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TOKYO—Investors cheered the decision by Masayoshi Son, chief executive of SoftBank Group Corp., to stay at the helm of the Japanese internet and telecommunications giant for years to come.

SoftBank's shares gained 2.6% Wednesday after Mr. Son said Tuesday night that Nikesh Arora, a billionaire former Google Inc. executive and heir-apparent to Mr. Son, would step down as president, and that Mr. Son would continue to run the company.

Shares of Sprint Corp., the struggling U.S. wireless carrier that SoftBank acquired in 2013, gained nearly 8% overnight.

The responses underscored confidence in Mr. Son, the 58-year-old visionary founder of SoftBank, whose unexpected turnabout on his succession reflects the difficulty founders often face when trying to hand over the reins of their companies to outsiders.

The 2,000-plus shareholders gathered at SoftBank's annual general meeting Wednesday welcomed Mr. Son's decision to stay on. Some called for him to keep working until he is 200 years old.

Mr. Son said he reached the decision several weeks ago, after seeking the consultation of fellow billionaire founders Tadashi Yanai, chief executive of apparel retailer Fast Retailing Co., and Shigenobu Nagamori, chief executive of precision motor maker Nidec Corp. Both are external directors at SoftBank.

"I told him you must be kidding to be thinking of stepping down when you're not even 60," Mr. Yanai said.

Mr. Son has garnered much respect over the years as he built SoftBank into one of Japan's largest mobile-phone service providers, while creating an investment company with a sprawling portfolio that includes significant stakes in Chinese e-commerce behemoth Alibaba Group Holding Ltd. and Japanese internet portal Yahoo Japan Corp.

In recent years, though, Mr. Son had begun pondering his succession, and wooed Mr. Arora from Google two years ago with that in mind. Mr. Son named him as likely successor last year, giving him the No. 2 spot.

Mr. Arora had faced criticism from investors over questionable investments as well as his compensation and qualifications. But Mr. Son said that played no role in his departure.

While Mr. Son had repeatedly said he planned to retire in his 60s, he hadn't given a specific deadline. On Tuesday, he and Mr. Arora revealed the two had agreed that if Mr. Son was satisfied with Mr. Arora's performance, Mr. Son would consider giving him the top job when Mr. Son turned 60 next year. But as that milestone approached, Mr. Son had a change of heart.

"We had these discussions five or six weeks ago, and we went back and forth," Mr. Arora said. "And for me it was a choice of, 'Do I keep doing this after he declares that he wants to be CEO for another five to 10 years?'"

Mr. Son said Wednesday he regretted having to let Mr. Arora go, but wanted to keep working for a while longer.

"I didn't want an old man who is nearing 60 to be a bottleneck to the company's growth," the 58-year-old said. "But then I became greedy and realized I haven't had enough."

Messrs. Yanai and Nagamori have also faced the succession question.

Mr. Yanai, the 67-year-old boss of the popular fashion brand Uniqlo, had himself attempted to hand over the reins to someone else—only to take charge again, unhappy with how the company was being operated without him.

Mr. Nagamori, 71, noted during the shareholder meeting that age didn't mean a lack of competence. He cited himself as an example and said he had believed for some time Mr. Son wouldn't quit at such a young age—a comment greeted with applause.

But in a reflection of how delicate succession can be, Nidec lists "Dependence on Shigenobu Nagamori" in earnings reports as one of its "business risks."

Takenobu Miki, a former secretary to Mr. Son and now head of consulting and investment firm Japan Flagship Project Co., has said one of his first assignments from Mr. Son was to research the history of one of Japan's oldest conglomerates, the Mitsubishi group, and to list factors that catapulted a startup into a multinational empire with a history of more than 100 years.

"From the beginning, Mr. Son was worried about how to ensure the company would grow when he was gone."

Management of the company has gone back to SoftBank veterans. Ken Miyauchi will assume Mr. Arora's title of president and chief operating officer, the company said Wednesday. Mr. Miyauchi heads the domestic mobile operations and has worked with Mr. Son for more than three decades.

Mr. Son said Ron Fisher, a SoftBank director who has been with the company for two decades, will fill Mr. Arora's role as head of SoftBank's Silicon-Valley-based overseas investment operations.

"I don't want to be an old guy who is a drag on the company, but my decision now is to remain chief for another decade or so," Mr. Son said.

Write to Alexander Martin at alexander.martin@wsj.com and Mayumi Negishi at mayumi.negishi@wsj.com

(END) Dow Jones Newswires

June 22, 2016 05:55 ET (09:55 GMT)

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