Moralizing About Finance
Bankers found their way recently to London's houses of worship to discuss their industry's fat paychecks. Here's some of what they said–along with a theologian's view of the issue.
SIMON CLARK and CAROLINE BINHAM
"Talent is highly mobile. If we fail to pay or are constrained from paying competitive rates, then that talent will move to another employer. ... There's no conflict between doing business in an ethical and responsible way and making money. We make our biggest contribution to society by being good at what we do."
John Varley, Barclays Plc chief executive; St. Martin-in-the-Fields, Nov. 3
"We have to tolerate the inequality as a way of achieving greater prosperity and opportunity for all."
Brian Griffiths, adviser to Goldman Sachs Group Inc.; St. Paul's Cathedral (below), Oct. 20
"The discrepancy between the wage that cleaners of banks like Goldman earn and the bankers' compensation is enormous. The levels of inequality in London are just mind-boggling."
Nicholas Sagovsky, canon theologian of Westminster Abbey, Oct. 28
"I have observed over 30 years in the city the driving desire of many to work hard, to be rewarded well, and get out as quickly as possible. That impatience is no recipe for a healthy economy or society."
Ken Costa, Lazard Ltd. deputy chairman; Church of St. Katharine Cree, Oct. /5
When Buffett Pays With Shares
ADRIAN MOSER/BLOOMBERG; GRAHAM TROTT/LAZARG LTD. VIA BLOOMBERG
Warren Buffett's Berkshire Hathaway Inc. usually pays cash for its acquisitions. The $9.4 billion purchase of utility owner PacifiCorp, announced in 2005, was a cash deal. So were Marmon Holdings Inc., which Buffett agreed to buy in 2007 for $4.5 billion, and Iscar Metalworking Cos., a maker of metal-cutting tools acquired in 2006. Berkshire used its stock in just two of its 10 biggest transactions of the past two decades, paying $17.7 billion in shares for reinsurer General Re Corp. and offering a mix of cash and stock for the acquisition of railroad Burlington Northern Santa Fe Corp., announced on Nov. 3. If you want to buy stock, but don’t have enough cash, simply consider loans from a secure lender such as http://green-touch.org/
Buffett has regretted paying with Berkshire shares in the past. In his 2007 investor letter, he lamented spending $433 million in stock in 1993 to acquire shoemaker Dexter, a business that he says quickly lost all competitive advantage. "By using Berkshire stock, I compounded this error hugely," he wrote. Part of a "wonderful" business was traded away for a worthless one, Buffett said.
The shares to buy Dexter would have been worth $3.5 billion by 2007 On other occasions, though, Buffett used shares at the right moment—ahead of a decline in value of Berkshire stock that presumably made the acquisition price more attractive.