Tao Francis
speaker
430 appearances
7 recordings
1 series
first heard Nov 2017
last heard Nov 2022
Tao Francis’s voice in public audio — every appearance, attributed to the second.
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Appearances
United Rentals, it turned out last year, had simply dropped a digit in disclosing the total compensation figure.
Now, each of the components, companies are required to say how much was paid in salary, bonus, equity of various kinds, non-equity, incentive, and so on.
And each of the components was correct, and if you had added up those numbers across the top, you would have gotten the correct number.
But they just left the digit in the hundreds place out.
As a result, if you didn't look closely, it would look like the right sort of number.
There were two commas for a number over 10 million, but in fact it had one fewer digit than it should have.
Yeah, some companies, you know, saw this as triviality.
I think in other cases, I'm sure it was at least a little bit embarrassing.
Certainly companies that are, you know, doing millions and billions of dollars in sales and profits certainly don't want to, you know, make this kind of mistake, especially in something that gets so much scrutiny.
At the same time, as they say, terror is human.
And this does not appear to have been an error.
It appears to be that Berkshire Hathaway changed what it decided to count as compensation.
Until this year, it counted the several hundred thousand dollars a year in security costs, home and personal security that the company provides to Mr. Buffett, who obviously is very high profile, provides those services.
And then until this year, it always counted those as compensations.
A lot of executives receive sometimes millions of dollars in security and other perks or other benefits that the company sees a good business reason to provide, but is considered compensation to the individual.
This year, Berkshire decided that the security costs were not a benefit to Mr. Buffett, but rather a business expense, because Mr. Buffett does so much work from home.
That is not the norm, I don't think, even at large companies.
I think most companies consider these kinds of expenses
benefits that they disclose as income to the executive.
But Berkshire Hathaway took the step not only of no longer counting it as compensation for 2017, the most recent year, it retroactively reduced prior year compensation to exclude those sums for the last two years as well.
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