Buffett: I Paid Two Execs $75 Million
Warren Buffett said that his Berkshire Hathaway investment firm employs two executives who split $75 million in compensation last year, according to the transcript of a Fox Business Network interview with Buffett, Bill Gates and Berkshire vice chairman Charlie Munger that aired this morning.
Buffett, asked about executive compensation by interviewer Liz Claman, said: "And incidentally, we don't mind paying -- we pay in eight figures for certain people and we don't mind it at all. We worked out a contract a few years ago where two executives split $75 million and they…"
Claman interrupted: "Whoa."
Buffett replied: "Believe me we got our money's worth."
Shares of Berkshire Hathaway lost 30 percent of their value in 2008, which is still pretty good compared to the broader S&P 500, which lost about 38 percent of its value.
The company held its annual shareholders meeting Saturday in Omaha, Neb.
Buffett gave a tutorial on the way chief executives run roughshod over their board's compensation committees:
"Basically the CEO picks them. And he cares a whole lot more about who is on the comp committee than he cares about the audit committee. Put me on the audit committee or on all these other committees. But the comp committee, there's never been a CEO that I've seen that doesn't -- can't name every member that's on the comp committee and didn't really approve of them.
And then, you know, the CEO cares enormously about it. He has got all of these comparisons that keep ratcheting up. And the human relations director comes in and the human relations director works for the CEO and pulls out the appropriate -- supposedly appropriate comparisons -- and then they bring in a consultant who is hoping to get more consulting jobs."
Claman asked the three what they think of the future of the embattled newspaper industry:
Munger: “We have some things we're faithful to…we're married to these things and we will play out the hand.” (Berkshire Hathaway owns the Buffalo News outright and is the largest non-family shareholder of The Washington Post Co. Buffett is a Post Co. director, as is Melinda French Gates, Bill Gates's wife.)
Buffett: “At our age, we have to be somewhat tolerant of declining curves to say that. We think a body in decline is to be admired.” (Thanks, Warren.)
Gates: “Washington Post of course is a great company with the newspapers and many other things and they're, now, looking at how they can move into the new world. They're doing some very interesting things. Buffalo News, I think, has handled the challenges working with their unions, figuring out how to push forward as well as any newspaper company."
When asked about the successor to Buffett, who is 79 this year, Munger replied: “Well, personally, I would like him to be as close to Warren as we could get. But it may well be that the new CEO will be better than Warren in some ways and inferior in others. In fact, I would regard that as inevitable.”
May 4, 2009; 3:44 PM ET
Categories: The Ticker | Tags: Bill Gates, Charlie Munger, Melinda French Gates, Warren Buffett, Washington Post
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