Shareholder letters telling it like it is

What's in this crop of CEO letters to shareholders? The letters are sent alongside the company's proxy statement, which is filed with the Securities and Exchange Commission. Companies usually send them out in the spring because proxy statements are due within four months of every company's fiscal year ending.​ ​​

While most of them rightfully boast accomplishments and gains, some CEOs took the opportunity this year to shine a light on the not-so-great events of the past year.

Here are a few that caught our attention:

JPMorgan Chairman, President and CEO Jamie Dimon

The best of times, the worst of times: After a year marred by more than $20 billion in settlements and fines, much of it related to mortgage securities, Dimon takes the time to reflect in his letter to shareholders, comparing the banking behemoth's experiences last year to Charles Dickens' A Tale of Two Cities. "The bad news was bad," he wrote. "The most painful, difficult and nerve-wracking experience that I have ever dealt with professionally was trying to resolve the legal issues we had this past year." However, Dimon stressed that despite all of the negative, JP Morgan came out strengthened. And, despite the loss, Dimon's 2013 compensation package was raised to $20 million.

Berkshire Hathaway Chairman Warren Buffett

I make mistakes, too: Buffett may be one of the world's richest men, but his annual salary as chairman of Berkshire Hathaway is $1. And his annual letter has long been ​considered a must-read for all investors -- not just the ones the letter is addressed to. Although his letters are jam-packed with promising news and folksy, anecdotal advice to investors, this year's letter was humbled with his admittance that even the master of the investing universe can make mistakes. He acknowledged that both Berkshire Hathaway portfolio managers Todd Combs' and Ted Weschler's portfolios outperformed his. He wrote, "I must again confess that their investments outperformed mine. (Charlie says I should add 'by a lot.') If such humiliating comparisons continue, I'll have no choice but to cease talking about them."

Buffett also admitted to losing $873 million due to making a "big mistake" by purchasing Energy Future Holdings' debt. He wrote, "About $2 billion of the debt was purchased by Berkshire, pursuant to a decision I made without consulting with Charlie. That was a big mistake. Unless natural gas prices soar, EFH will almost certainly file for bankruptcy in 2014. Last year, we sold our holdings for $259 million. While owning the bonds, we received $837 million in cash interest. Overall, therefore, we suffered a pre-tax loss of $873 million. Next time, I'll call Charlie."

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Fairfax Financial Holdings Chairman and CEO Prem Watsa

Caveat emptor: Watsa's bad news doesn't exactly concern his company, a financial holding company that engages in property, casualty, and life insurance and reinsurance, investment management and insurance claims management. But he warned of bad tidings in the online technology industry. "There's nothing underlying the value of these companies," he wrote, in reference to Twitter, Netflix and Facebook. "The last time this happened was in the dot-com era. This will end in tears. ... If you thought that Twitter was grossly overvalued at $26 per share, it promptly doubled. This sort of speculation will end just like the previous tech boom in 1999 to 2000 -- very badly!"

General Electric CEO Jeffrey Immelt

It's the economy's fault: In commenting on the economy driving GE's somewhat positive results, Immelt makes a backhanded statement about the fact that while the economy may be improving, it's not quite there yet. He wrote, "Frequently, I tell investors that if we ever see a U.S. economy like the ones we had in the '90s, GE will have earnings upside. While we don't expect that soon, there are signs that the U.S. economy is getting a little better each day."

Wal-Mart Stores President and CEO Doug McMillon

But we're getting there: Immelt wasn't the only CEO to point out the past year's rough economy. Wal-Mart saw positive growth in 2013, but McMillon acknowledged that that growth was challenging. Still, he is quite hopeful for what's to come. He wrote, "While we certainly see areas where we can improve, it's also a reality that we faced some challenging consumer environments around the world. Both developed and developing markets grew slower than most people would have hoped for. The value we offer enabled us to grow share almost everywhere, and we're optimistic that conditions will moderately improve this year."

Sotheby's Chairman, President and CEO Bill Ruprecht and Domenico De Sole

Waging war: De Sole and Ruprecht, who oversee Sotheby's corporate art and private sales services, only released an announcement that the company is mailing its letter to shareholders, but it's already on the warpath. Investor Daniel S. Loeb's hedge fund, Third Point, recently sent out 30 pages explaining why it should win three seats on the auction house's board. In response, Sotheby's letter announcement read, "WE BELIEVE THIRD POINT HAS PRESENTED MISLEADING INFORMATION THAT DISTORTS THE REALITY AT SOTHEBY'S - As part of his solicitation efforts, Dan Loeb of Third Point has made a number of misleading assertions regarding Sotheby's and its strategic direction. Sotheby's strong financial and operating performance under the stewardship of your Board and management team demonstrates that Mr. Loeb's assertions lack substance." The announcement went on to list facts allegedly disproving Loeb's assertions.

IBM Chairman and CEO Virginia M. Rometty

Nothing but the facts, ma'am: Although Big Blue has struggled to maintain its relevance in a world dominated by gadgets, CEO Rometty had lots to say about the future of both software and hardware. But she did not shy away from facing the facts. "However, we must acknowledge that while 2013 was an important year of transformation, our performance did not meet our expectations," she wrote. "Our operating pre-tax income was down 8%. Our revenue in 2013, at $99.8 billion, was down 5% as reported and 2% at constant currency. So, while we continue to remix to higher value, we must also address those parts of our business that are holding us back."

Sears Holdings Chairman and CEO Edward S. Lampert

Don't look at us, look at our rivals: Lampert spent several paragraphs acknowledging Sears' "challenged" financial results, attributing many of the issues to a drastic change to the entire retail industry. "Nevertheless, 2013—especially the tough-to-terrible holiday season for Sears Holdings and for so many other retailers—brought into stark relief just how irrevocably retail has changed," he wrote. "The fact that many of us are not generating enough profit to meet the needs and expectations of our associates and our shareholders doesn't really matter to customers."

However, he didn't forget to include the misfortunes of other retailers, such as Amazon. "In 2013, Christmas Day fell on Wednesday," he wrote. "Most retailers—us included—couldn't promise in-time delivery of gifts purchased online the weekend before Christmas. Amazon, however, let customers order up through 11 p.m. Monday for in-time delivery. Then some of the gifts didn't get there before Christmas. Why they didn't get there doesn't matter as much as the fact that they didn't."

Amazon Founder and CEO Jeff Bezos

Don't let the door hit you: Although his letter to shareholders avoided mentioning that Christmas incident, sticking to the usual brags and positive outlooks, Bezos did include one thing that's worth mentioning: He's paying his employees to quit. Amazon doesn't want employees who don't want to be there, so Bezos is offering $2,000 to $5,000 to quit, depending on how long an employee has been with the company.