Warren Buffett takes next step in long-term plan to ensure Berkshire doesn't stray after he's gone

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Warren Buffett at the 2024 Berkshire Hathaway shareholders meeting (CNBC/David A. Grogan)

Warren Buffett is taking a third major step in his multi-year plan to gradually step away from Berkshire Hathaway, the formerly troubled Massachusetts textile manufacturer he took control of in 1965 and lovingly built over six decades into one of the world's most valuable companies.

But even after just turning 96, he is still not leaving altogether, as he continues to do everything he can to make sure Berkshire retains the core values he built into it even after he does say goodbye for good.

First, over many years, he allowed Berkshire veteran Greg Abel, the CEO-designate, to handle Berkshire's many operating companies.

Then, in May of 2025, he announced he would step down as CEO at the end of the year but remain chairman, with Abel taking over as chief executive.

Now, as we reported in a special edition of the newsletter this morning, he is stepping down as chairman but will remain on the company's board of directors as "chairman emeritus" to "continue to offer his valued judgment and perspective."

And, very importantly, "consistent with the company's long-standing succession plan," his son, Howard, will become chairman.

As Buffett wrote in a letter to shareholders this morning, Howard's primary responsibility will be to "guard [Berkshire's] culture and values – both worth more than anything on our balance sheet."

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Warren Buffett, Howard Buffett, Greg Abel (CNBC/David A. Grogan)

Both the company's news release, and Buffett's attached letter to shareholders, stress the continuity represented by having Buffett's son as chairman of the board.

Abel is quoted as saying, "The culture Warren built and the values he championed will remain at the heart of Berkshire, and Howard will be their guardian."

Buffett notes his son has been a director for 33 years. "Think of Howard as a policy the shareholders own and hope never to claim against."

As CNBC's Becky Quick put it in her "Squawk Box" breaking news report this morning, Buffett "has always talked about Berkshire Hathaway like another one of his children, and making sure it's in the right hands has been one of the most important decisions I think he's ever made."

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Since Abel took over as CEO, both he and Buffett have made of point of saying Buffett still comes into the office five days a week and the two talk with each other at least every few days.

Many on Wall Street believed Abel was responsible for Berkshire's now $37 billion investment in Alphabet's AI ambitions, but in July, Buffett told CNBC he was the one who initiated it, with Abel's approval.

"I am not doing anything that [Abel] doesn't approve of. He's not doing anything I don't approve of. We talk all the time... but he is the decider."

We don't yet know whether today's announcement signals a change in that relationship, with Buffett taking an even more passive role, or if he will still be as active, just with a different title.

Buffett did say in his letter he still has "the best job in the world" and has "never felt better about what comes next."

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"It was always a matter of when, not if. Buffett has made a graceful exit," Annex Wealth Management's Brian Jacobsen tells Reuters.

"This feels more like the completion of a carefully planned succession than a sudden changing of the guard."

 
Who is Howard Buffett?

While we've long known Warren Buffett planned to have his son, Howard, who prefers to be known as "Howie," succeed him as Berkshire Hathaway's chairman, he is not nearly as well-known as his father.

That prompted several major news organizations to run profiles of him and his "eclectic background," as Bloomberg describes it.

The New York Times says he attended three colleges without graduating from any of them before he started running a 400-acre farm north of Omaha in 1986 that he continues to operate, along with a 1500-acre farm in Illinois.

He has been involved with law enforcement, serving as a county sheriff for over a year starting in 2017 after completing what Reuters described at the time as "more than 3,300 hours of patrol and training, [with] 76 weapons qualifications including Tasers, handguns, rifles and shotguns."

Howard Buffett, like his father, is a major philanthropist. His foundation, which receives a donation each year from Warren Buffett, gave away $700 million last year, focusing on food security, conflict mitigation, and countering human trafficking, Barron's reports quoting the group's annual report.

Ukraine has been a major beneficiary, receiving around $350 million in 2025 and a total of $1.1 billion since Russia's invasion in 2022.

He has traveled to the country, telling CNBC in 2022 he had "never quite seen anything like this in my lifetime."

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While Howard is not a typical businessperson, The Wall Street Journal notes he is "no stranger to corporate boards," having served as a director for Coca-Cola, Coca-Cola Enterprises, and ConAgra Foods, among others.

But, says the Journal, his main qualification to be Berkshire's chairman is that "his father is Warren Buffett."

It quotes Buffett telling the newspaper in 2025, "He is getting it because he is my son."

In that article, Howard said of eventually becoming chairman, "I feel I’m prepared for it because [Warren] prepared me. That’s a lot of years of influence and a lot of years of teaching."

"When the time comes, I’m ready to do it. But that’s how I am. I’ve gone through most of my life doing things that I wasn’t sure exactly how to do."

 
Berkshire shares undisturbed

Wall Street apparently does not anticipate today's announcement will have a major effect on the company's prospects, at least for now.

Both the Class A and Class B shares initially fell in early trading but then recovered to end nearly unchanged on the day.

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That may be because what's been called the "Buffett Premium" has already faded.

Berkshire shares are down more than 5% since his announcement in May of last year that he planned to step down as CEO at the end of 2025. That's well behind the S&P 500's gain of more than 34%.

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And since the beginning of this year, Berkshire's B shares are underperforming the benchmark by more than 10 percentage points.

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