Warren Buffett Slams ‘Greed and Envy’ Driving CEO Pay Packages in Final Letter

In his final annual letter to Berkshire Hathaway shareholders, Warren Buffett delivered a sharp critique of escalating CEO compensation, warning that corporate greed and envy are creating an unsustainable cycle of executive pay packages.

Key Takeaways

• Buffett calls out “greed and selfishness” driving CEO compensation
• Comments come amid Tesla’s $1 trillion Musk package approval
• Disclosure rules backfired, creating pay envy instead of restraint
• Final letter before Greg Abel takes over as CEO in 2026

The Berkshire CEO’s remarks gain significance as this marks his last letter before vice chair Greg Abel assumes the CEO role on January 1, 2026. Buffett’s warning comes at a pivotal moment, with Tesla shareholders recently approving a record $1 trillion compensation package for Elon Musk that could make him the world’s first trillionaire.

The Compensation Controversy

Buffett’s criticism arrives amid fresh executive pay debates. Tesla’s massive payout to Musk, contingent on reaching an $8.5 trillion market capitalization, was followed by Rivian unveiling a $4.6 billion, decade-long compensation plan for CEO RJ Scaringe. The package would double Scaringe’s $2 billion base salary and mirrors Musk’s performance-based structure.

Buffett’s Direct Quotes on CEO Pay

“What often bothers very wealthy CEOs—they are human, after all—is that other CEOs are getting even richer,” Buffett wrote. “Envy and greed walk hand in hand. And what consultant ever recommended a serious cut in CEO compensation or board payments?”

Reflecting on six decades of leadership, Buffett noted that corporate transparency rules designed to control executive pay instead produced the opposite effect. Public disclosure led to pay envy rather than restraint as executives used competitors’ earnings to pressure boards for raises.

“Based on the majority of my observations—the CEO of company ‘A’ looked at his competitor at company ‘B’ and subtly conveyed to his board that he should be worth more,” Buffett explained.

Final Wisdom from Buffett’s Farewell

In his 8-page farewell letter, the investing legend shared personal reflections and life advice:

• On mistakes: “Don’t beat yourself up over past mistakes—learn at least a little from them and move on.”
• On role models: “Get the right heroes and copy them. You can start with Tom Murphy; he was the best.”
• On legacy: “Decide what you would like your obituary to say and live the life to deserve it.”
• On values: “Greatness does not come about through accumulating great amounts of money, great amounts of publicity or great power in government.”

Buffett emphasized that “kindness is costless but also priceless” and reminded readers that “the cleaning lady is as much a human being as the Chairman.” His final thoughts serve as both a corporate warning and personal philosophy, marking the end of an era at Berkshire Hathaway .