Warren Buffett's Middle Child to Be Nonexecutive Chairman

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Karen Langley, The Next Buffett Is Ready; Warren prepares his middle child, Howie, to succeed him as chairman at Berkshire Hathaway with lessons in what shouldn't change -- and what might. Wall Street Journal, Jan 11, 2025, at page B1.
https://www.wsj.com/business/how ... e-hathaway-72b2caa7

Three excerpts in the window of prints:
Warren Buffett has given considerable thought to what becomes of Berkshire when he dies.
$954 billion  The market capitalization of Berkshire Hathaway
'When the time comes, I’m ready to do it,' Howie Buffett says of the Berkshire chairman role.

Note: Warren now is both chairman and CEO.
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Howie Buffett standing with his father, Warren, in November. Below, as a child with his father.

When Howie Buffett first bought a front-end loader, he didn’t know how to start it. When he ran to be a county commissioner of Douglas County, Neb., he didn’t know what the board did.

He just knew he would figure it out.

Howie–and really, no need to call him Howard, he and his dad, Warren, say—has been a sheriff, a member of the Nebraska ethanol board and a farmer. He’s served on corporate boards and runs a charitable foundation.

Now he’s getting ready for a really high-profile job: chairman, without an executive role, of the nearly $1 trillion Berkshire Hathaway BRK.B -2.03%decrease; red down pointing triangle.

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

Warren Buffett is upfront about why he wants Howie in the job. “He is getting it because he’s my son,” he told me. “I’m very, very, very lucky in the fact that I trust all three of my children,” he added during a later conversation.

As a child, Howie Buffett listened to Warren Buffett’s side of telephone conversations, asking questions about things he didn’t understand. As an adult, he turned to his father for advice. And as a director on Berkshire’s board for more than 30 years, he’s had a front-row seat as his father built Berkshire into one of the largest companies in the U.S.

“I feel I’m prepared for it because he prepared me,” Howie Buffett said. “That’s a lot of years of influence and a lot of years of teaching.”

At 94, Warren Buffett is chairman and chief executive of Berkshire, the company he transformed from a struggling textile maker into a conglomerate with a market value of $954 billion. He has been planning for decades for what happens after he dies—with his company, and with his massive fortune. At Berkshire, Buffett has long said he wants his middle child, 70-year-old Howie, to succeed him as nonexecutive chairman to help preserve the company’s culture. Warren Buffett’s daughter, Susie Buffett, has also served on the board since 2021. A longtime Berkshire executive named Greg Abel is on deck to become CEO and run the business.

Warren Buffett has also made clear that his children won’t get most of his fortune. Together with his two siblings, Susie, 71, and Peter, 66, Howie will be charged with directing his father’s nearly $140 billion in Berkshire stock to philanthropic purposes, one of the greatest transfers of wealth in modern history.

Warren Buffett agreed to my request to talk about Howie’s future role in the company, and Howie and his siblings talked to me, too. We could meet, Howie Buffett said, on the farm owned by his charitable foundation.

On a clear July day in the fields outside Decatur, Ill., Howie Buffett and I climbed into the air-conditioned cab of his big green S770 John Deere combine to harvest wheat. His two German shepherds, one nearly 100 pounds and the other even bigger, rested in his pickup nearby. Dressed in jeans and short sleeves, he operated the machine as it crossed the fields under the direction of a satellite-powered guidance system displayed on a small color screen. From our vantage roughly 10 feet off the ground, I could see fields far into the horizon.

As rotating rows of blades fed the wheat into the machine, he explained the combine’s sophisticated controls. Then, over the whir of the combine, we talked about his career and life with his famous father. We continued the conversation in his foundation’s office, near a display of artillery shells given to him on trips to Ukraine, and by phone over the coming months.

Berkshire is a rarity among U.S. companies: a corporate empire that held together as conglomerates from General Electric to DuPont split apart. Its business spans much of the economy, from insurance to utilities, cowboy boots to rail. It owns massive stock positions in Apple, Bank of America, Coca-Cola and other household names and sits on more than $300 billion in cash and Treasury bills.

Warren Buffett’s towering success as an investor—and his ownership of a large portion of shareholder votes—helped him craft Berkshire into what it is today. When he is no longer there, the company could face significant pressures: to sell off subsidiaries or release cash to shareholders through a dividend, for example.

The legendary investor has long admired executives who work into old age. His longtime vice chairman, Charlie Munger, continued in that role until his death in 2023 just weeks before his 100th birthday. Warren Buffett recently said he feels good and has no plans to step aside, though he notes that Abel, the Berkshire vice chairman who is expected to follow him as CEO, runs the operations of the non-insurance subsidiary companies. Fellow Vice Chairman Ajit Jain oversees its insurance business.

He has given considerable thought to what becomes of Berkshire when he is no longer there.

“I care more about the future of Berkshire after I die than during the period I’m alive. It’s my creation,” he said. “What I want is a company that’s successful and also embodies a company that belongs to the shareholders… That is something that takes a long time to build and could be torn apart very easily if it fell into the hands of people who would want to break it up.”

Ahead of Berkshire’s 2013 annual meeting, Warren Buffett invited Doug Kass, a hedge-fund manager who was short Berkshire stock, to ask questions. One was about Howie Buffett eventually becoming nonexecutive chairman.

“Howard has never run a diversified business, nor is he an expert on enterprise risk-management,” Kass said. “Best as we know, he hasn’t made material stock investments, nor has he ever been engaged in taking over a large company. Away from the accident of birth, how is Howard the most qualified person to take on this role?”

The job wasn’t what Kass described, Warren Buffett replied.

“He won’t have to think about running the business,” he said. “He’ll only have to think about whether the board—and himself, but as a member of the board—whether the board may need to change the CEO.”

If the board realized they hired the wrong CEO, having a nonexecutive chairman would make it easier to make a change, he said.

“It’s a pure case of nepotism,” Kass told me when I called him more recently. That said, given how Warren Buffett has built the company, he wasn’t so sure it mattered. These days he is neither invested in Berkshire nor betting against it.

Just what is the culture that Howie Buffett is meant to protect? Berkshire is known for buying business and keeping them, giving managers latitude to operate, holding plenty of cash.

Howie Buffett defines it this way: “The culture is to keep things simple, to do what you need to do but don’t do a lot of things you don’t need to do, treat people fairly, respect your managers, respect your shareholders. Tell them the bad news upfront, be honest,” he said. “It’s not rocket science.”

A lot of Berkshire shouldn’t change, Howie Buffett says: The headquarters, for example, isn’t going anywhere. (“It will never move from Omaha, Nebraska.”) Berkshire should continue holding annual meetings at which the leadership takes questions at length from shareholders. (“One hundred percent, absolutely. I just hope I can do it and Greg can do it for eight hours like he does.”)

On other matters, he was noncommittal. Asked whether the company should consider paying a dividend, he laughed and said: “That’s a trick question…There’s no way that I can answer that question because I don’t know.”

On spinning off a subsidiary company, he said it would be hard to judge such an idea without knowing the circumstances. “It’s not traditionally what Berkshire’s done so there’d have to be a pretty good reason to do something different…It is part of the culture, you buy something and you keep it.”

Growing up in Omaha, Howie was a lively presence in the Buffett home. Susie Buffett recalls a sleepover party that was interrupted by her brother knocking on a window dressed in a gorilla costume. “He didn’t scare me, because I was used to it,” she said.

Howie Buffett says he excelled in high school but found college to be a struggle. He attended several colleges but says he had trouble adjusting to the unstructured environment and never earned a degree.

After seeking his father’s advice, he moved to Los Angeles to work at See’s, a candy company owned by Berkshire.

After a brief first marriage, he married Devon Morse, who brought her four daughters to the family. They left California shortly after for Nebraska and welcomed a son, Howard Warren Buffett.

Back home in Omaha, Howie Buffett wanted to work with big machines. He started his own excavating business, then moved on to farming. After a few years, Warren Buffett bought a farm for him to work. Howie says he paid his father market-rate rent.

He ran for and won a seat on the county board of commissioners, taking office in 1989. The work involved setting the county budget, overseeing mental-health facilities and operating a landfill, he said. He also became a member, and then chairman, of the state ethanol board.  

Agricultural giant Archer-Daniels-Midland named him to its board in 1991 and then hired him as corporate vice president and assistant to the chairman. He headed investor relations, worked on business development and served as company spokesman. The family moved to Decatur, where ADM was based.

Howie Buffett says he learned a lot working at such a big company. He left shortly after an antitrust investigation into the company broke into public view. ADM went on to plead guilty to conspiring to fix prices and set sales volumes on two products it sold. The company agreed to pay $100 million in penalties in what was the largest-ever criminal antitrust fine at the time. The episode was the subject of the 2009 movie “The Informant!” starring Matt Damon.

“I knew that I would never know what the company did or didn’t do,” he said. “When I made that decision, I alienated some of my best friends…[T]hey would look at me like I was a traitor.”

Howie Buffett has served as a director on a number of other corporate boards, including Berkshire’s beginning in 1993. He was on the boards of Coke bottler Coca-Cola Enterprises, as well as irrigation and infrastructure company Lindsay Corporation and packaged-food maker ConAgra Foods. In 2010, he joined Coca-Cola’s board, where he remained until 2017.

He spent several years as a partner and investor at GSI Group, which made agricultural equipment. And for a period in 2017 and 2018, he was sheriff of Macon County, Ill., after previously serving as an auxiliary deputy.

Howie Buffett’s efforts to preserve Berkshire’s culture will intersect with the siblings’ task of giving away their father’s Berkshire holdings: The stake, mostly supervoting Class A shares, carries about 30% of the company’s voting rights. As time goes on, the family’s control will diminish.

All three children run foundations that receive regular donations of Berkshire shares from their father. The three say they have made no decisions about how to distribute the billions of dollars in stock that Warren Buffett is expected to leave behind when he dies.

These days, Howie Buffett spends much of his time working on food security and conflict mitigation through his Howard G. Buffett Foundation, which is funded by gifts of Berkshire shares from his father. The foundation has supported coca crop substitution in Colombia, agricultural training in Rwanda and the construction of a hydroelectric plant in the Democratic Republic of Congo.

“When Howie gets interested in something, he gets interested 110%,” Susie Buffett said.

His brother feels a responsibility to preserve his father’s legacy, said Peter Buffett.

“He carries the weight of meaning around Berkshire and what my dad has built,” he said.

After Russia invaded Ukraine in 2022, Howie Buffett took on aid to Ukraine as part of his charitable work. His foundation has spent more than $800 million paying for food assistance, supporting agriculture, demining operations, war-crime investigation and other initiatives. He has traveled to Ukraine 16 times since the war began, most recently in December, when he says he had lunch with President Volodymyr Zelensky, went on food distributions and met people who received prosthetics through an organization his foundation supports.

Some of his Ukraine work takes place back home. That summer day in rural Illinois, he was harvesting crops grown as part of an experiment. Concerned that the use of land mines in Ukraine would lead to claims the country’s grain was contaminated, he had TNT detonated in his foundation’s fields and then planted wheat to see how the crop would be affected.

So far, testing has shown no contamination in the soil or wheat, he said.