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Edward C. Johnson III, 91, Dies; Made Fidelity an Investment Giant

Mr. Tsai wound up selling his stake in Fidelity and moved to New York, where he created the Manhattan Fund and became a billionaire corporate financier. He died in 2008.

For decades, Fidelity was the subject of intense speculation about whom Mr. Johnson would designate as his successor. After holding various senior positions at the company and becoming for a time its largest shareholder, his daughter Abigail was named chief executive in 2014. At his death, Mr. Johnson’s title was chairman emeritus.

Last year, Forbes magazine ranked Abigail Johnson and her father as the 27th and 60th richest people in the world, with assets totaling $36.7 billion.

His only son, Edward IV, is president of Pembroke, a real estate firm affiliated with Fidelity, and his other daughter, Elizabeth, is not involved in the family business. In addition to his children, Mr. Johnson is survived by his wife, Elizabeth (Hodges) Johnson, whom he married in 1960, and seven grandchildren.

In 2007, in a rare interview, Mr. Johnson ruminated to Institutional Investor magazine about managing private companies. He declared that while outsiders may be given important roles, family members need to be prominent to provide stability “and an ongoing philosophy or culture of doing things a certain way.”

A major element of Mr. Johnson’s managerial style was his adoption of kaizen, a Japanese strategy involving constant incremental improvement that he learned about from a book he had found in the gift shop of a Tokyo hotel. He hired the author to lecture Fidelity executives, made a video about kaizen for new employees and wrote the foreword to another kaizen book, which included Fidelity as a case study.

Observers have often suggested that Mr. Johnson’s devotion to kaizen might explain the frequent personnel shifts at Fidelity, including Mr. Johnson’s removal of his daughter Abigail as head of the mutual fund division, which was suffering from mediocre performance, in 2005.

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