Posted on 01 Mar 2011
In Warren Buffett's widely anticipated annual shareholder letter outlining Berkshire Hathaway's results, in addition to reporting a 61% jump in 2010 earnings and a growing cash hoard, the "Oracle of Omaha" discuss how and why the company's directors and officers have no Directors & Officers Liability cover.
“To start with, the directors who represent you think and act like owners,” he said in the annual letter. “They receive token compensation: no options, no restricted stock and, for that matter, virtually no cash. We do not provide them directors and officers liability insurance, a given at almost every other large public company.
“If they mess up with your money, they will lose their money as well. Leaving my holdings aside, directors and their families own Berkshire shares worth more than $3 billion,” Mr. Buffett said in the annual letter. “Our directors, therefore, monitor Berkshire's actions and results with keen interest and an owner's eye. You and I are lucky to have them as stewards.”