Warren Buffett, the billionaire chairman of Berkshire Hathaway, the legendary investment company, has launched a stinging attack on the continued “corporate greed” in the US.
Writing in his famous annual letter to shareholders, published yesterday, Buffett says: “In judging whether corporate America is serious about reforming itself, CEO pay remains the acid test. To date the results aren’t encouraging.”
Buffett also uses his annual address to criticise the Bush administration’s taxation policy. “If class war is being waged in America, my class is clearly winning,” concluded the world’s most successful investor.
But Buffett, the second-richest man in the world, saved his most biting criticism for mutual fund companies – which he said had “trampled on the interests of fund shareholders in an appalling manner”.
“Hundreds of industry insiders had to know what was going on, yet none publicly said a word,” he said in reference to the market timing scandal where hedge funds and other favoured investors were allowed to profit at the expense of ordinary investors. And he called on funds to elect what he called “truly independent” directors.
His comments come as Buffett revealed that profits at Berkshire Hathaway nearly doubled in 2003.
The company, which is the largest investor in a number of giant US companies including Coca-Cola and American Express, said it earned $8.1bn (£4.3bn) in 2003, compared with $4.29bn in 2002.
The main purpose of Buffett’s annual letter may be to report on the performance of Berkshire Hathaway – but as usual it also included anecdotes and folksy asides.
This year the Sage of Omaha, as he is known, turned to the UK for his anecdote on free enterprise: musing on the fact that 14 years after denationalisation UK utility companies have reduced staffing levels by two thirds but are serving the same number of customers.
Buffett also admitted that he could have saved shareholders $100m if he had acted more promptly to shut down Gen Re Securities, the securities trading arm of his insurance group, General Re. “[I] dithered. As a consequence shareholders are paying a far higher price than was necessary,” he said.