posted by mark
on Wed, 03/21/2018 - 11:32
Article Link:
The agency problem often occurs in corporate America. With the agency problem, management takes actions that benefit themselves to the exclusion of stockholders.
For example, an CEO at a major company owns a 1/100 percent of the company's stock. He gets a personal jet to take him here and there. The jet is paid for by corporate assets which he owns only .01 percent of (through his stock ownership). The CEO gets the benefit of a beautiful plane to transport him in style and the stockholders pay the cost.
Clearly, Buffett does not engage in this practice. This leadership is one of the many reason's why Berkshire Hathaway is so sucessful!
