Buffett's No. 2 on Citi Bonuses
Published: Mon, 4 May 2009
Description: Charlie Munger on Citigroup's bonuses.
" You on a huge chunk of Moody's warrant and I just talked about this. Movies obviously made some mistakes just as all the other ratings agency did in mr. valuing. A lot of those financial instruments that were out there yesterday said. Maybe we could have been better citizens there. Because you don't usually pick up the phone and called the CEO we're saying that you wouldn't really recognize and a few songs on. I wouldn't have thought I never met him -- never met the CEO that he. How could you have been a better citizen is the largest shareholder movies by speaking up if you saw that this was getting too heady. I don't -- had any significant affect how you got to speak into the CEO would have an effect."
" No we've been on board you know remarked -- we're we've we've expressed views on all kinds of things that we've got -- So that we often feel -- Clarence Darrow he said. Capital might face -- is I don't even Poland or. Yeah yeah. It is I think. -- weird to be tolerated by management to some extent but I -- that I they're not looking. To get in the public arguments -- and -- like that but I. We -- know Coca-Cola when they came out what do Coke but I think provide columns that I I really don't think this updates that was. Of the -- a lot of attention --"
" Compensation we talk about boards and we talk about company decisions. Excessive compensation has been something that has been talked about quite a bit lately with the AIG bonus disaster -- You feel ports aren't doing properly and CEOs on doing properly which should be changed because. We feel like regulation is coming down from Washington -- on things like bonuses and that's a scary thing to some people but. Do you just let the sheriff let all the cowboys run wild as well."
" We're talking about a subject worth very much is wrong and it's very hard to fix. So we have got some magic potion. To fix a serious problem. The imperial court has always abused. Its prerogatives and if you're headquarters in a major corporation you're part of an imperial court. Berkshire we have a different system. The director's own a lot of stuff that directors. Got their start by buying at the open market. They don't get paid hardly anything. We like our system. But how would we. Get that system and the rest of America."
" What's the fundamental flaw Warren of compensation ports. Well flooding in terms of the compensation committee. Basically the CEO picks and they care a whole lot more bombs on the comp committee heard about the audit committee didn't put put me on the audit committee. Can't name every member of the -- on the comp committee Ed Ed didn't really approve what mad at them and how the the CEO cares enormously about it he's got all these comparisons that that that keep ratcheting up and and -- human relations director comes and then human relations mergers works for the CEO of pulls up the appropriate. So Mosul inappropriate comparisons in the laboring -- consultant hoping to get more consulting jobs at. It's all sat. Against the shareholder have and the most gone wild life I guess we don't I think that we we pay any figures for certain people. That we don't mind at all we worked out of hundreds of years ago worked two executives what 75 million dollars -- while we got our money's worth so you're not sheet for the people look at Warren Buffett's really -- you're not that we believe we pay a lot of money -- certain people but it's always report. It's it's all wish for for."
" What if here comes Washington knew you hear that Citigroup is calling and asking Charlie can retail these bonuses. Is that appropriate even -- taxpayer money is certainly with city. Well."
" I'm not for -- details of of that but. It may well be that some of those bonuses where appropriate. Some of the bonuses at city where appropriate yes. I actually feel sorry for -- People together and so deeply was. Derivatives. That they felt they had to be guided some by the people and got him at a terrible. Women were trying to get out path that was they should have thought the level and they went emphasis but once they were down. It was a big enough mess you may need to use the guide the value and demoted to get out. We would probably go that way ourselves what."
" Film where do you stand on regulation. People say -- capitalism is under attack. Ukraine. About. Only on the very margins. Exactly how regulation is Don and compensation -- there are people questioning capitalism in -- overall benefits the basic approach. I guess is very much intact but we have large companies in trouble. The government's going to play a role how big should not be you know were there's some great debates going on right now but it doesn't. Changed the fundamentals speaking of great debates."
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