Intel Corp (INTC)

[Professor MD]

Buffet noted, “The CEOs are terrified of activists”.

He thinks that some corporation distribute too much of value as bonus to management. This may be the reason Intel’s management offered to changed the compensation formula for 2015 and the decision of IBM to sell their processors business.

BECKY: Does it strike you that activist investors are getting stronger and stronger? Are there—
BUFFETT: Oh, they are.
BECKY: —CEOs—
BUFFETT: They are. They are. The CEOs are terrified of activists. I can— I can tell you that. (LAUGH) They're all talking to investment bankers and lawyers and saying, "What do we do about this?"
BECKY: Who is in the right? Or is it tough to paint all activist investors with one brush?
BUFFETT: I don't think you can generalize about it. I think there— there are companies that— that— where management has not done a good job, and I'm not— referring to anything specific here. But I mean — certainly if people want to step up and buy a lot of the stock in a company, I— it's hard to argue with their right to do that.
BECKY: There have been— major Dow components that have been mentioned as potential takeover targets, even an IBM, some people have suggested. Do you think that would be for the good of shareholders or to the detriment?
BUFFETT: (THROAT CLEAR) Well, I think it would be case by case. But I— I— I— I'm not looking for anybody to do that in IBM.
CNBC Transcript: Warren Buffett on Coke pay plan.

http://www.cnbc.com/id/101608436