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The world’s second-richest man, Warren Buffett, wasn’t even the highest paid employee at Berkshire Hathaway’s 19-person headquarters again last year.
Buffett, chairman and chief executive of the Omaha, Neb.-based company, received a total of $175,000 in compensation in 2008, the same amount he received a year earlier, according to regulatory filing.
Berkshire’s chief financial officer, Marc Hamburg, earned the highest paid distinction at company headquarters. But even Hamburg’s pay is almost certainly less than that of CEOs at some of Berkshire’s subsidiaries, such as Geico, MidAmerican Energy, Berkshire Reinsurance. The salaries of executives at subsidiaries aren’t disclosed.
Buffett’s base salary remained at $100,000, the same level it’s been for more than 25 years. He picked up an additional $75,000 for director’s fees from some outside companies in which Berkshire has significant investments. That pay did not change from 2007 either.
Buffett, one of the most successful investors of all time, has been an outspoken critic of lavish executive compensation packages at other companies. In keeping with that philosophy, his own company doesn’t award large pay packages or give out perks or stock options.
The simpler pay structure at Berkshire makes it far easier to calculate how much its top executives make based on the proxy statement the company filed with the Securities and Exchange Commission.
Most of the things The Associated Press includes in its executive compensation calculations don’t exist at Berkshire, including bonuses, performance-related bonuses, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
Berkshire disclosed that it did pay $315,709 to provide personal and home security for Buffett during 2008, but it did not include that amount in the table summarizing Buffett’s compenstion. Berkshire did not disclose any similar security expenses for 2007, and company officials did not immediately respond to questions about the security expenses.
As in past years, Buffett and Munger both reimbursed Berkshire during 2008 to cover any personal costs, such as postage or calls the company may have paid for. Buffett paid the company $50,000, and Munger reimbursed Berkshire $5,500.
While Buffett’s pay remained unchanged, his net worth tumbled along with the worsening economy and stock market. Buffett fell from his perch as the world’s richest person, according to Forbes magazine’s annual list of billionaires, which was published earlier this week.
Forbes valued Buffett’s net worth at $37 billion, $25 billion less than just a year earlier when the magazine estimated he was worth $62 billion.
Along with Buffett’s declining net worth, Berkshire Hathaway’s profit slid in 2008. For the full year, Berkshire’s net income fell to $4.99 billion, from $13.21 billion in 2007.
Berkshire’s vice chairman, Charles Munger, also saw his net worth decline. Forbes estimates Munger’s net worth at about $1.4 billion, good enough for a tie of 522nd on the magazine’s billionaire list.
Munger’s net worth was estimated at $2.4 billion a year earlier. Like Buffett, Munger received the same pay in 2008 as he received the year before. Munger collected his salary of $100,000 and nothing else.
The highest paid employee listed in Berkshire’s proxy statement was again Hamburg. The company’s CFO received a compensation package of $786,500, a 9 percent increase. His salary increased to $775,000 in 2008 from $712,500 a year earlier. A company payment to his defined contribution plan edged up to $11,500 from $11,250 in 2007.
Berkshire owns a diverse mix of more than 60 companies, including insurance, furniture, carpet, jewelry, restaurants and utility businesses. It has major investments in such companies as Wells Fargo & Co. and Coca-Cola Co.
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Associated Press Business Writer Josh Funk contributed to this report from Omaha, Neb.
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On the Net:
Berkshire Hathaway Inc.: www.berkshirehathaway.com