With the empire he created at a crossroads, famously tightlipped Fidelity chairman Ned Johnson is as enigmatic as ever. But though the man himself isn’t talking, what he has been spending his billions on speaks volumes — and might just reveal his plans for Boston’s last business dynasty.

Ned Johnson hates, hates, hates being late. But last December 13, on the evening of his company’s holiday party, the 77-year-old Fidelity chief was finding that the fickle New England weather was conspiring to make him just that. Though his firm had hired a fleet of buses from BostonCoach (which it owns) to shuttle employees to the World Trade Center (which it also owns), its preparations were rendered moot by a blizzard that had been dumping close to 2 inches of snow an hour on Boston since midday. On the twisting streets around Fidelity’s downtown headquarters, traffic was inching along at a near-standstill.

Fidelity’s annual holiday blowout traditionally has been a happy event, a night to unwind and toast the company’s latest stretch of prodigious growth. As far back as the early 1970s, Johnson’s father, who then controlled the company, used to dance with each of his secretaries before the festivities were over, twirling to tunes wheezed out on an accordion; Johnson himself is always among the last to leave. But on this night, the dismal weather seemed a fitting coda for a rough year for the mutual fund giant. A few weeks earlier, the independent credit-rating agency Moody’s had issued a scathing report on Johnson’s “lack of transparency” regarding his long-term plans for Fidelity, pointing out that the firm’s mutual funds had limped through a period of uncharacteristically poor performance. Criticism ran rampant that Johnson’s close-to-the-vest control of the company, an approach that had served him well for decades, was hurting Fidelity. And the drumbeat of serious doubts over whether Ned’s daughter, Abigail Johnson, has what it takes to one day assume leadership of the company was louder than ever.

Rather than brave the gridlock outside, a few Fidelity employees bundled into their coats and decided to forgo the company buses in favor of the Silver Line, squeezing on at South Station. Packed in tight, the group was shaking snow from their jackets when one of them noticed that Johnson had joined them. If any of the other passengers recognized the thin, white-haired man in the rumpled suit and big glasses—a prospect made unlikely by the low profile Johnson toils to keep—it must have been jarring. No bigshot businessman is supposed to take public transportation, and the thought of Johnson—a billionaire 10 times over—riding the T strains comprehension. Yet there he was. Appearances be damned, he had a party to get to, and had found the most efficient way to get there.

Johnson is notoriously short on explanations about his decisions. He reveals little to his 46,000 employees and even less to the press. (Years ago he rebuffed a reporter with a question of his own: “Are you people so fucking bored that you have nothing better to write about than us?”) Silence of this sort gives rise to a certain mystique, and with it, a powerful curiosity regarding his motives and intentions. Indeed, divining meaning from something as simple as buying a $1.70 ride on the Silver Line has become, for Johnson watchers, a kind of parlor game. Once when he transferred some Fidelity shares, a few observers took it as a sure sign of his impending retirement. That was in 1995.

Now, people are again speculating about the future of Fidelity, and there is an unprecedented urgency to their questions. More than just dominating its industry, the firm stands as one of the last homegrown titans Bostonians can still call their own. Whether it will hold on to either of those distinctions depends on a script that Johnson alone has the power to write. As usual, he isn’t talking, which, given the stakes for the city, makes his trademark opacity all the more vexing.

And yet. Maybe it is possible to divine Johnson’s grand plan. When dealing with a man who has built an empire on very calculated investments, as he has, it’s not crazy to think there might be hidden meaning in the purchases he has made with his fortune. And indeed, if you study a few of the things he’s bought for himself and his company, you find that they tell you this: Despite what the analysts may want him to do, Ned Johnson is plotting Fidelity’s future the only way he could be expected to.

1. Victory Banquet at the West Garden, $7 million

At a time when the average CEO stays in power less than 10 years, Ned Johnson’s 36 years at the helm of Fidelity is an epic accomplishment, the sort of reign that seems more fitting for a monarch than a businessman. Extending that metaphor is the absolute power he wields as head of a privately held company that’s been passed to him through his family. Add to that his own fascination with royal history, and the Johnson-as-king comparisons become downright inescapable.

A voracious art collector whose tastes (and $44 million collection) stretch from Norman Rockwell to Asian ceramics, Johnson has purposefully snatched up works that once belonged to kings and emperors, including $15 million of silver dinnerware once owned by the British crown, a cache he donated—anonymously, of course—to the Museum of Fine Arts in 2005. That same year, he stealthily added another symbolically potent piece to his collection, a work with a provenance he certainly would have appreciated.

The Christie’s auction house in Paris is in the heart of the Right Bank, between the Champs Élysées and the fashion houses of the Rue du Faubourg St.-Honoré. There, in November 2005, a small group of agents working for fabulously wealthy collectors from around the globe assembled to bid on an obscure 19-foot-long scroll once owned by one of China’s last emperors. Among them was James Hennessy, a London-based art expert who had been dispatched by Johnson. As the bidding began, a dozen or so of the auction-goers huddled over phones through which they received instructions from their clients. Hennessy, his mission clear, had no need to make any calls. Whenever a bid was placed, he simply topped it. Going into the auction, appraisers had estimated the piece might fetch as much as $1.4 million. When the auctioneer’s gavel finally pounded, Hennessy had won it with a record-setting bid of just over $7 million.

Called Victory Banquet at the West Garden, the richly colored scroll is made of silk and painted with gold, and depicts a feast celebrating a military triumph that expanded the kingdom of its patron. Even though the piece was more than 250 years old, it was in pristine condition, right down to the jade clasp that secured it in its red lacquer case. As amazing a treasure as the scroll was, interest in it reflected rarefied taste. “There is a group of 10 to 15 major collectors who will pursue a work like that,” Hennessy told me, suggesting Johnson’s motivation for purchasing art springs not from the pride of owning well-recognized pieces, but rather from some deeply personal desire. “Mr. Johnson is a law unto himself in what he chooses to pursue.”

It’s possible that Johnson was merely smitten with the scroll’s artistry, of course. But perhaps he also recognized something of himself in the biography of Emperor Qianlong, for whom the scroll was created around 1748. Like Johnson, for instance, Qianlong amassed a world-renowned art collection. Both men also had fathers who carefully groomed them from childhood to lead. (When Johnson was a boy, his dad took him on regular strolls along the beach. “We’re learning a lot about brokerage,” his father told a friend after one walk, “but don’t say that to Ned.”) And given the ch
ance, both men grew their empires ambitiously. Qianlong expanded his into one of the world’s largest. When Johnson inherited Fidelity from his father in 1972, the company had a respectable $4.3 billion under management in 17 mutual funds. Today, it controls $1.6 trillion in 436 of them.

Most intriguingly, Qianlong’s life also provides insight on the bedeviling subject of succession. After 60 years on the throne, Qianlong officially stepped down in 1795, passing his scepter to his son, but he never truly let go of power. As he continued to call the shots from behind the scenes, he made clumsy personnel choices, appointing corrupt lieutenants who siphoned the empire of its riches and its influence. When Qianlong died four years later, his son was powerless to stop the empire’s long decline.

Two days after Moody’s November report rekindled jitters over the long-term direction of Fidelity, the Wall Street Journal published a story detailing some of Johnson’s thoughts on the firm’s future. In an apparent effort to reassure worried investors, anonymous sources told the paper Johnson had discussed various succession ideas—if little in terms of a definitive plan. The bottom line, they admitted, was that nothing had been decided.

Holding on too long is exactly what Johnson has long said he’s determined to avoid. Fidelity, he promised recently, will be passed on “in good working order to the next generation of executives at the appropriate time.” But whether he fears that the heirs to his empire might unwittingly do it harm—or is still just in love with his work—he’s in no rush to hand over the reins. Johnson, a spokesperson told the Journal, remains “very energetic, very involved, and very much the leader.”

2. Beacon Hill Townhouse, $117,500

For nearly four decades now, Johnson, by far the richest man in Boston, has lived in the same spot on the flat of Beacon Hill. His three-story brick townhouse, one in a row of nearly identical residences, is set close to the traffic on Storrow Drive and not far from the antiques shops of Charles Street. (Johnson’s passion for collecting notwithstanding, he has stopped at a nearby Asian art dealer on only a couple of occasions. “He’s not a tire kicker,” says a clerk there.) When Johnson was younger, it was not uncommon for him to walk to his office on Devonshire Street in the Financial District. These days, he is more likely to get there by car. A silver Mercedes can often be found parked directly in front of his green door, bearing one of those three-digit license plates that some Massachusetts families pass down for generations as a subtle marker of status. The car itself is a model that would have cost Johnson about $50,000—at least, that was its sticker price three years ago, back when Mercedes stopped making it.

According to city records, there are four fireplaces and seven bedrooms in Johnson’s house, which he bought for $117,500 in 1970. Though it’s now worth $3.4 million, by the standards of his tax bracket it is as intensely modest as the Mercedes. Proud and stately, the house nonetheless stops short of calling attention to itself—a lot like its owner. When the place next to his was put up for sale in 2002, it was a trust controlled by Fidelity executives—and not Johnson himself—that bought it for $3.2 million, a tactic often employed by the wealthy in order to keep their names from turning up in public records, or to keep sellers from boosting their prices when they learn a billionaire is involved.
Johnson has seen his fortune skyrocket in the time he’s called this corner of Beacon Hill home, to the point where he could afford to live literally anywhere.

That he’s opted against trading up to a lavish compound in the suburbs makes sense to those who know him. “Ned’s the kind of guy who walks the walk,” a friend of his explained to me. “He’s all about investing and saving for retirement. The old story is he’d pay for a parking meter and walk 10 blocks to his meeting rather than park in a garage.” Still, there’s more to where and how Johnson chooses to live than mere frugality. He has the respect for history of a man whose family has been in the Boston area since 1635, and who—through his longtime support of the Society for the Preservation of New England Antiquities, for example—remains active in causes dedicated to honoring a bygone era. He seems to have instilled a similar sensibility in daughter Abigail, who is raising her children in the same Milton house where her father grew up, and where Johnson’s mother was raised.

Though Johnson’s Beacon Hill townhouse is no ancestral heirloom, it is still linked to a patrician spirit that he and his family have treasured for generations. Behind the high brick walls that enclose his backyard is a garden plot, part of a block-wide green space that he shares with his neighbors. It’s a verdant oasis, but to those with the sense to appreciate it, the place is something more, too. The garden was once the site of the grandest literary salons of the day, playing host to the likes of Ralph Waldo Emerson and Charles Dickens. Henry Wadsworth Longfellow, another guest, planted some of the garden’s shrubs himself.

As aware as Johnson must be of the luminaries who frequented this spot, he is equally inspired by the cautionary tales that played out on his property. There’s an old story he enjoys sharing about the land on which his home is built, and the memory of Sterling Elliott, who once owned it. At the turn of the 20th century, Elliott had more than 100 patents to his name, but the invention that seemed as though it would secure him lasting renown was his Addressograph, which stamped addresses on catalogs for mail-order companies like Sears. On the back of this machine, Elliott built a company bigger and more advanced than any other of its kind. Yet as Johnson noted in a 1996 essay he wrote for the American Academy of Arts & Sciences, the lesson Elliott provides is not in his rise, but in his lost legacy: For as powerful as Elliott was, his company was ultimately overtaken by its competitors. “Who today has ever heard of him or his Elliott Addressograph?” Johnson wrote. “Both are totally forgotten.”

3. There Will Be Dancing: The History of a Johnson Family, $22,000

In the early 1990s Johnson tasked Fidelity staffers with producing a book that would commemorate the company’s 50th anniversary in 1996. Upon starting the project, they quickly discovered that Fidelity’s story proved inextricable from that of the family. And so Susan Keats, the Fidelity vice president who spearheaded the book, wound up writing about the Johnsons instead. “It became evident that a history of the family was necessary to understanding the history of the corporation,” she explained in the preface to the first of what became a two-volume set. Its title, There Will Be Dancing, was itself borrowed from Johnson lore: It’s an allusion to Ned Johnson’s father’s instructions for the planning of his retirement party.

In 2000, Fidelity published 1,000 hardbound copies of the book’s first volume, followed the next year by an equal number of the second (a project that one printer estimates would cost around $22,000). Johnson had an additional 20 editions bound by hand in red leather. Across 800-plus pages filled with personal photos and biographical sketches of relatives, the book conveys just how tightly the family identity is wrapped up in their businesses. For generations, the Johnsons owned a downtown department store named C. F. Hovey (which was later sold to Jordan Marsh). Johnson’s father, Edward Johnson 2nd, broke with tradition when he de
cided not to join the family business, only to eventually start his own in Fidelity. Keats was impressed by the strain of entrepreneurial sense that runs through the clan—a sort of “unmapped gene,” she called it.

Less hereditary were the scholarly ways of Johnson’s father, who attended Milton Academy, Harvard, and Harvard Law. Never much of a student, Ned Johnson began his studies at Milton—where he once blithely pointed out to a teacher who had corrected his spelling that he’d always have a secretary to do his proofreading—before transferring to Tabor Academy in Marion. The Johnson-funded book mentions the switch, but not the reason for it, nor that he attended a third high school, the New Preparatory School in Cambridge. “It was sort of a cram school for Harvard,” says one of his classmates. “If you failed to get in on the first crack, this was the way to take a second shot at it.” While there, Johnson seems to have made little impression on his schoolmates. In the yearbook for the Class of 1950, a student named John Bilafer predicted where they all might end up. Some would be engineers; others would lead companies. Johnson, he ventured, would invent a new kind of tennis racket. (“He seems to have gone in a different direction,” Bilafer told me, laughing.)

At 20, Johnson finally headed off to Harvard, where he was known more for his new Oldsmobile than his intellectual prowess. After graduation, he served two years in the Army, developing a taste for riesling during his time in Germany. Once back in Boston, Johnson took a job working at State Street Bank, where he spent a short and unsatisfying stint filling out stock certificates before joining his father’s company.

Originally trained as a lawyer, the elder Johnson was so fascinated by investing that he used to paper the walls of his Ropes & Gray office with stock charts. This sideline as an investor made him the perfect choice to manage his family’s department store fortune. He began sinking much of it into a small mutual fund called Fidelity, and by the end of 1946 had taken full control of the investment vehicle. His ambitions were modest; he fondly referred to the young company as “my darling little trust fund.”

By the time Ned came aboard as a junior stock analyst in 1957, Fidelity had matured and was accepting money from non–family members. Any doubts about the younger Johnson’s proficiency were quickly erased, as he proved a natural stock picker. His father took notice. One Saturday in June 1964, Edward Johnson reportedly told Gerald Tsai, a sublimely talented investor who had mentored the younger Johnson in his early days, that Tsai would take over the company. By Monday, though, Edward made it known that he’d had a change of heart, “because of family,” he explained. The next year, Tsai sold back his $3 million stake in Fidelity and left for New York, where he became a billionaire investment wizard on his own terms.

One year around this time, Fidelity raked in a $5.5 million profit. The stunning gains actually embarrassed Johnson senior: Even though he’d opened the company to outside investors, he still saw it primarily as a kind of public trust meant to safeguard money, more akin to a nonprofit charity than a capitalist enterprise, and he didn’t think trustees should get rich off the fortunes they protected. “A company like ours should never make this much money,” he told his son.

Ned Johnson, though, understood Fidelity differently. He felt the firm was providing valuable investment advice to its customers, and that know-how was worth being paid for. When Johnson’s father turned over day-to-day management of Fidelity in 1972, he wanted to know that his son shared his sense of responsibility to the investors. He did, but he’d also inherited the capitalist streak that had made the family’s department store so profitable. “I don’t think Mr. Johnson would have built Fidelity, like Ned did, into what it is today,” Tsai, now 78, told me. “I don’t think he was interested in building a huge organization. Ned has that talent.”

As Fidelity has grown, one of Johnson’s chief challenges has been keeping the company operating according to the principles set out by his father. This is a duty he will pass on to Abigail, whom Johnson has groomed in much the same way he was. Johnson still retains both the CEO and chairman titles, and whispers within the company suggest he may be inclined to divide those posts between two successors. In this scenario, Abigail will become chair—a concession perhaps to those who question whether she has what it takes to steer the company alone—while the CEO post goes to someone else.

Last spring, in a rare moment of candor, Johnson talked in general terms about family businesses in an interview with the magazine Institutional Investor, saying that even when such companies rely on an outsider for day-to-day management, they still need family members in positions of prominence. They provide stability, he said, “and an ongoing philosophy or culture of doing things a certain way.” In Fidelity’s case, that’s the Johnson way. And Abigail’s unremarkable record as a stock picker aside, no other prospective chairman could understand the ins and outs of the Johnson way better than she.

4. Kaizen: The Key to Japan’s Competitive Success, $222

While on a trip to Japan in 1986, Johnson checked into the Okura, a luxury hotel in the center of Tokyo, not too far from the Imperial Palace. He’d ostensibly come to visit a Fidelity satellite office, but he was also interested in talking to some Japanese business leaders, whose efforts, particularly in manufacturing and technology, had made their economy the envy of the world. Johnson had been impressed with Japanese ingenuity for years. He considers himself something of an amateur photographer—a talent inherited from his mother, who had built a darkroom in the family’s Milton home—and he’d noticed back in the ’60s that Japanese cameras were not only better than their German counterparts, but also sold for half the price. He could never put his finger on how they were doing it. At a shop in the Okura hotel, he found the insight he sought in a thick hardcover called Kaizen.

The title refers to a Japanese management philosophy that emphasizes making constant changes on the path toward improvement. No task is too small for examination: “‘Kaizen‘ means that if you sweep the building, you always want to try to do a better job—and in a shorter time,” Johnson once explained. He took to the concept with characteristic verve, hiring the book’s author, Masaaki Imai, to lecture several hundred Fidelity executives, and later writing the foreword to Imai’s follow-up book, which included Fidelity as a case study. Johnson went on to commission a kaizen-focused orientation video for new employees, and had the Japanese characters for the word painted on a scroll, which was hung in the anteroom to his Financial District office. “[Kaizen] suggests that every aspect of a business needs to be improved,” he wrote in Fidelity’s 1987 annual report (the cover of which, too, was emblazoned with the characters for “kaizen”).

The philosophy was a perfect fit for Johnson’s personality. As a boy, he used to take apart clocks to figure out how they worked, and he peppered his family’s mechanic with questions about what each car part did. He brought the same curiosity to work, introducing a series of breakthroughs that expanded Fidelity’s business and appeal. It was his idea to start letting customers conduct business over toll-free 800 numbers, for instance, and to let them write checks out of their money-market accounts (two 1974 innovations that have since become commonplace in the industry). He also launched a number o
f sideline ventures, figuring that dabbling in other industries would help diversify Fidelity while providing a chance to learn management practices from outside the financial services world. The inspiration for his BostonCoach livery service, which Johnson founded in 1985, came from years of being unable to get a quick taxi from Logan. “The process of having an idea and operationalizing it is a very fun thing for Ned,” says a former executive. “For some guys it’s golf, for some it’s sleeping with women who aren’t their wives. For Ned, it’s this stuff.”

At Fidelity, the chronic experimenter has been known to hire two people for the same job and then let them prove who would work best. The concept of kaizen, not surprisingly, has also been trotted out as an explanation for any number of the company’s major shakeups: when the legendary fund manager Peter Lynch departed in 1990; when Johnson moved daughter Abigail from her post as president of the mutual fund division in 2005; and when Robert Reynolds, his longtime second-in-command, left last year. To replace Reynolds, Johnson lured back to the company an old friend and confidante, Rodger Lawson, who had previously worked at Fidelity some 16 years earlier. Shortly after arriving, Lawson pushed through the largest corporate restructuring in Fidelity’s history, splitting off some of its divisions and combining others in an effort to streamline the business. While Lawson was heralded as the point man in the overhaul, the shuffling was vintage Johnson.

Given that this is a man convinced that no detail is too tiny to worry about, it should surprise no one that Johnson’s blueprint for succession remains a work in progress, something prone to change, as one industry wag observes, “as quickly as the secret numbers to launch ICBMs.” Caught between his twin devotions—to his company and to his family—Johnson figures the person best fit to preserve the legacy of both is still himself. Until that changes, tinkering with a succession plan may well keep Johnson from feeling locked into one.

But the danger of constantly tweaking, of course, is falling in love with constantly tweaking. “Listen, he’s not a god. He’s very human, and some of the skills he lacks are detrimental to his being CEO,” says the former executive. “Decision-making can be kind of slow because the experiment is the thing. I always sensed some disappointment in him when we got to the solution, because the process of problem-solving was over.”

5. 268 Acres in Research Triangle Park, North Carolina, $19.4 million

Anyone who’s ever walked by Fidelity’s headquarters on Devonshire Street knows Johnson has not been particularly interested in building monuments to his achievements. The nine-story building, dwarfed by its neighbors, makes sparse use of signs. Two small bronze plaques that read simply “Fidelity Building” flank the entrance, harking back to a time when names on buildings were used merely to mark an address.

But Fidelity’s future lies in places far away from those roots. Today, only about one-quarter of its 46,000 employees work in Massachusetts, with the rest scattered among 10 regional sites across the country. In these far-flung addresses, on sprawling, manicured new campuses, Fidelity is becoming the company that Johnson will pass on. And Johnson, it seems, is allowing himself to indulge in some preening. The two roads that wind through Fidelity’s 14-year-old Covington, Kentucky, campus are called Magellan Drive and Crosby Parkway. The former honors the company’s flagship fund, once run by Johnson; the latter borrows Johnson’s middle name. Certainly not ostentatious, but still not the type of thing you’d ever see here in Boston.

In 2005, Fidelity began quietly hunting for a spread on which to build its still-unfinished North Carolina outpost, a search that it code-named “Project Ribbit” (a nod to the company’s frog-themed marketing campaign of the 1970s). The first task was finding out where Fidelity could negotiate the best tax incentives. When it purchased its Westlake, Texas, campus in 1999, the company decided to keep the herd of cattle that came with part of the property; one year, its two dozen longhorns made Fidelity eligible for a tax break (originally intended to help struggling farmers) that slashed its annual property tax on that section of land from about $300,000 to less than $1,000. This time, the company secured itself an even sweeter deal: Two years ago, after working with North Carolina officials, Fidelity made the single largest purchase in the history of that state’s Research Triangle Park business district, picking up 268 acres for nearly $20 million. Under the terms, Fidelity has to sink $100 million into a new complex hosting at least 2,000 jobs, but for doing so it will qualify for a hefty $69 million in tax incentives.

Though Johnson stayed in the background during the negotiations, it was clear that he was directing the effort. “He was in charge of the project,” says former state commerce official Tony Copeland. “All of the Fidelity representatives clearly indicated that he was the driver—in a positive way.”

As of this writing, the company has yet to file blueprints for its new campus, much less break ground. Employees who moved from Boston to North Carolina, where they now work in temporary offices, have taken to wondering about the delay. One story passed among them is that Rodger Lawson and Johnson disagree on how the building should look. Lawson wants something generic that they could someday rent out or resell, while Johnson, who has been known to involve himself in decisions as mundane as choosing light fixtures, is looking for something unique and grand. Something befitting Fidelity’s legacy. “The corporation has a chance of infinite life,” he once told an interviewer, noting that the people who run it don’t.

On one scouting trip Johnson made to inspect the land he was buying, the ever particular CEO is said to have flashed his penchant for details—and his dedication to shaping the parts of Fidelity that will outlive him. Walking the grounds, he came upon a muddy pond. It was new and man-made, still red from the North Carolina clay it was gouged into and looking nothing like a pond he’d ever seen in New England. Johnson stopped for a moment, and then turned to his companions. Could they figure out a way to dye the water a more pleasing color? How much would that cost?