Warren Buffett is old now, 85, but looks healthy. We hope he lives longer. Even so, what is the word on the street about Buffett? What are the terrible consequences that would happen in the finances of his company when he passes on? Who are the people he has chosen as administrators of his businesses long after he is gone?
The generous capitalist pledged to give 99% of his wealth, which is in the form of Berkshire stock, as donation to charitable causes, especially through the Bill and Melinda Gates Foundation. His Berkshire fortune is approximately $66.4 billion. He is the biggest shareholder in Berkshire Hathaway with 33% ownership.
The important question is: what will happen to the owner-controlled corporation when its founder/manager is gone?
As he donates his shares to the Gates and other philanthropic organisations, which he began doing in 2016, control in the company will inevitably be diluted through dispersion among many owners. Last year alone, Buffett made his largest distribution of 20.64m Class B Berkshire shares among 5 different foundations.
With this largess, Buffett has insisted that Bershire “will be the same” without him. That his altruism will not undermine the very culture and strategy that has been the basis for the model firm’s long-time success.
Analysts view this as Buffett’s biggest and riskiest final gamble.
A Berkshire with diluted control raises the question: will the company remain a success in future?
Buffett announced that Howard Buffett, his son, will become Berkshire’s unpaid non-Executive Chair of the Board. But will Howard fulfill the role of ensuring Bershire’s unique culture without the power that comes with shares to back him? Most likely not.
Buffett has not publicly announced who will succeed him as CEO when he dies, but has said that he and Berkshire’s board are in solid agreement on who that person shall be.