Warren Buffett, 96, has stepped down as chairman of Berkshire Hathaway, about nine months after handing the CEO role to Greg Abel. His son, Howard Buffett, a 33-year Berkshire board member, succeeds him as chairman. Shareholders have little reason for concern given how far in advance the handover was planned.
Warren Buffett, who is 96 years old, has stepped down as chairman of Berkshire Hathaway, closing out a tenure in which he delivered annualized returns of 19.7% over more than 60 years. In the letter announcing his departure, Buffett wrote that "Father Time always wins."
A transition years in the making
The move follows Greg Abel's appointment as chief executive about nine months earlier, when Buffett shifted from CEO to chairman rather than leaving all at once. He worked with Abel for decades before that handover, shaping him into the designated successor long before the switch took effect. Buffett then stayed on as chairman to help guide Abel through the early transition before stepping back himself.
Howard Buffett takes the chairman's seat
Warren Buffett's son, Howard Buffett, now becomes chairman after 33 years on Berkshire's board. He also sits on the board of Coca-Cola, among other companies. According to Warren Buffett, Howard's main task is to safeguard the conglomerate's culture and values.
Why shareholders probably shouldn't worry
Neither Abel nor Howard Buffett will replace Warren Buffett, since each is a different person with a different role. But Buffett worked with Abel for decades before handing him the CEO job, giving Berkshire's leadership change in the stock market a structure built deliberately rather than in haste. For shareholders, that continuity is the main reason the transition looks orderly rather than abrupt.
Source: Fool
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