Then, why has he just now, after all these many, many years without a peep, forced changed accounting principles on his Coca Cola and Washington Post stock.
As I said, he has been writing about this subject for many years. Try reading some of his letters to shareholders. You will readily spot how forthright and candid he is with shareholders.
Second, Buffet did not lobby for the change for Coca Cola and the Washington Post to expense stock options. Buffet does not directly run those companies nor involve himself in their day to day operations. Nevertheless, if Buffet did lobby them, wouldn't that make a case for consistency in Buffet's position rather than hypocrisy?
Here are Buffet's comments regarding the Coca Cola situation:
Coca-Cola CEO Doug Daft made the decision to begin expensing options, and Buffett suggested the valuation method, Buffett said. Buffett said he didn't lobby Daft to make the change.
``But I certainly was enthusiastic when Doug Daft called me and said he thought it would be much the preferable way to report,'' Buffett said. ``I'm sure he knew my views because I've written and talked about it in the past. But it was not at my urging at all.''
quote.bloomberg.com
Finally, I don't know why any serious long, term investor would oppose Buffet's shareholder friendly recommendation. The only reason I can think of to oppose honest disclosure of compensation costs is that 1. You are in a company at too high a basis and you want your company to be able to continue to attract greater fools to buy the stock at even high prices by continuing to inflate earnings, or 2. You are a stock options beneficiary yourself in a company that is dependent on inflating its earnings.
Greenspan has this to say about expensing stock options:
The Fed Chairman used that clout in telling Congress earlier this month that stock-option expensing was his top post-Enron reform priority. "I do not deny that earnings would be lower if you expensed them," he said. "I do not deny that there may be greater difficulty in attracting capital ... ," he added. But he suggested that the extra capital many companies attracted with earnings reports that failed to reflect the cost of stock options was probably money they didn't deserve anyway.
online.wsj.com
Best, Huey |
