Buffett’s Letter to Shareholders

This weekend, Warren Buffett released his annual letter to shareholders. Buffett often uses the letter to opine on different business topics. Here he is on executive pay:

Comp committees should adopt the attitude of Hank Greenberg, the Detroit slugger and a boyhood hero of mine. Hank’s son, Steve, at one time was a player’s agent. Representing an outfielder in negotiations with a major league club, Steve sounded out his dad about the size of the signing bonus he should ask for. Hank, a true pay-for-performance guy, got straight to the point, “What did he hit last year?” When Steve answered “.246,” Hank’s comeback was immediate: “Ask for a uniform.”

Buffett also said that the board of Berkshire has chosen a successor, but won’t reveal his identity. However, in disussing business results, Buffett dropped a clue: “Credit GEICO — and its brilliant CEO, Tony Nicely — for our stellar insurance results in a disaster-ridden year,” Buffett wrote. “If you have a new son or grandson in 2006, name him Tony.”

Posted by on March 6th, 2006 at 9:38 am


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