the U.S. corporate tax rate materially boosted book value by reducing Berkshire’s deferred tax liabilities but “with almost no impact on intrinsic value.”

The cash hoard gives Buffett power to make what he calls “elephant” sized acquisitions of whole companies.

He has, however, lamented his inability to find an elephant since paying $32.1 billion for aircraft parts maker Precision Castparts in January 2016.

Buffett signaled a possible policy shift at Berkshire’s annual meeting on May 5. He told shareholders that if Berkshire could not deploy capital effectively, buybacks based on intrinsic value might be a means to return capital to them.

“It’d be unlikely we’d do it by special dividend,” he said. “It’d be more likely we’d do it by repurchase if the repurchase didn’t result in us paying a price above intrinsic value per share. We’re never going to do anything that we think is harmful to continuing shareholders.”

Buffett in recent months spent some cash to build a more than $40 billion stake in iPhone maker Apple Inc AAPL.O.

Berkshire said it will not conduct buybacks that reduce its cash stake below $20 billion. That provides a cushion for potential large claims losses at Berkshire’s insurance units.

No buybacks under the new policy will occur before Berkshire releases second-quarter results, scheduled for Aug. 3.