254 Notes
2.John A. Byrnes, “The Blame When the Boss Fails,”Business Week, December
27, 1999.
3.Consult Kevin Murphy, “Corporate Performance and Managerial Remunera-
tion: An Empirical Analysis,”Journal of Accounting and Economics,vol.7
(1985), and Hamid Mehran, “Executive Compensation Structure, Ownership,
and Firm Performance,”Journal of Financial Economics, vol. 38 (1995).
4.Ben & Jerry’s Homemade, Inc., 1992 Annual Report (5:1 ratio raised in 1990 to
7:1); Ben & Jerry’s Homemade, Inc., 1998 Annual Report (16:1 ratio at its “his-
torical high” and would be higher if “the present value of unexercised stock
options were included”).
5.Lee Gomes, “McAfee.com to Make Long-Awaited IPO,”The Wall Street Jour-
nal, December 2, 1999.
6.Haig Simonian and Nikki Tait, “U.S. Executives Earn Much More,”The Fi-
nancial Times(London), August 3, 1998.
7.Warren E. Buffett and Lawrence A. Cunningham,The Essays of Warren Buffett:
Lessons for Corporate America(The Cunningham Group, 1997), 54–55.
8.“Accounting for Stock-Based Compensation,”Statement of Financial Account-
ing Standards No. 123(Financial Accounting Standards Board, 1995).
9.Gretchen Morgenson, “Investors May Now Eye Costs of Stoc kOptions,”The
New York Times,August 29, 2000 (reporting studies performed by Pat Mc-
Connell of Bear Stearns); Manitou Investment Management Ltd.,The Long
View: The Amazing Stock Option Bubble(October 1999) (reporting studies per-
formed by the British research firm Smithers and the U.S. investment banking
firm Sanford Bernstein).
10.David Leonhardt, “In the Options Age, Rising Pay (and Risk): Will Today’s
Huge Rewards Devour Tomorrow’s Earnings?”The New York Times, April 2,
2000.
11.Buffett and Cunningham,Essays,58.
12.Reuters, “Study Says Mergers Often Don’t Aid Investors,”The New York Times,
December 1, 1999.
13.Buffett and Cunningham,Essays, 143.
14.Mattell, Inc., SEC Form 8-K (filed July 22, 1999).
15.Mattell, Inc., SEC Form 8-K (filed October 22, 1999).
16.Buffett and Cunningham,Essays, 123–127.
17.Beginning in 1999, the author helped direct a project on firm structures for the
Independence Standards Board, and his views expressed here do not necessarily
represent those of that project or of the board.
18.Buffett and Cunningham,Essays, 168.
Chapter 14
1.David Gladstone,Venture Capital Handbook(Prentice-Hall, 1988), 101–104.
2.Warren E. Buffett and Lawrence A. Cunningham, The Essays of Warren
Buffett: Lessons for Corporate America(The Cunningham Group, 1997), 36