International financier and sometimes Santa Barbara resident Charles Munger – Warren Buffett’s right-hand man at Berkshire Hathaway, Inc. – warned corporate leaders against the temptation of extravagant pay packages for business executives. Speaking at a program for corporate directors at Stanford University, Munger said CEO compensation packages spark widespread public animosity, adding business leaders had a responsibility to “dampen some of this envy and resentment by behaving way more noble than other people and more generous.” In 2005, the average American CEO received $11 million in annual compensation, while the average worker took home $42,000. Munger – whose yearly salary is $100,000 – also took issue with many of the perks enjoyed by the executive class, such as free personal use of corporate jets. When companies fare poorly, Munger said, that should be reflected in executive pay. But even when companies perform spectacularly, executives should exercise restraint, he argued, calling the $400 million check ExxonMobil reportedly wrote off to its outgoing executive Lee Raymond, “damn stupid.”
BIZ GURU BLASTS CORPORATE PAY:
Originally published 12:00 p.m., June 29, 2006
Updated 3:10 p.m., July 20, 2006
Be succinct, constructive, and relevant to the story. Leaving a comment means you agree to our Discussion Guidelines. We like civilized discourse. We don't like spam, lying, profanity, harassment or personal attacks.