"Working with Warren,"-Richard Santulli, Founder & CEO of Netjets,
Tuesday, May 01, 2007
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SUSIE GHARIB: Mention the name Warren Buffett and most people talk about him as one of the richest men in the world and a brilliant stock picker. But he's also the CEO of one of America's most successful companies: Berkshire Hathaway. For the past 32 years, he's been running this $98 billion conglomerate of 73 companies in a hodgepodge of businesses: shoes, jewelry, ice cream, furniture, paint and insurance. This weekend, Berkshire holds its annual meeting in Omaha and I'll be there to cover it.
So what's Buffett like as a manager? And what's it like working for this business legend? To get some answers, I visited three CEOs who run subsidiary companies of Berkshire Hathaway. Tonight, we talk with Richard
Santulli. He's the founder and CEO of Netjets, a seller of time share arrangements for corporate jets and one of the fastest growing companies of Berkshire Hathaway. Buffett bought the company in 1998, after being a satisfied Netjets customer himself. As we begin our series, "Working with Warren," I asked Santulli to describe Warren Buffett as a boss.
RICHARD SANTULLI, CEO, NETJETS: He understands every business he acquires completely. They're (ph) very simply businesses really. And then he lets the managers run the business. And if you need assistance, you call him. I mean, if he sees something wrong with the numbers, he'll call you, but he's not a typical CEO. I mean, he's... in that he lets his people, his subsidiary companies run their businesses.
GHARIB: So how often do you get together with Warren Buffett or talk to him about the business?
SANTULLI: I happen to be very lucky. I'm good friends with Warren so I talk to him a lot. But I spoke to him today and I didn't speak about business. We spoke about the weekend. We spoke about the Yankees, Boston. He's just... he leaves me alone, but if I have a question and I have many questions, I'll ask his advice and he gives it to me.
GHARIB: So what's a business meeting with Warren Buffett like?
SANTULLI: Very low key, very personal. We don't have formal meetings. This is not like GE where you sit down and make 16 presentations and have 500 slides. Not at all, that doesn't happen.
GHARIB: How much detail does he want to know?
SANTULLI: You send him finances. He wants the numbers. I mean, he's... the amazing thing is, you don't have to spend a lot of time with Warren because he understands the numbers. He's just a very, very astute man, a brilliant guy.
GHARIB: You say that you're in touch with Warren Buffett quite a bit. How hard is it to get him on the phone or do you e-mail him?
SANTULLI: He doesn't do e-mails. He answers the phone. Ninety percent of the time -- I have his direct number, he picks up the phone and says hello. If not, I get one of his assistants and he'll call me back quickly. He actually uses a cell phone now, which is very amazing.
GHARIB: The private jet business is pretty competitive. Do you feel that Netjets is in a stronger position because you have Buffett in your corner?
SANTULLI: Oh, sure. People like to be associated with winners, as we all know and being part of a Berkshire Hathaway family, we're associated with a winner. Being owned by Warren Buffett is huge. (INAUDIBLE) he doesn't buy anything but high quality companies, and it was really kind of a good housekeeping seal of approval when he bought us.
GHARIB: What's so special about working for Buffett? What are the perks of working for him?
SANTULLI: First time my wife met him and she was nervous. She's not kind of a corporate wife. She doesn't like to go out and mingle in a corporate environment. We had dinner in the city and when we left, she sat next to Warren. She said it was like sitting next to the mailman. That's exactly what she said. He makes you comfortable.
GHARIB: Is it fun working for Buffett?
SANTULLI: It's fun. He's a fun guy and I think he's my friend and he's fun. He's a smart guy.
GHARIB: I understand that Warren but has never fired a CEO of any of the Berkshire Hathaway subsidiary companies. Is it because you're all so good or is it something else?
SANTULLI: If you make a mistake, in some companies you're gone. If you make a mistake and you're trying, Warren is not the kind of guy to fire you. If he knows -- first of all, his integrity is the most important thing. If you are honest, hardworking and more importantly, like he says, anything you do be prepared to read it on the newspaper the next day. If you operate that way, you know, he's -- he's not going to pull the trigger quickly.
GHARIB: When it comes to salaries and bonuses, how generous is Buffett?
SANTULLI: He's very fair and equitable and obviously most -- I mean, none of us -- none of the managers to my knowledge have ever quit, either. So obviously we're pretty happy with how we're compensated.
GHARIB: You talk about how warm and personable Buffett is, but what gets him upset? What would trigger them to lose his temper?
SANTULLI: I've never seen him lose his temper. He's never lost his temper with me. I'm telling you, what you hear about him or heard about him, take it up about two bars because I've never felt him angry.
GHARIB: As a CEO yourself, what is it that you learned from the CEO of CEOs?
SANTULLI: I think Warren gives you so much freedom and he's put so much -- has so much confidence in you that you really want to show Warren that he's made the right decision. I mean, that you really want -- I mean, to be honest with you, Berkshire Hathaway is a big company. I mean, it's - - we work for Warren Buffett or at least I do. It's almost that you -- it's like your father. You just really want to show Warren that you really are capable of providing for him the returns that he expected when he bought your company. And that's -- you know, that's -- and you feel good when he writes you a note saying great job.
GHARIB: A lot of people think you will be the one to succeed Warren Buffett as CEO of Berkshire Hathaway. How do you feel about that?
SANTULLI: First, it's very flattering. If he selected me, I'd do whatever I can. No one's going to emulate or be Warren Buffett number two, that's not going to happen.
GHARIB: Do you think that Berkshire Hathaway can be as successful a company as it's been when Buffett is gone?
SANTULLI: No. I think -- I think he will always be a powerful company. Is someone going to be able to buy businesses as well as Warren? Maybe. But is someone going to be able to, more importantly, take advantage of anomalies in the market, whatever they may be, as well as Warren? No. As far as running the companies, you know, that will be the easier of the two parts, running the operating businesses. But as far as investing the billions and billions of dollars, that's -- you're not going to replace Warren Buffett.
GHARIB: Tomorrow we continue our series "Working with Warren" with my conversation with another Berkshire Hathaway manager, Dennis Abrams, president of Benjamin Moore.
