When reading investment books one invariably come across a section somewhat late in the investment process regarding executive pay. It caution the investor on whether the executives running the company has the shareholders interest at heart or just simply interested in fattening his own pockets.
- find out online how much the companies' executives are paid
- Compare the pay with a few other companies in the industry
If the businesses make roughly the same amount of $$ & industry is same then the pay is comparable. If a CEO's pay isn't in line with others by a wide margin then you might have found a company that isn't putting its shareholder interests first. Huge paychecks are just 1 symptom of questionable management.
Substitute companies with other 1st world govts & industry with other 1st world nations.
Does this ring a bell especially to S'poreans? Even after salaries downward adjustment the pay is still ridiculous. If S'pore is a 'company' which some people already say is S'pore Inc then Buffett won't touch this dubious company as the executive package already fail his criteria of honest management miserably.