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A stirring
May 5, 2003 11:17 AM   Subscribe

Warren Buffett calles on investors to rise up and revolt over colossal executive pay packages. “I am not for the Bush plan. It screams of injustice. The main beneficiaries will be people like me and Charlie,” he said, referring to the Berkshire Hathaway vice-chairman Charlie Munger. Mr Buffett said the tax plan was equivalent to “us giving a lesser percentage of our incomes to Washington than the people working in our shoe factories”.
posted by The Jesse Helms (14 comments total)

 
The OTPP (Ontario Teachers' Pension Plan) comptrollers have also been protesting the grotesque pay packages. They, and a handful of other institutional investors, are about to give the board of directors of Magna Intl the boot, for rewarding their CEO with a $30M package.

I'm hoping we'll start seeing directors back away from the trough. Money needs to be invested in improving companies' bottom lines, paying employees fair wages, and returning some amount of profit back to shareholders.
posted by five fresh fish at 11:26 AM on May 5, 2003


I always liked Warren Buffett. I wonder if he would adopt me.
posted by MetalDog at 11:27 AM on May 5, 2003


Who's this Buffett guy? A fuckin' commie???

In other news,
According to a survey of 3,000 discharged managers and executives by the consulting firm Challenger Gray & Christmas, median severance pay during the first quarter of this year was ten weeks--less than half what companies paid in 1999
posted by matteo at 11:31 AM on May 5, 2003


I'm confused. Is this post about executive pay or Bush's tax cuts, or both?
posted by ZenMasterThis at 11:46 AM on May 5, 2003


He may be the second richest man in the world, but you won't find him among the top 60 American philanthropists. And this Berkshire profile says it all: "Berkshire Hathaway's aggressive acquisitions may lead to large profits, but the employees of its subsidiaries are routinely subjected to major downsizing plans in the quest for ever-larger profits. Employees of World Book, for example, report that the staff there has been decreased by more than 80 percent in a recent one and a half month period. As a result, employee morale at many BH companies has "plummeted." Those who do stay receive "acceptable salaries" but "paltry benefits," according to one See's Candies employee."

The sanctimonious fuck might want to practice what he preaches.
posted by ed at 11:51 AM on May 5, 2003


Buffett's full of it.

While he publicly rallies against executive compensation, Buffett does nothing to reduce or control the compensation of two CEOs of companies in which he has a significant stake. Doug Daft and James Kilts are every bit as overpaid as the rest of them.

And let's not forget his purely altruistic and benevolent opposition to the estate tax.
posted by trharlan at 11:53 AM on May 5, 2003


Buffet is a very smart, shrewd character. Most of the public statements he makes are attempts to move markets in directions favorable to his holdings. (Many times it doesn't work, but now and then it actually does ... he's one of the very few individuals on earth capable of single-handedly affecting global markets).

Anyone, however, that believes his position on the Bush tax plan, or executive compensation (or any other damn thing he talks about) is motivated by his deep love for the workin' man in "shoe factories" ... is probably a tad naive.

ed ... he'll never practice what he preaches, because he is not (and never will be) expressing genuine personal opinions - he makes very calculated, emotionally charged statements for the sake of specific business goals.
posted by MidasMulligan at 12:35 PM on May 5, 2003


So, he's going for the social-conscious investment money here, bringing in the dividend seekers, or are rich tax-cut folks not buying enough world books these days?
posted by mblandi at 1:04 PM on May 5, 2003


More than likely, he believes that cutting the federal revenue base while deficits are ballooning is bad for business. Whatever his motivation, maybe this will encourage some other business leaders to take another look at the Bush plan to judge whether it is the best course of action right now.
posted by psmealey at 1:14 PM on May 5, 2003


I'm guessing that the Twatfart of Tulsa didn't get that Ambassadorship to Switzerland like he was hoping for. Oh George, you bitch!

That said: even a staunch capitalist like myself can agree that truly exorbitant CEO pay hurts the company; financially in down times, public-relations wise everytime else. No one's saying that CEO's can't make a few bucks; but nightmares like the American Airlines fiasco? They'll NEVER recover from that, and they deserve not to. Dumbasses.
posted by UncleFes at 1:27 PM on May 5, 2003


Stunning. If poor or middle-class people say the estate tax is unfair, or the Bush tax plan a bad idea, or that corporate CEOs suck up huge sums of money even during periods of negative returns and massive layoffs, you tightie-righties will howl "class warfare" and "jealousy!" But when a guy who craps more than the combined GDP of all of Metafilter says the same things, it's dismissed as a mere lie to benefit his holdings. I need to know, for my own dwindling sanity: Is there ever any circumstance in which a criticism of Bush, of tax cuts for the wealthy, or the estate tax can be considered on its merits alone, or even as ever valid at all, without some half-baked reason for it being dismissable? Whores! What unbelievable whores for the powerful and wealthy you people are! Do you suppose that ferocious liplock you've maintained on the throbbing cock of wealth entitles you to cash in the gilded jism collected in your cheeks for a big fat swiss bank account and a life spent hobnobbing with the hoi polloi on the French Riviera?

Aw, fer chrissakes, I bet someone's gonna MeTa that, too!

And let's not forget his purely altruistic and benevolent opposition to the estate tax.

From your linked article: Gates Sr. is co-chairman of the Bill and Melinda Gates Foundation, an entity that exists mainly to keep Gates III's fortune out of the hands of the tax collector.

Such credibility in that article... Gates has put $25 billion into that fund, but we're supposed to believe it's mainly for tax purposes? I suppose if you were a heartless Conserva-fascist, you'd never see any purpose to charitable giving, except as a tax dodge. Genuine compassion is an alien concept to many, apparently. Yeah, this is an unbiased article. Oh, lookie here, it's from the National Center for Policy Analysis- yeah, they're really non-partisan, with all their funding from the 4 sisters. Snark, snark, snark.

MM: he's one of the very few individuals on earth capable of single-handedly affecting global markets.

One of the others presumably being our own MidasMulligan. Tell Warren I said hi, big spender. ;)
posted by hincandenza at 1:53 PM on May 5, 2003


the hoi polloi

I believe the "the" here might be redundant, as "hoi" is greek for "the". Then again, perhaps only linguistic conserva-fascists would argue against what is undoubtedly a common usage among hoi polloi.
posted by jeb at 2:31 PM on May 5, 2003


More than likely, he believes that cutting the federal revenue base while deficits are ballooning is bad for business. Whatever his motivation, maybe this will encourage some other business leaders to take another look at the Bush plan to judge whether it is the best course of action right now.

Most business leaders understand fully how much Buffet's continual public pronouncements are worth.

That said: even a staunch capitalist like myself can agree that truly exorbitant CEO pay hurts the company; financially in down times, public-relations wise everytime else. No one's saying that CEO's can't make a few bucks; but nightmares like the American Airlines fiasco? They'll NEVER recover from that, and they deserve not to. Dumbasses.

The market for CEO's is a labor market like any other. There's a number of tiers of players, and very few capable of leading a giant multi-national - especially in an industry that is in the midst of a terrible cycle (due to a down economy, overcapacity. terrorism, SARs, and the whole 9 yards). Carty was wrong not to disclose his compensation during contracts talks, but the board probably wasn't wrong to give him that compensation. Carty took over in 98, and under him AA became the world's largest airline.

After 9/11, and with a crashing economy, a number of the most senior AA execs were leaving. Three of the top eight officials listed in the 2001 proxy statement have retired, and a fourth, Chief Financial Officer Tom Horton, left for AT&T Corp. The retirement of Executive Vice President Mike Gunn at age 57 caused other 50-somethings at American to question whether they should leave before the company's finances worsened. A pile of vice presidents crucial to the operation of the airline were at retirement age and considering leaving, including executives in maintenance, safety, flight operations and other areas.

Three of the top eight officials listed in the 2001 proxy statement have retired, and a fourth, Chief Financial Officer Tom Horton, left for AT&T Corp.

In fact, the Sept. 20 retirement of Executive Vice President Mike Gunn at age 57 caused other 50-somethings at American to question whether they should leave before the company's finances worsened. A slew of vice presidents crucial to the operation of the airline were at retirement age and considering leaving, several people said, including executives with vital duties in maintenance, safety, flight operations and other areas.

Carty thought he needed them guys to try to save the company, so he offered retention bonuses to get them to stay through 2004-2005. Because the pension trust was funded in October, American didn't have to disclose it until the company reported its year-end results.

Carty knew that disclosing the executive benefits could doom ratification voting, but also knew workers would face deeper pay and benefit cuts in bankruptcy court. Lenders who had agreed to provide debtor-in-possession financing already had said they would want $500 million in additional labor savings. That meant American would lay off about 10,000 more employees than it plans to under the voluntary cost-cutting programs.

So he made a mistake, and paid for it. But the mistake was non-discolsure, not the compensation itself (and in fact the packages the AA guys got is less than Delta or Continental).
posted by MidasMulligan at 2:37 PM on May 5, 2003


Buffett = g0d
posted by VeGiTo at 6:23 PM on May 5, 2003


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