Crony Capitalism and the Oracle of Omaha

我回到了内布拉斯加州奥马哈，我的大脑仍然从几十个会议和刺激对话中旋转。In a series of articles over the next few weeks, I’ll try to download the thoughts that were triggered by this trip, a lot of them unrelated to the main event — the Warren Buffett & Charlie Munger show — but rather by-products of the conversations I had.

After I wrote about my disappointment withBuffett’s mishandling of Coca-Cola Co.’s “excessive” compensation plan, I got an e-mail from Carol Loomis asking me if I wanted to ask Mr. Buffett a question about Cokegate. Loomis is the Berkshire Hathaway CEO’s longtime friend, editor of his annual shareholder letter and one of three reporters at the annual meeting who ask Warren and Charlie questions submitted by readers.

Here is the question I submitted:

I’ve been coming to shareholder meetings for seven years, and for the first time I’m seeing two Warren Buffetts: The first is the moral compass of corporate America — the standard of corporate ethics and integrity (the one we see in the Salomon Brothers scandal intro video year after year). And then last week a second Warren Buffett emerged, the one who commented on Coke’s excessive compensation plan: “We didn’t agree with the plan. We thought it was excessive.” But then as a significant shareholder he abstained from voting on the plan, saying, “I could never vote against Coca-Cola.” The second Buffett behaved like just another middling American politician — the common type that all of us respect so little, the one that votes not for what he believes in but for what is going to keep him reelected. Forty thousand people did not come to Omaha to see the second Buffett, the one that chose crony capitalism; they came to see the first one, who knows the difference between right and wrong. So I would like the first Buffett to judge the behavior of the second one. — Vitaliy Katsenelson, Chief Investment Officer, Investment Management Associates, Inc., Denver, Colorado

Loomis ended up using someone else’s question on that topic, which asked (I am paraphrasing), “This spring, Coca-Cola proposed a large option program for its top managers. Why did Warren Buffett not say he was against the plan beforehand? Why did Berkshire Hathaway abstain rather than vote against?”

巴菲特说，股东（相互基金经理大卫冬季）的提案反对该计划的计算规定了不正确的计算，并且股份发行的实际稀释将低于四年以上的16％。轻松，巴菲特经历了一个假设的例子，表明每年稀释将是1或2％。他仍然相信它是过度的，但由于冬天声称没有那么过多。（这是冬季演示文稿的链接。）

估计股票期权赔偿的真正成本很困难，因为您必须制定关于未来的无数假设：股票价格将在四年（祝您好运）以及实际赚取多少股票期权（应得的）。您甚至必须猜测平均罢工价格（可乐披露了当前计划的罢工价格，但过去的赔偿计划仍然是活跃的，代理披露非常含糊）。我们不拥有可乐的股票，因此我的兴趣是非常学院，但我经历了可乐的代理，通过我的计算，股票期权的稀释比冬季更近。

“We had no desire to go to war with Coca-Cola, and we did not want to endorse calculations that were wildly inaccurate,” Buffett stated, then noted, “I don’t think going to war is a very good idea in most cases.”

I understand why Buffett did not want to team up with David Winters or endorse his calculations. But Winters was not a loudmouthed activist who was proposing to break up Coke; he was just asking Coke’s shareholders to vote against a compensation plan that Buffett, before and during the annual meeting, had repeatedly called “excessive.”

All Buffett had to do was to check the “No” box on the proxy statement.

There may be some quirky nuances in the alternate universe of corporate governance to which I am not privy, but voting against a compensation plan is not considered going to war in the universe where I live. Buffett has been one of the loudest and most respected critics of exorbitant corporate compensation, but when it came time to lead by example, he did not — unless his message was, when you disagree with excessive compensation, abstain.

但是，亲爱的读者，尚未听过。在另一个问题中，巴菲特被问及他的儿子霍华德，他坐在焦炭委员会，并没有对其Cushy执行赔偿计划进行投票。虽然老年人巴菲特直接回答这个问题，但他的非伴侣将我的脊椎发冷。

他解释说，独立董事不一定是独立的。虽然他们对公司不起作用，但他们每年赚300,000美元，以便参加六次会议。这是一个甜蜜的演出，他们通常对肉汁火车摇滚很少。除了经济利益外，在一个主要的公司委员会上有很多声望。董事会不寻找“Dobermans”，Buffett说：“他们寻找可卡犬。”然后他补充说，当他在许多董事会送达时，他批准了他不喜欢的赔偿计划和兼并。

Pause for a second to digest this. What Buffett told us (I truly applaud him for his honesty) was that corporate boards are not there to protect and serve the interests of shareholders. Their incentives — lavish compensation without any accountability for their actions or nonactions — have created an environment where board members are chosen not by how much value they’ll add to protecting the interests of shareholders but on their pedigrees and, more important, their ability to sing “Kumbaya.”

For a long time I could not understand how Hewlett-Packard Co.’s board — packed with talent —收购英国软件可以投票吗maker Autonomy for more than $10 billion.The price tag was slightly insane, but, more to the point, a Google search or just some primitive, scuttlebutt research would have shown that some serious questions had been raised about Autonomy’s accounting (questions that proved to be valid and led to a significant write-off a year later).

关于所有这一切的稍微令人沮丧的是，如果沃伦巴菲特投票赞成赔偿计划和合并，他不喜欢，他不喜欢不打扰公司会议室的和谐，我们可以从其他人那里期待什么？长期以来，“克朗资本主义”一词对我来说毫不犹豫了;但今天，令人悲伤的是，我看着公司委员会，我看看巴菲特的投票弃权，我意识到克朗资本主义由这个国家的企业会议制定。

Suddenly, Carl Icahn, whose annual meeting doesn’t attract 40,000 people, looks like a crusader against crony capitalism. I never thought a visit to Omaha would trigger an appreciation of the role Icahn and other activist investors play in corporate America.