Warren Buffett gave harsh criticism to Wells Fargo and admitted regrets about not investing in Google during Berkshire Hathaway’s annual shareholder meeting.<\/b>
\nMay 6 (UPI) — Warren Buffett expressed harsh criticism for Wells Fargo and admitted regrets about not investing in Google during Berkshire Hathaway’s annual shareholder meeting Saturday.
He began the meeting by responding to questions about Wells Fargo’s fake accounts scandal with strong criticism for how the bank handled the situation, saying it was a \u00ab\u00a0huge, huge, huge error\u00a0\u00bb if the company ignored calls from employees reporting misconduct.
\u00ab\u00a0They totally underestimated the impact of what they had done once it became uncovered, \u00a0\u00bb he said. \u00ab\u00a0The main problem was that they didn’t act when they learned about it.\u00a0\u00bb
Buffett placed blame on Wells Fargo’s incentive system, which paid, graded and promoted workers based on the number of services they sold to customers.
\u00ab\u00a0It turned out that it incentivized the wrong kind of behavior, \u00a0\u00bb he said.
He added the company had become too accustom to paying fines much larger than the $185 million it paid the Consumer Financial Protection Bureau and didn’t properly assess the severity of the misconduct.
\u00ab\u00a0They measured the seriousness of the problem by the dimensions of the fine and they thought it signaled a less offensive practice, \u00a0\u00bb he said.
The annual powwow was attended by thousands of Buffett investors and disciples. The annual Berkshire Hathaway meeting has been dubbed \u00ab\u00a0Woodstock for capitalists.\u00a0\u00bb Buffett, 86, was ranked this year by Fortune magazine as the world’s second-richest man, worth an estimated $75.6 billion.
Even the Oracle of Omaha admitted he’s made mistakes. He was critical of himself while speaking to shareholders as he and vice chairman Charles Munger admitted they made a mistake not investing in Google early, despite his subsidiary Geico being an early user of its ad service.
\u00ab\u00a0We were close on seeing the impact, \u00a0\u00bb Munger said.
Buffett marveled at modern tech companies and their ability to accumulate market value with minimal fixed assets or capital needs.
\u00ab\u00a0The five largest market cap companies in America are worth $2.5 trillion and require no equity capital. That is an extraordinary change from the past, \u00a0\u00bb he said.
He said this change in market led him to value his investment in IBM less and seek out more stock in Apple.
\u00ab\u00a0We do view them very differently, \u00a0\u00bb he said. \u00ab\u00a0I think Apple is much more of a consumer products business.\u00a0\u00bb<\/p>\n

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