[Biglari Holdings Amends Compensation Plan]

10% would be OK if the starting value were the fair value of BH, not the book value which grossly understates fair value.

 

All Sardar has to do to get his $10 million/year is to monetize assets that are currently carried on the books below fair value. He can do this year after year even if he never adds a penny of value to the company, even if he destroys value.

 

I agree.  He could sell real estate that was bought 30 years ago and is currently on the books at cost.  This would increase book value and line the pockets of Sardar without him adding any value. 

[Biglari Holdings Amends Compensation Plan]

Is the investment management business worth anything if Biglari sells to the company?  Why would an individual investor invest in the Lion Fund?  Won't most investors simply redeem their investment in the fund and invest in BH if they want Sardar to manage their money?  If that were to happen there are no management fees earned.  Sardar could be selling the company an asset worth nothing in return for this outrageous comp package.

[Harry Long Was Right About FMMH]

The underwriting gain on personal lines was $2.1 million in 2009.  They had an underwriting loss of $900k in Q2.  I think it's a bit early to say Harry was right.

[Insider Buying at Biglari Holdings]

Isn't Steak n Shake sitting on a bunch of real estate valued at cost?  I assume a lot of this real estate was purchased many years ago and the cost is significantly lower than the current market.  Biglari could simply sell this real estate at current market prices which would increase book value.  Sardar would get paid handsomely on the increased book value even though he didn't create any value.