Directors are provided with no insurance? Are they prohibited from getting their own? Are they required to disclose if they’ve gotten any to the Big W?
Outside directors also? Gosh, they must be so happy having their net worth on the line in the event of a class action.
They are not “uninsured”, but the directors are “self-insured”, a good position to be in financially. Each member of the BOD is its own “Lloyd’s” syndicate.
Interesting comments from the “the great one” that if the director messes up with the stockholders money, it will cost the director money— that assumes that every lawsuit filed is a winner. What about the many thousands of dollars (which could go well into the 6 figures) on suits that are without merit? I would hate to be a director getting little compensation and have to shell out $50,000 to $100,000 to get myself out of a lawsuit when I didn’t do anything wrong.
I like the math. Cost a billion a year in advertising to keep 14 billion on the books. That would be 8% of every premium dollar every year. Seems like a high cost of acquisition, considering that Warren spends that each and every year. Most independent agents get 10% to generate a policy for a carrier. Not a big difference.
So if they value GEICO goodwill at 100% of premium writings, then ALLSTATE would have goodwill value of $32 billion while earning only $854 million a year? (2009 figures)
Give Warren Buffet some credit, Fraud states like New York and Florida must be a drain on their business model. Interested in hearing what their retention and loss ratios are writing all the business that no one wants at bargain basement pricing.
Note that the article doesn’t say B-H won’t indemnify the directors and officers against claims, it just says they don’t carry insurance for it. So the only claims the directors really are at risk of having to pony up for personally are those that the corporation can’t legally indemnify them for, or claims the corporation can’t cover because of insolvency, neither a scenario that’s especially likely to play out IF the D’s and O’s are performing faithfully. This isn’t as high-risk a proposition as it might sound at first blush.
Really?
Directors are provided with no insurance? Are they prohibited from getting their own? Are they required to disclose if they’ve gotten any to the Big W?
Outside directors also? Gosh, they must be so happy having their net worth on the line in the event of a class action.
They are not “uninsured”, but the directors are “self-insured”, a good position to be in financially. Each member of the BOD is its own “Lloyd’s” syndicate.
So, unlike the lower castes, who when not insured are “uninsured,” these people are “self-insured. Yes, that makes a lot of sense.
And their “reserves” are their personal bank accounts, houses in Connecticut, and the like?
That sounds good to me. I would certainly trust the judgment of a director who allows himself to be exposed like that.
Interesting comments from the “the great one” that if the director messes up with the stockholders money, it will cost the director money— that assumes that every lawsuit filed is a winner. What about the many thousands of dollars (which could go well into the 6 figures) on suits that are without merit? I would hate to be a director getting little compensation and have to shell out $50,000 to $100,000 to get myself out of a lawsuit when I didn’t do anything wrong.
Hhmmm. You are correct. And I am not even a D&O broker!
This comment seemed so simple-minded that I could not imagine it was actually saying what it seemed to be saying.
I like the math. Cost a billion a year in advertising to keep 14 billion on the books. That would be 8% of every premium dollar every year. Seems like a high cost of acquisition, considering that Warren spends that each and every year. Most independent agents get 10% to generate a policy for a carrier. Not a big difference.
So if they value GEICO goodwill at 100% of premium writings, then ALLSTATE would have goodwill value of $32 billion while earning only $854 million a year? (2009 figures)
That sounds ridiculous.
Give Warren Buffet some credit, Fraud states like New York and Florida must be a drain on their business model. Interested in hearing what their retention and loss ratios are writing all the business that no one wants at bargain basement pricing.
Note that the article doesn’t say B-H won’t indemnify the directors and officers against claims, it just says they don’t carry insurance for it. So the only claims the directors really are at risk of having to pony up for personally are those that the corporation can’t legally indemnify them for, or claims the corporation can’t cover because of insolvency, neither a scenario that’s especially likely to play out IF the D’s and O’s are performing faithfully. This isn’t as high-risk a proposition as it might sound at first blush.
Ungh, the BS its like listening to Charlie Sheen.
BH officers and directors buy their own D&O coverage.
“They are not treated like rock stars. They do not get fancy Wall Street-like perks”
He flies around the world on a private jet taking private trains.