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Warren Buffett Watch
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Warren Buffett's performance vs. pay ratio, already enormous by Corporate America's standards, got even more impressive in 2007.
In a SEC filing ahead of Berkshire Hathaway's annual meeting in early May, the company lists an annual salary of $100,000 for its Chairman and CEO. That's unchanged from last year, and according to the filing, "Mr. Buffett’s annual compensation has been $100,000 for over the last 25 years and he has advised the Committee that he would not expect or desire it to increase in the future." (Berkshire's Chief Financial Officer Marc Hamburg gets a much bigger salary than his boss at $712,500 in 2007, up a bit from $662,500 the year before.)
In 2007, Berkshire shares had their best year since 1998, gaining 28.7 percent, while the S&P advanced by 3.5 percent.
By my (admittedly simplistic) calculation, expressing salary in millions of dollars as is the custom for most big-time chief executives, that makes his 2007 performance/pay ratio:
(28.7-3.5)/0.1 = 252
That's up from 105 in 2006, and far exceeds a 'shocking' -22 in 2005, the most recent year in which Berkshire didn't beat the S&P.
As the AP notes in its story about the Berkshire filing, it's easier to figure out exactly how much Buffett is paid compared to most of his fellow CEOs because, in contrast to the normal C-suite custom, he doesn't get any bonuses, stock options, executive perks, deferred compensation, or other fancy compensation complicaters.
Of course, it's clear that the world's richest person isn't living off that $100k salary alone, (or probably at all), and it isn't what brings him into the office each morning.
Instead, he's working to increase the long-term value of Berkshire stock, making both his shareholders, and himself, very wealthy over the years.
Current Berkshire price: [US;BRK.A
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- Exec Who Could Replace Buffett Says CEO Shift Unrelated to Berkshire's Succession Plans (March 12)
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- Warren Buffett Answers Your Emails: Download the Full CNBC Transcript (March 7)
- Warren Buffett Jokes to CNBC: I Passed Gates on Wealth List Because I "Spend Less" (March 6)
- Warren Buffett Named World's Richest Billionaire By Forbes (March 5)
- Warren Buffett to CNBC: U.S. Economy in Recession By "Common Sense Definition" (March 3)
Data is a real-time snapshot *Data is delayed at least 15 minutes