If you lose reputation for the firm, I will be ruthless -- WEB

[Munger]

Buffett walks the walk -- the Benjamin Moore CEO learns the hard way.  Well done Mr. Buffett.

 

 

 

Warren Buffett has sent one of his top execs on a cruise to Nowheres-ville.

 

The billionaire owner of Berkshire Hathaway, famous for not micro-managing, stepped in last week and quietly canned the boss of Montvale, NJ-based Benjamin Moore paint after the CEO treated himself and his corporate coterie to a trip to Bermuda on the company tab, sources told The Post.

 

Ironically, the 129-year-old Berkshire-owned paint company, after suffering through five years of shrinking sales in the wake of the housing market collapse, had just recorded its first quarterly sales increase since 2007.

 

CEO Denis Abrams arranged the island getaway to celebrate the achievement, sources said.

 

But the Bermuda trip — and an island dinner cruise while there aboard a yacht that some in the party believed was owned by singer Jimmy Buffett — proved to be one of the last acts Abrams would take on as CEO.

 

The trip riled Benjamin Moore’s rank-and-file, who have weathered layoffs, slashed commissions and frozen salaries over the five years of tough sledding.

 

Whether or not because of worker complaints, a half-dozen Berkshire officials descended on Benjamin Moore’s North Jersey headquarters last Tuesday to give Abrams his walking papers — and escort the CEO from the building, sources said.

 

“[Abrams] kept asking what he’d done wrong,” according to an insider briefed on the ouster. “[berkshire officials] told him to clear his stuff out while they stood and watched every move he made.”

 

Reached yesterday, a Benjamin Moore spokeswoman confirmed Abrams was ousted and had been replaced by Bob Merritt, a veteran restaurant exec.

 

She declined to comment further. Officials at Berkshire, as well as Abrams himself, didn’t respond to requests for comment .

 

Firings of top executives at Buffett-owned companies are rarely made public. While Berkshire is publicly traded, the CEOs of his companies operate mostly outside of public view.

 

Buffett is said to give his CEOs a simple mandate: run your company as if it were the only asset you own without the option to sell or merge.

 

Berkshire bought Benjamin Moore in 2000 as part of a big move by Buffett into the housing sector. US homeowners needed paint and Benjamin Moore, started by Brooklyn’s Moore brothers on Atlantic Avenue in 1883, just as the Brooklyn Bridge was completed, was supposed to spin off cash and profits.

 

Abrams was the vice-president for operations when Buffett bought the company. He was promoted to the top spot in July 2007 — just in time for the mortgage meltdown.

 

“Bermuda-gate” aside, sources said Abrams’ ouster followed years of worker complaints and strategic gaffes that have hurt the firm’s business — and tarred Berkshire’s reputation with employees.

 

“Ding! Dong! The witch is dead!” one former exec told The Post, noting that Abrams routinely referred to himself as a “dictator” as he threatened dissenting workers with their jobs.

 

Nevertheless, some insiders also blame Berkshire for Benjamin Moore’s woes, as Buffett has paid fat salaries and bonuses to top execs in exchange for clearing punishing profit hurdles.

 

Abrams met targets partly by slashing the company’s sales force and ad budget, which in turn has hurt revenue and market share, according to critics.

 

Meanwhile, Buffett stripped $150 million a year in dividends from the company’s coffers after acquiring it for $1 billion.

 

Insiders said the recent sales increase was driven by price hikes and not unit sales — which continued to decline.

 

Excluding recent acquisitions, annual revenue remains about half the peak of $1.1 billion reached in 2005 — an embarrassment for Buffett.

 

In the throes of the housing crisis, critics say the 62-year-old Abrams made matters worse by introducing a dizzying array of high-tech and high-priced tints. Abrams fired veteran sales execs; retailers say he tried to strong-arm them into exclusive distribution deals.

 

“These were family-owned businesses, a lot of them were my friends,” said Rod Mangan, a ex-regional sales manager in Stuart, Fla., who says he was fired five years ago after 31 years at the company.

 

Small retailers charge that Abrams also undercut their business by signing distribution deals with larger chains and began selling paint on Benjamin Moore’s Web site.

 

Meanwhile, inside Benjamin Moore, employees were whispering that the dinner cruise in Bermuda was taken on a yacht owned by none other than Jimmy Buffett. The famous singer shares a surname and a longtime friendship with the legendary investor.

 

(In 2007, a DNA test found the Buffetts weren’t related.)

 

“One of the wives [on the cruise] posted pictures on Facebook, and she said it was Jimmy Buffett’s boat,” a source said.

 

“People were like, ‘Why didn’t I get invited on this cruise?’”

 

In the end, it is doubtful the yacht is owned by Buffett. An employee of the 65-year-old composer of “Margaritaville” said his boats, which include the 124-foot “Continental Drifter III,” aren’t available to the public for charter.

 

In a meeting hastily convened last Wednesday, sources said Merritt, the new CEO, told workers he aimed to beef up compensation for high-producing sales reps and mend ties with retail partners.

 

Still, some Benjamin Moore veterans are skeptical after years of ruthless cost cuts that have hobbled the business.

 

“Did Mr. Buffett just not have his eye on the ball, or is it just the culture of Berkshire Hathaway?” asked an ex-exec.

 

“That’s what Benjamin Moore people get together and shoot the breeze about.”