Esset Koyal Group Capital Management Buffett's Advice: Don't complain about your salary

Warren Buffett has an important piece of advice for the future leader of his empire in his annual letter to shareholders: You'll get rich anyway so don't mind a USD 100,000 salary. 

As chairman of the company for five decades now, Buffett wrote in his letter to Berkshire Hathaway's stockholders, "He can't help but earn money far in excess of any possible need for it. But it's important that neither ego nor avarice motivate him to reach for pay matching his most lavishly compensated peers, even if his achievements far exceed theirs." 

In the same letter, Buffett also explained, for the benefit of the next leaders, the risks of too much bureaucracy and arrogance. He emphasized as well the dangers of not putting the company first. On the other hand, he pointed out the advantages of a decentralized corporation -- all the more reason to take care of shareholders. 

According to the second-richest man in the US, the CEO's attitude will greatly affect the employees under him and the firm's stockholders so it's important that he shows he values them. 

"No one can replicate Warren Buffett, you can't find someone to be him. What you need to do is find someone who carries the same values and principles and philosophy to investing," said Gary Goldstein of Whitney Partners, an executive-search company. 

Esset Koyal Group Capital Management reports that Buffett apparently expects his managers to be largely driven by accumulating performance-based earnings instead of their base pay. Buffett's own salary remains at USD 100,000 since he started a couple of decades ago, along with Vice Chairman Charles Munger. The bulk of his wealth is mostly in the form of shares amounting to over USD 70 billion, which is second to Microsoft's Bill Gates. 

"The compensation questions for the board are really not too important today. They could be important in the future, because it's unlikely the next CEO at Berkshire is going to have the same arrangement that Warren and Charlie do," noted a director from Berkshire. 

Meanwhile, the 84-year-old billionaire seems to be fine with offering huge bonus payments to their growing utility and insurer units. For instance, the chairman of Berkshire Hathaway Energy received almost USD 12 million in bonus last year. Another example is their Chief Financial Officer who got half a million dollars of performance bonus due to a successful business acquisition last year. Esset Koyal Group Capital Management learned that it involved the purchase of Van Tuyl Group, an automotive retailer with various branches across 10 states, for their Automotive division.