Writing in the New York Times, the CEO of Berkshire Hathaway comments on the current crisis of confidence with corporate earnings reports.
Recently, a few C.E.O.’s have stepped forward to adopt honest accounting. But most continue to spend their shareholders’ money, directly or through trade associations, to lobby against real reform. They talk principle, but, for most, their motive is pocketbook.
For their shareholders’ interest, and for the country’s, C.E.O.’s should tell their accounting departments today to quit recording illusory pension-fund income and start recording all compensation costs. They don’t need studies or new rules to do that. They just need to act.