Warren Buffett said Berkshire Hathaway Inc. has a plan if his eventual replacement as chief executive officer isn’t up to the job.
Buffett’s son Howard, as non-executive chairman, will be able to deal with an underperformer, the billionaire said in a letter published Saturday for shareholders.
“If elected, Howard will receive no pay and will spend no time at the job other than that required of all directors,” Buffett wrote. “He will simply be a safety valve to whom any director can go if he or she has concerns about the CEO.”
Buffett, 84, used the letter to lay out his vision for Berkshire’s next decades, 50 years after he took over a struggling textile mill that he turned it into one of the world’s largest companies. He’s said the board spends a lot of time considering who the next CEO should be, though he hasn’t publicly named the candidates.
One of Howard Buffett’s roles as non-executive chairman will be to help preserve the company’s culture, the billionaire has said. The son, 60, has been a director since 1993 at Berkshire. Other board members include Microsoft Corp. co-founder Bill Gates and Comcast Corp. executive Stephen Burke.
At one time, Howard was head of investor relations for Archer-Daniels Midland Co. He farms in Illinois, Nebraska, Arizona, and South Africa. He also runs the Howard G. Buffett Foundation, which works to improve subsistence agriculture and resolve conflicts tied to food.
Buffett said Saturday that he thinks there’s little chance that Howard will have to dethrone a bad chief executive at Berkshire.
“This problem has a very low probability of arising at Berkshire -- likely as low as at any public company,” Buffett wrote. “In my service on the boards of nineteen public companies, however, I’ve seen how hard it is to replace a mediocre CEO if that person is also chairman.”
Howard G. Buffett spoke at this year's Top Producer Seminar in Chicago. Click here to see what he said about immigration, farming, and more.