Warren Buffett’s immensely successful insurance and investment company Berkshire Hathaway, Inc will surely be left in good hands after he steps down, but the mystery surrounding the successor is disquieting to its investors.
Buffett sought to comfort those investors in his annual letter to shareholders over the weekend, but there was little comfort to be had without knowledge of his plan for the company after the 89-year-old fiscal icon steps down. The angst is caused, in part, by a long string of examples of what can happen when a phenomenal leader of a company departs and leaves another in charge, according to Reuters.
Take what happened at Microsoft, for instance, when Bill Gates left his company in the hands of Steve Ballmer. Ballmer has been struggling ever since to get share prices back up to where they were under the direction of Gates. A similar problem happened when Apple CEO Tim Cook took the helm from Steve Jobs.
Opinions of experts that are floating around offer little condolence.
“I don’t know of any good examples of an iconic CEO like Buffett ever being successfully followed,” said Meyer Shields, who is an analyst with Keefe, Bruyette & Woods, Inc.
Dave Sather, president at Sather Financial Group, said, “I feel sorry for the person who follows in his shoes.”
The problem that lies in wait for Buffett’s successor is his aptitude and freedom in taking serious risks that would easily get any other CEO fired immediately. The next head of Berkshire Hathaway, Inc. will have nowhere near that kind of freedom.
One thing that is known for sure is that Buffett’s role in the company will be split into 3 roles: CEO, Chief Investment Officer, and Chairman, which will be filled by his son, Howard.
Speculation has been rampant for years, and seemed to get a boost on Saturday when Buffett praised some of the names that have been floated for his replacement, including Ajit Jain, the head of his insurance operations, Greg Abel, the chief of his power utility MidAmerican, and Matthew Rose who leads his railroad company BNSF.
Perhaps the finalized plan will not be disclosed until Buffett departs for good, but one thing we know is that Buffett and Berkshire Hathaway have always looked far into the future when deciding the direction for the company. Surely it will be left in capable hands.
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