"In his annual shareholder letter-the last one he will pen as CEO before Berkshire vice chair Greg Abel takes over on Jan. 1-Buffett suggested chief executives are driven by greed and selfishness to drive up their own pay after seeing competitors ratchet up their own remunerations. "What often bothers very wealthy CEOs-they are human, after all-is that other CEOs are getting even richer," he said. "Envy and greed walk hand in hand. And what consultant ever recommended a serious cut in CEO compensation or board payments?""
"Buffett's remarks come on the heels of Tesla investors approving CEO Elon Musk's record-breaking $1 trillion pay package on Thursday. The compensation package, contingent on the EV company reaching an $8.5 trillion market capitalization, would make the already-world's-richest-man into the first trillionaire. Musk's net worth is currently about $449 billion. The next day, EV competitor Rivian announced a $4.6 billion compensation package for CEO RJ Scaringe over the next decade, modeled after Musk's plan."
A trend of snowballing CEO pay has emerged as executives emulate competitors' escalating compensation, driven by envy and greed. Mega-packages exemplify the pattern: Tesla investors approved a compensation plan tied to an $8.5 trillion market valuation that could total $1 trillion, while Rivian announced a $4.6 billion, decade-long package for its CEO modeled on that structure. Boards and consultants rarely recommend cuts, and disclosures comparing CEO pay to average worker pay intended to shame excess have instead contributed to competitive ratcheting among executives and directors.
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