The Wall Street Journal-20080206-Deal Journal - Breaking Insight From WSJ-com
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Deal Journal / Breaking Insight From WSJ.com
Full Text (539 words)Can Buffett
Broker a Peace?
---
Yahoo President, Gates
Sit on Berkshire's Board;
Meetings May Get Tense
When we think of history's great treaties, we think of the Treaty of Paris, the Treaty of Versailles and . . . the Treaty of Omaha?
It could all be up to Warren Buffett, who presides over perhaps the only place where Microsoft and Yahoo occasionally agree: the board of Berkshire Hathaway. That is because Yahoo President Susan Decker and Microsoft co-founder and Chairman Bill Gates both sit on Berkshire's board. Now that Microsoft has revealed its $44.6 billion bear hug for Yahoo those meetings may get tense.
Ms. Decker, a former Donaldson Lufkin & Jenrette analyst, often is rumored as a successor to CEO Jerry Yang. Mr. Buffett is a fan: He called the move bringing her to the Berkshire board in 2007 a "home run." Mr. Buffett is, of course, particularly close with Mr. Gates and even got his fellow billionaire into the Augusta National Golf Club.
Last year, when Ms. Decker was visiting Omaha, Neb., to join the board -- and only three months after Microsoft CEO Steve Ballmer had talked to Yahoo executives about a potential deal -- she caught up with Messrs. Buffett and Gates, breaking bread with them at a Buffett favorite, Gorat's Steak House in Omaha.
Mr. Buffett has no holdings in either company, but Ms. Decker and Mr. Gates still have skin in the game. At the $31 a share Microsoft has offered, Ms. Decker's holdings in Yahoo would be valued at $19.6 million. And Mr. Gates, who will step down from day-to-day work for the company in July, might want to make one last grand move before he sails off. -- Heidi Moore
Bonus Battles at Societe Generale
The 4.9 billion euros ($7.3 billion) trading loss sparked by wayward Societe Generale trader Jerome Kerviel has sparked a criminal probe, a government inquiry and calls for the bank's top brass to resign. But for many of the 11,000 employees in the bank's corporate and investment banking division, there is a bigger worry: Will it hurt my bonus?
"That's the one thing everyone here is worried about," said a New York trader for Societe Generale.
The French bank's recent disclosures are forcing it to rework the math at the last minute, with the bank juggling contrasting interests, international compensation consultants say. It needs to protect shareholders by cutting costs, but if it clips bonuses too much, it risks bruising the egos of traders and investment bankers and causing a stampede for the door.
Several top officials at Societe Generale already have indicated employees in some parts of the bank's trading division may be disappointed when the bonuses are announced Friday. Yet in a Jan. 27 conference call, Jean-Paul Mustier, the head of corporate and investment-banking unit, said that even within his division -- which took the hit for the trading losses -- the bank would try to pay people in a way "suitable to retaining them."
So far, Societe Generale Chairman and Co-Chief Executive Daniel Bouton and Co-Chief Executive Philippe Citerne have said they will forgo their salary for the first half of 2008 and their bonuses for 2007.
-- Gabriel Kahn and Cassell Bryan-Low
