Warren Buffett backhands Steve Jobs

Today’s business headlines are dominated by Google’s agreement to purchase YouTube for $1.65 billion. But the more interesting story of the day is a memo penned by Warren Buffett and sent to the top managers of Berkshire Hathaway‘s companies. In the memo, obtained by the Financial Times, Buffett lashes out at the “culture” that has led Apple’s Steve Jobs and other top executives to attempt to justify their backdating stock option awards that inflate their personal wealth, often at the expense of ordinary share holders.

You would have been happy to have as an executor of your will or your son-in-law most of the people who engaged in these ill-conceived activities. But somewhere along the line they picked up the notion … that a number of well-respected managers were engaging in such practices and therefore it must be OK to do so. It’s a seductive argument.

But it couldn’t be more wrong…. [C]ulture, more than rule books, determines how an organization behaves.

You can read the full memo here. On a day when many are proclaiming the second coming of the dot-com boom, it’s a good reminder of the excesses and abuses that era wrought.