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By Root 3141 0

looked busy, but he was sure they must be peeking sideways from behind the glass to see what he would do. Course after course arrived, and each of his plates went back, untouched. He imagined that he heard a slight buzz from the kitchen. How many more courses could there possibly be? He had not realized there were this many things on the planet that could be eaten raw. Mrs. Morita seemed slightly embarrassed for him, but he wasn’t sure, because she smiled politely all the time and said so little. Time crawled more slowly with each course. He had been counting, and the number of courses now exceeded ten. He tried to make up for his culinary lapses with witty, self-deprecating conversation about business with Morita-san, but he knew he was disgracing himself. Even in the middle of his bonfire of embarrassment, he could not help but think longingly of hamburgers. He was sure that the beehive in the kitchen was humming louder with every plate he sent back. By the end of fifteen courses, he had still not eaten a bite. The Moritas could not have been more polite, which added to his humiliation. He was desperate to escape back to Kay’s apartment, where popcorn and peanuts and strawberry ice cream awaited him.

“It was the worst,” he says about the meal he did not eat. “I’ve had others like that, but it was by far the worst. I will never eat Japanese food again.”

Meanwhile, hundreds of Salomon employees who would have crawled up Fifth Avenue on their knees blindfolded to eat this same dinner with the Moritas were instead dining at high-priced Japanese restaurants and mutinying over the size of their huge bonus checks. The hugeness of their checks was not the point. It was the hugeness of their checks compared with others’ huge checks that mattered. Buffett and Munger knew little of the trouble fomenting at Salomon. Meriwether’s arbs had been agitating for more money. The former college professors, hired away from salaries of $29,000, felt they were subsidizing money-losing departments like equity investment banking. They viewed sharing their profits as “socialist.”41 The arbs could have made more on their own. They wanted a cut of the hundreds of millions they earned for the firm.42 Although he was so shy that he had trouble maintaining eye contact, Meriwether now became the world’s most aggressive and successful bonus pimp. Gutfreund caved and gave the arbs fifteen percent of what they made,43 which meant they had the potential to come away with much more money than the traders, who shared their bonus pool. The deal was made in secret between Gutfreund and Salomon’s president, Tom Strauss; the board never knew, nor did other employees at Salomon—yet.

By 1991, Buffett and Munger had been through a series of disappointments and setbacks at Salomon. The financial results they got were not always up-to-date. Staff demands for bonuses continued to spiral. They disagreed with much of what went on in the boardroom. The stock price had not moved for eight years. Earnings were down $167 million, mostly because of employees’ pay.

Buffett, having so far let Munger be the Appointed Bad Guy, now roused himself, met with the executive committee, and told them to cut back. Yet when the final bonus pool number came through, it was $7 million higher than before. Under the new formula that Meriwether, as bonus-pimp, had procured for his arb boys, one of them, Larry Hilibrand, got a raise from $3 to $23 million.44 When word of Hilibrand’s bonus leaked to the press, some of his colleagues went crazy with envy and felt cheated—the millions they were making forgotten.

Buffett himself had no problem with the arbs’ bonuses. “I believe in paying talent,” he says, “but not, as Charlie would say, as a royalty on time.” The arrangement was like a hedge fund’s fee structure and bore some resemblance to his old partnership.45 It would put more pressure on the rest of the firm to perform. What he objected to was not being told. He objected even more to the fact that other people did not get haircuts for their lack of performance. Gutfreund had showed a better