The untold story of Pete Liegl who helped Warren Buffett’s firm make billions

He said he heard of Liegl in 2005 when he got to know that the latter wanted to sell his firm, recreational vehicle (RV)-manufacturer Forest River, to Berkshire. Buffett recalled that he was also told of the price Liegl expected to receive for his company. “I liked this no-nonsense approach,” Buffett said.

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He went on to state that he also bought real estate from Liegl after simply accepting the valuation he proposed. He later also asked Liegl for what he wanted his compensation to be, saying, “Whatever he said, I would accept.”

Buffett recalled Liegl as replying, “Well, I looked at Berkshire’s proxy statement and I wouldn’t want to make more than my boss, so pay me $100,000 per year.” However, Liegl’s expectation from his compensation had more room as he said, “But we will earn X (he named a number) this year, and I would like an annual bonus of 10% of any earnings above what the company is now delivering.”

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“I replied, ‘Ok Pete, but if Forest River makes any significant acquisitions we will make an appropriate adjustment for the additional capital thus employed.’ I didn’t define ‘appropriate’ or ‘significant’, but those vague terms never caused a problem,” Buffett explained.

“During the next 19 years, Pete shot the lights out. No competitor came close to his performance,” the veteran investor said.

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“Every company doesn’t have an easy-to-understand business and there are very few owners or managers like Pete,” he said, adding that he has observed that a “very large portion of business talent is innate with nature swamping nurture”.

“Peter Liegl was a natural,” Buffett concluded.