Billionaire investor Warren Buffett said shareholders such as mutual fund managers must stop supporting bad chief executives out of fear they'll find the spotlight turned on their own pay and performance.
"Getting rid of mediocre CEOs and eliminating overreaching by the able ones requires action by owners -- big owners," Buffett wrote in his annual letter to shareholders of Berkshire Hathaway Inc, his investment company. "Unfortunately, certain major investing institutions have `glass house' problems in arguing for better governance elsewhere."
Buffett's views on the obligations of corporate directors gained prominence last year after accounting scandals at WorldCom Inc and Enron Corp, the two biggest bankruptcies in history, shook investors' confidence in financial reporting. Regulators and corporate executives turned to Buffett, 72, the largest shareholder of companies including Coca-Cola Co and American Express Co, for advice on issues such as accounting for employee stock options as an operating expense and dealing with auditors.
The "acid test" for corporate reform is executive pay, said Buffett, who reported Berkshire's fourth-quarter net income soared 12-fold to US$1.18 billion as the company's insurance businesses raised prices and wrote more policies. Buffett was paid US$356,400 in 2001, the most recent year reported. That includes US$100,000 in salary, and US$256,400 in other compensation. Berkshire shares owned by Buffett and his wife Susan are worth about US$33 billion.
"Managers will cheerfully agree to board `diversity,' attest to SEC filings and adopt meaningless proposals relating to process," Buffett wrote. "What many will fight, however, is a hard look at their own pay and perks."
Too many CEOs are "otherwise decent people" who have "behaved badly at the office" in recent years, Buffett wrote.
They "simply followed the career path of Mae West: `I was Snow White, but I drifted.'"
The bull market of the 1990s encouraged abuses by executives, Buffett wrote.
"As stock prices went up, the behavioral norms of managers went down. By the late 1990s, as a result, CEOs who traveled the high road did not encounter heavy traffic."
Buffett said to be wary of companies that don't count stock options as an expense or have "fanciful" pensions assumptions.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest foundry service provider, yesterday said that global semiconductor revenue is projected to hit US$1.5 trillion in 2030, after the figure exceeds US$1 trillion this year, as artificial intelligence (AI) demand boosts consumption of token and compute power. “We are still at the beginning of the AI revolution, but we already see a significant impact across the whole semiconductor ecosystem,” TSMC deputy cochief operating officer Kevin Zhang (張曉強) said at the company’s annual technology symposium in Hsinchu City. “It is fair to say that in the past decade, smartphones and other mobile devices were
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