QuestionerHow does Berkshire structure the performance-based compensation of the CEOs of its subsidiaries?
WarrenWell, the first thing we do is we never engage a compensation consultant. And we have, whatever it may be, 70 plus or whatever number of businesses we have, they have very different economic characteristics. To try to set some Berkshire standard to apply to businesses such as in your business, such as insurance which has capital as a bulwark, but which we get to invest in other things we'd invest in any way. So there is a minus capital involved to a BNSF or a utility business where there's tons of capital involved or in between C's where there's very little capital involved. We have other businesses that are basically just so damn good that, you know, that a chimpanzee could run them. And we have other businesses that are so tough at times, you know, that if we had out, Alpert P. Sloan back, you know, we wouldn't be able to do very well with them. So there's enormous differences in the economic characteristics of our business. I try to figure out what, if I own the whole business, what is a sensible way to employ somebody and compensate them, considering the economic characteristics of the business. So we have all kinds of different plans. It doesn't take, it doesn't take, It doesn't take a couple of hours of my time a year to do it. We have managers who stay with us, so they must be reasonably happy with the plans. And, you know, it is not rocket science, but it does require, it requires the ability to differentiate. If we had a human relations department, it would be a disaster. You know, they would be attending conferences and people were telling them all these different things to put in equations and so on. And it just requires a certain amount of common sense, and it requires, incidentally, an interaction with the managers that, where, you know, I listen to them, they listen to me, and we sort of agree on what really is the measure of what they're actually adding to the company.