We know it is part of his folksy-shtick to play the boy from Omaha made good. (Real good). Be this as it may, something feels wrong with the datapoints plotted by three paragraphs in the DealBook’s review of Buffett compensation:
Mr. Buffett has been an outspoken critic of huge executive compensation packages at other companies. In keeping with that philosophy, his own company does not award large pay packages or give out stock options.
[...]
Forbes valued Mr. Buffet’s net worth at $37 billion, $25 billion less than just a year earlier, when the magazine estimated he was worth $62 billion.
[Charlie Munger's] net worth fell to $1.4 billion, from $2.4 billion a year earlier, according to Forbes.
Isn’t just a little too easy to be critics of executive compensation when you’ve got this much sitting in the PA?
Yes, yes, we know that Buffett has gone to great lengths to give away the vast majority of his holdings over time. It still strikes us as a bit… off.
No Bonuses Here: Buffett Is Paid Just $175,000 [DealBook]
EP, I sense a bit of hypocrisy in your post. Buffet has been an outspoken critic of huge executive compensation packages at companies where compensation is not driven by long-term performance of the company. Correct me if I’m wrong but Buffet took control of BRK with proceeds from incentive comp from his LP days (he charged 0% management fee by the way), which was purely driven by performance generated for his investors.
Majority of his wealth today came not from golden parachutes, options, cash bonuses and etc. but from investing into his company and growing it for his own and his investors’ benefits.
What is wrong with him criticizing incentives which are not linked to the maximizing of shareholders’ wealth?
Grow up EP.
1, wrong. Buffet is also for outright redistribution of income – the reason why he frequently brings up the ‘me vs my secretary’ tax argument.
Wanna see true equality? Lets start taxing wealth. Taxing income doesn’t prevent a plutocracy. It rather entrenches it. Lets start progressive taxation of wealth with anything above $100MM taxed @ 20% annually. Then we’ll see how much Buffet supports ‘progressive taxation.’
@1&2 What? The post is asking, “isn’t a little bit easier to criticize executive comp when you have such a large fuck-ton of money that nothing can touch you?”
I’m sorry, the answer is clearly yes, regardless what you think about Buffet. He is so stinking rich that no tax, investment loss, or charitable donation he makes will ever impact his life in anyway. That makes taking the high road a little easier.
@1, he charged a huge fucking carry though..something like 50% over a 4% hurdle
A few thoughts from another Omahan that has followed Warren over the years. He talks about the need for the rich to pay higher taxes, yet (1) he pays almost no income taxes since he keeps his compensation so low;(2) he rarely sells any of his stock holdings in Berkshire, other than gifting it to charities, so he pays little or no capital gains taxes; and (3) his estate plan has most of his holdings being donated to charities, which will then sell the holdings, so he will owe little or no estate taxes. For someone who talks about the need for the rich to pay taxes, he does his best to minimize the amounts he pays.
O^3 has jumped the shark.
How do you go from Dairy Queen and underwear to writing naked puts on the market in SIZE?
I think he’s out of his league, and he’s on his way down to earth.
If he fucked up as badly earlier in his career, we’d have never heard of him.
is O^3 too big to fail?
@1/2 – when you have f-u money in the bank and about 10 – 20 years breathing years left (not rooting for his demise, just being realistic) it’s real easy to talk about taxing the INCOME of the rich and executive comp. don’t get it twisted. in fact, I’d say he’s a bit hypocritical.
Yeah, why should the rewards go to the people who supply the capital instead of employees with no downside risk!?
Wait, what?
@1 here – so reap me apart……….
@5 – I believe it was 25% over the carry.
@6 – if he is not recognizing any income why would he be paying any taxes?????? He is not benefiting from paper wealth anyway.
@cluzo – go back to his letters, he’s saying the same thing since the 70s (80s for sure).
OK…Lay off Buff, he is giving the WHOLE THING away. Might be the greatest human being ever.
DAG
#3 WRONG. Buffet supports estate taxes. He knows and always points out that “income” tax doesn’t apply to the rich.
DAG
12, Buffet ALSO supports estate taxes. And no, he has explicitly advocated higher income taxes regardless of what he recognizes.
Also, being pious about everything is easy when you are sitting on a$$tons of wealth. If he were even remotely honest then he would pay himself a salary that was suitable according to his lifestyle. $100k does not, I repeat DOES NOT get you the life that Warren Buffet leads. His life is based on his assets and he uses the low salary stick to beat upon others.
Also, he is ‘giving the whole thing away’. Really? Well lets see. He is already north of 70. Why then is he waiting to give it all away? Isn’t there already sufficient misery in this world?
So why is it that all the wealth is to be given after his death? It can either be
a) that he want to remain ‘wealthy’ till the day he dies and ten of course doesnt give a flying fck about what happens aferwards or
b) he believes that he can maximize the amount if he keeps it with him.
But if b) then it means that wealth should be kept in the hands of those most capable of enhancing it and be redistributed when they so wish. Isn’t that directly against the idea of forced redistribution?
Hypocrisy on multiple levels here. Is he a great investor? Sure. But when did being a great investor prevent people from being hypocritical douches?
@13 buy a compass you clueless lost soul
@4 – according to your theory – people with fukc you money dont care about taxes, investment losses, or charitable donations ?? WAKE UP YOU IDIOT – GET TO THE CHOPPER!!!
@9 – agreed – plus the envy of many people that Buffett doesnt need to spend a fortune on a bar mitzvah in order to live comfortably
@13 bravo
There’s a difference between being an owner and being a manager. Deal with it.
Another idiotic Dealbreaker thread started by EP.
He has been consistent on this point since before he had anywhere near this money, so cork it.
@5 – wrong.
@6 – go read the part of the recent CNBC transcript where he addresses that point.
@7 – Buffett is the best there ever was, so to say he’s out of his league with anything he does is retarded, especially when you consider he goes out of his way to take on weak opponents – like the kind that are willing to enter into multi-year derivative transactions where he gets all the money up front and has minimal to zero posting requirements.
Lastly, when he was running his partnerships he didn’t just take a piece of the upside, HE TOOK A PIECE OF THE DOWNSIDE. I challenge all the whining bitches to name one other hedge fund manager who is man enough to do that.
Poor posting this is
This is a poor posting
We are in an economy where
you shouldnt have to dig too hard
for stories.
This story is a little far fetched
were you looking to just mention
Buffett’s name no matter what??
Once again, I see that the Buffet groupies are avoiding the key point.
Why does he have the billions of dollars locked up under his control when there are like hundreds of millions of people going hungry / diseased and dying in this world?
Fuck the world even in this country there are many people in dire straits. So why is Warren Buffet – the anti plutocrat – sitting on so many billions?
The answer will reveal the true problem with redistributive taxation. Something that all you folks are trying to avoid internalizing.
my feet smell like Erin Burnett’s hoo hoo tonight…
you’re really fucking terrible EP
Listen to the s–t-eaters go.
If you have a problem with exec. compensation, why don’t you give all your money to the poor toDAY???????????????????
Great point there, s–t-eaters.
22, at least sht eater seems to have some thinking powers. You apparently dont.
The discussion started from Buffet being paid ‘only’ $100k and then went on to Buffet’s views on taxation.
The simple point is that IF Buffet was really sustaining himself on the $100k salary and he really did believe in his enti-plutocratic views – then he would live ONLY on his salary and donate most of his wealth (before his death) to charities and manage that money for them.
The matter of fact is that
1) he does not live (or want to live) the 100k life and
2) he either loves being a plutocrat or beleives that he is more productive than others and hence needs to keep all that wealth under his control to maximize overall wealth
Overall, all of the above point to rank hypocrisy. Unfortunately, his being a successful investor and a rich guy and at the same time preaching redistributive philosophy has convinced you that you need not take his cock out of your mouth for a second to think rationally.
@ 23 – what do you know about how Buffett lives his life – He lives in the same house he bought decades ago -many of the trips and seminars he attends are paid for by the hosting organizations in many cases including CNBC. Before the media picked him up to tout wall street he would stay at friends houses in NY and DC whenever he traveled.Is this man capable of living within his 100K salary in Omaha? Absolutely.
Envy and jealousy won’t get you there.
@24. He might stay at friends’ houses, but he travels there in a corporate jet he named “The Indefenceable.”
Why does it have to be black-or-white? We seem to think that he’s either the saint that his PR machine makes him out to be, or that he’s a hypocrite. Why can’t he just be a pretty good guy who lives fairly modestly given the massive amount of wealth at his disposal?
24, Where did you sense envy or jealousy? The man earns his money and he has every damn right to do whatever the hell it is that he intends to do with it!
The problem is that he possesses and expresses strong views on how government needs to institute taxation policies to negate the rise of a plutocratic society. The way he himself is the second biggest plutocrat in this country shows him up as a rank hypocrite. Plutocracy isn’t defined by rampant or flagrant demonstration of wealth. It is defined by disproportionate accumulation of wealth within a few hands.
Also, some people like #11 think that his pledge to give away all the money after his death makes him a great guy. I still do not see any answers from all you Buffet groupies to a simple question. Why is he sitting on so much money if he is and he believes in what he says should be – that no one should be allowed to accumulate disproportionate wealth?
The solution to all this is simple. Do away with the income tax sht and institute a wealth tax. It is as progressive as progressive can be – poor people have no assets and hence will owe nothing. Also, the more assets you own the more you need a structured society to guarantee those.
That alone will bring all these phony ‘we love more taxes and redistribution’ bitches back to planet earth. It is easy to call for crazy income taxes on people earning $250k when you are sitting on a couple hundred million under your ass. Kind of convenient too – making sure that no one gets to where you are.
Oh, and lets have this wealth tax in their lifetime instead of after their deaths. That should significantly cut down the amount of pious BS.
26- Interesting point. However, regarding your next to last paragraph, keep in mind that it is extremely difficult, even under Bush level income taxes, to accumulate a large fortune through ordinary income. Capital gains, preferably deferred for years until the sale of an asset, is the tax that an aspiring mogul should be trying pay.
@3: Bingo.
“If he fucked up as badly earlier in his career, we’d have never heard of him.”
Compounded investment returns don’t follow the commutative law in the real (reflexive) world. The fact is, scoring early is worth far more than scoring late. Why? Better deals, better people, better ideas flow your way when you are seen as a winner. And especially when you have the cash. This tends to reinforce those early returns. (Tends: Plenty of first-time winners screw up, of course, but most first-time losers are never heard from.) Imagine a hockey game where the first goal counts for five points, the second for three, and all subsequent goals for one.
There are plenty of potential Buffetts out there that we’ll never know.
Thank God.
Actually the whole “taxing wealth” thing isn’t such a bad idea. You’re allowed to accumulate 1 or 2 million, then above that you get hit with a 25% annual tax. This would encourage people to either:
a. spend it on something and keep cash flowing, benefiting businesses or
b. use it to actally solve some of the world’s suffering directly
Honestly, what’s the point of sitting on all that cash, other than rubbing it in the face of your fellow man?
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