Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won't change, moreover, because the deck is stacked against investors when it comes to the CEO's pay. The upshot is that a mediocre-or-worse CEO - aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo - all too often receives gobs of money from an ill-designed compensation arrangement.
Interpretation
Executive pay often does not match company performance, leading to unfair compensation.
Warren Buffett highlights a critical issue in corporate governance where executive compensation frequently fails to reflect actual performance. He asserts that the system is rigged in favor of CEOs, allowing even mediocre leaders to receive substantial financial rewards, often through poorly structured compensation packages that benefit executives more than shareholders or employees.
In practice
This quote can be used in a discussion about corporate accountability at a shareholder meeting.
I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money and there will be a lot - and it's a lot - it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that.
If the world couldn't see your results, would you rather be thought of as the world's greatest investor but in reality have the world's worst record? Or be thought of as the world's worst investor when you were actually the best?
Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than resting comfortably in someone else's.
I think you should read everything you can. In my case, by the age of 10, I'd read every book in the Omaha public library about investing, some twice. _x000D_ You need to fill your mind with various competing thoughts and decide which make sense.
The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
One’s objective should be to get it right, get it quick, get it out and get it over. Your problem won’t improve with age.
Know your numbers' is a fundamental precept of business.
We must learn what customers really want, not what they say they want or what we think they should want.
One of my business partners would remind me that no fashion line lasts forever, that we would hit the down curve eventually, and that we needed to look for new brands that complement the first one.
The extravagance of any corporate office is directly proportional to management's reluctance to reward the shareholders.
Most business models have focused on self interest instead of user experience. Those are the kinds of problems we solve to solve.
I've said it for four decades - work 'on' your business, not just 'in' your business!
Subscribe for the occasional hand-picked quote. No noise.