Warren Buffett Chose a Favorite, Not a Successor

The news was intended to comfort anyone who cares to imagine Berkshire Hathaway without its octogenerian leader at the helm. Warren Buffett has finally—finally!—found someone to replace him as chief executive officer. But that announcement, disclosed in Buffett’s annual shareholder letter on Feb. 25, has turned out to be something of a non-event. If anything, it’s arguably worse: a notice that could foster more confusion and ill will than if he’d said nothing at all.

While Buffett may have complete confidence in his designated replacement, along with “two superb back-up candidates” cited in his letter, this is not a successor. It’s an admission that he has selected a favorite. The Berkshire chief’s comments on CNBC on Feb. 27 confirm that Mr. Right (a scan of the top ranks suggests it is unlikely to be a Ms.) is little more than Mr. Right Now. Start with the fact that Buffett, 81, has made it clear that he has no intention of stepping down. None. And yet he has told the world that one person has emerged victorious in the horse race to replace him, even though it could be years before that person claims the prize. Nobody outside the board room knows who has been chosen. As Buffett admitted during his annual “Ask Warren” marathon on CNBC, the leader-in-waiting doesn’t even know he’s already been picked for the top job.