For all his complaints over the tax code and Wall Street fat cats, Warren Buffett certainly isn’t shy when it comes to paying his top executives a boatload of money. In typical investment bank fashion, Berkshire Hathaway (NYSE:BRK.A, BRK.B) compensates its talent very, very well.
BusinessWeek reports that, “Berkshire gave $17.4 million in 2011 compensation to Thomas P. Nerney, CEO of its United States Liability Insurance Group; $12.4 million to Geico Corp. CEO Tony Nicely and the National Indemnity Co. unit gave $9.26 million to Ajit Jain, according to filings to state regulators.
Of course, Buffett’s salary remains at just $100,000 per his request. But his cohorts appear to be eager for “fair” salaries — at least fair by Wall Street standards.
Berkshire CEO Warren Buffett has long spoken out on greed. He blamed banker greed for a large part of the financial crisis, and has famously refused to leave his fortune to his children. Instead he has provided them modest trust funds and maligned the so-called “lucky sperm club” where heirs and heiresses are born into a life of privilege (and often excess) that they may not deserve.
It’s worth noting that the cost of living in Omaha, Nebraska, is remarkably more affordable than the high-priced financial district of New York. But that cost of living argument apparently hasn’t been factored in.
Ironically, JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon — who has been vocal in his support for the wealthiest 1% and the need for less taxes, not more, on top wage earners — praised Buffett’s pay practices. Dimon said recently the top 20 or so people at Berkshire make more than the biggest earners at JPM.
So is Buffett out of character here or just in-step with typical practices? According to one BusinessWeek source, it’s much simpler than that:
“Whether it’s Warren Buffett or Jamie Dimon, they all pay a lot,” said Charles Elson, director of the University of Delaware’s Center for Corporate Governance, told the magazine. “Pay is out of control everywhere.”