Seek out bosses who don't cream off your profits.
Bonuses are increasing again in the bailed-out financial sector, and the public is outraged, or at least slightly miffed. Unlike the anger that terminated the careers of some freeloading MPs, the bankers appear to be the objects of a gentler and more recreational outrage, the sort that won't actually change anything.
But while the fat cats are briefly harassed by the neighbourhood terriers, let's not forget that some companies are run by management that's not profiting at the expense of the company -- to borrow a phrase from Maynard Paton, let's call them 'thin cats'. Sadly, none of the examples I could find were in the financial sector.
The thin cat of Omaha
Probably the best-known example of a business leader who takes only a modest salary is Warren Buffett, who receives just $100,000 annually for his services to Berkshire Hathaway. He owns a very large chunk of Berkshire shares, so his interests are very well aligned with those of his shareholders.
Domestic thin cats
Closer to home, the company that immediately springs to mind in this regard, and not just because it fits in neatly with the feline metaphor, is property group Panther Securities (LSE: PNS). Fans of the famously outspoken Chairman and CEO, Andrew Perloff, will not be at all surprised to hear that he has waived his half-million pounds salary in recent years because he is "fed up with personally paying so much tax!".
Pocketing just £4,000 in taxable benefits last year from the company, "the Remuneration Committee considers that currently the executive Directors' remuneration is below market comparables". I think that's a fair assessment. Mr Perloff does own 24.8% of the company, and seems to regard the dividend of roughly £0.5m from that as sufficient.
The boss of patent translation business RWS (LSE: RWS) took a £231,000 salary last year, with no bonus or options, which is very much towards the low end of the salary spectrum. He also owns 45% of the company, which provides a dividend income in the region of £2m.
Also worthy of a mention is the head of FTSE 100 software company Autonomy (LSE: AU). The company is valued at around £3.4bn and has been growing rapidly, but its CEO was paid a well-below-average £610,000 last year, half of which was a bonus, and there were no dividends (he owns 8.4% of the business).
I'm not suggesting that any of these people will have difficulty keeping food on the table, but its good to see companies where the leaders are not creaming off excessive salaries from the profits of the shareholders.
More from Padraig O'Hannelly:
Directors whose interests are aligned with shareholders are one of the things Maynard Paton looks for when picking investments for Champion Shares. Find out more here.
