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Berkshire Hathaway has named Howard Buffett as chair, replacing his father Warren, who will become chair emeritus of the company he spent six decades building into America’s best-known conglomerate.
The elevation of Howard comes less than a year after Greg Abel became chief executive, capping the biggest shake-up at the top of the company since the elder Buffett took control of Berkshire in 1965, when it was a struggling New England textile mill.
The 71-year-old Howard, the second of Warren’s three children and a Berkshire board director since 1993, has long been earmarked for the role of chair at a company that has become synonymous with the Buffett name.
The elder Buffett, along with his former business partner Charlie Munger, transformed Berkshire into a $1.1tn behemoth spanning railways, utilities and insurance operations.
In a letter to shareholders published on Friday, Warren said: “Greg runs the company; Howard will guard its culture and values — both worth more than anything on our balance sheet.”
Berkshire said 96-year-old Buffett would remain on the board and provide “valued judgment and perspective”, but his decision to relinquish the role of chair marks a further loosening of the billionaire’s grip on the company after Abel replaced him as chief executive in January.
“Serving as your chairman has been the privilege of a lifetime, and I have never taken your trust for granted,” Warren wrote to shareholders, adding: “Father Time always wins.”
In July, Buffett set out final plans for his own remaining shares in Berkshire, indicating that they would be handed to four family-linked foundations within the next eight years.
“This is obviously a really significant moment for investors,” said Christopher Rossbach, chief investment officer of J Stern & Co, which has owned Berkshire shares for many years. “The transition is now complete in the way that he’s prepared it for so many years.”
Howard spoke about the possible transition during an interview with 60 Minutes in 2011, but at that time signalled that the elder Buffett would most likely stay as chair until his death.
While Howard has sat on the boards of Coca-Cola and ConAgra Foods, the succession plan catapults him into a critical job at one of the biggest companies on the US stock market.
The younger Buffett runs his own charitable foundation and has also managed corn and soyabean farms in Nebraska and Illinois. As well as writing several books, he has previously served as a county sheriff in Illinois.
“The succession has long been planned,” said Kevin Chen, the chief economist of Horizon Financial, who has attended Berkshire’s annual meetings in Omaha, Nebraska, for the past 20 years. “Buffett always wanted a family member” to help preserve the company’s culture.
Since Abel took the reins at the start of the year, Berkshire shares have risen about 2 per cent, lagging behind the 11 per cent gain for the benchmark S&P 500. The shares were down 0.4 per cent in early trading on Wall Street.
In recent months Abel has begun to put some of Berkshire’s $365bn cash pile to work, including ploughing $10bn into shares of Alphabet. In May, Berkshire agreed to buy US homebuilder Taylor Morrison for $8.5bn.
Abel said on Friday: “We are grateful to Howard for the care, discipline and deep understanding of Berkshire he will bring to his new role.”
Berkshire said that Susan Decker would continue in her role as the company’s lead independent director.
