Warren Buffett shared his concerns on CEO pay packages in a recent letter. He explained that companies started disclosing CEO pay to make executives aware of their earnings, but it led to a competition over who earns more.
Buffett wrote that the disclosure rules had the opposite effect, creating envy rather than moderation among CEOs. They would compare themselves to their competitors and try to boost their pay, often at the expense of directors’ compensation.
The legendary investor also announced his retirement as CEO of Berkshire Hathaway in December, after 60 years of leadership. He will be replaced by Greg Abel, who was designated as his successor in 2021. Buffett expressed gratitude for his life and legacy, saying he would “go quiet” and focus on philanthropy, donating the $149 billion worth of Berkshire Hathaway stock he still holds.
Buffett’s comments come just days after Tesla shareholders approved a massive pay package that could make CEO Elon Musk the world’s first trillionaire. The approval of this package has sparked concerns about the lack of transparency in executive compensation and its potential impact on corporate culture.
Source: https://economictimes.indiatimes.com/news/international/global-trends/us-news-warren-buffett-takes-aim-at-elon-musks-1-trillion-tesla-pay-package-ace-investor-says-envy-and-greed-walk-hand-in-hand/articleshow/125242832.cms?from=mdr