Editor’s Note: This post is by Steven Kaplan of the University of Chicago.
I thought I’d mention two items on Warren Buffett’s views on executive pay. (Broc Romanek posted here on Buffett’s 2007 letter to shareholders. In that letter Buffett described current pay practices as “[i]rrational and excessive.”)
First, Berkshire Hathaway does not disclose what it pays its operating executives. I would be curious to know how much Buffett pays them. Second, Buffett was a strong supporter of Jim Kilts at Gillette. Kilts was paid highly for performance, created some $20 billion in value, yet was criticized in some circles for being overpaid because he received over $150 million. I happen to agree with Buffett that Kilts should have been congratulated rather than criticized.