Buffett attacks US ‘executive greed’

ONE of the best known names in US investment management, Warren Buffett, has launched a high profile assault on executive greed in the US.

Buffett called on the 10,000 shareholders attending the Berkshire Hathaway annual general meeting to openly rebel against the levels of pay to senior US executives.

Speaking at the group's AGM, Mr Buffett, one of the richest men in the US, said in his chairman's address there had been more misdirected compensation in corporate America in the past five years than in the previous century.

Calling on shareholders to speak out at annual general meetings Mr Buffett said it was time to provide some "countervailing force or you will have what we had in the last 20 years that is, an enormous disparity the rates of compensation between people at the top and people at the bottom, and a disconnect between people at the top and share owners".

Reports from the US said shareholder questions and answers ran for five hours, highlighting the level of concern many had brought to the group's AGM.

In his statement, Mr Buffett made many comments and observations about the state of corporate America and was given a standing ovation from the shareholders, in contrast to the scathing criticisms faced by many of the US's leading firms this year.

Although hugely wealthy, Mr Buffett's total take from Berkshire Hathaway, his fund management group, was just under $300,0000 last year, despite the performance of his funds which, until the high tech phenomenon, had been outstanding over a 40-year period.

Mr Buffett, 72, is one of the fiercest critics of US executive pay and the abuse of share options that have totalled billions in recent years, fuelled by rising share prices and triggered by the economic boom in the United States.

Experts said shareholder dissatisfaction has crossed the Atlantic, and British companies are also fanning the ire of disgruntled investors at recent annual general meetings.

The latest to face anger from shareholders is Royal & Sun Alliance which holds its AGM on May 14.

The National Association of Pension Funds has called on financial institutions to abstain from voting on the remuneration package of senior executives due to a lack of information on certain matters not dealt with adequately in the annual report.