Kiewit Corporation
I heard few good things about Kiewit Corporation from Warren Buffett during the time I was eager to know more about Warren Buffett. Three character attributes, which Warren Buffett told us publicily, came from the late Peter Kiewit, the second generation.
With the hunger to know how Kiewit is so special apart from other companies in the same industry, I bought second-hand book called Kiewit: An Uncommon Company.
Reading all 14 chapters taught me so much that I now understand how the growth is like from small company to first class big company.
I learnt that Warren Buffett don't support stock option. I understood from his point of view that it do not encourage accountability and ownership. Instead, with a poorly designed exercise price, it invite a lot of greedy people to be employees with an intention to make quick money and make a quick exit out of the employment.
The last chapter, which is chapter 14, showed me the success of the issuing real stock to loyal employees. It is interesting to find out that when employees quit or retire, they can sell it back to Kiewit at book value (if I am not wrong). That is a quite incentive to encourage them to build the company value.
Logically, you need to increase net profit every year, which lead to an increase in retained earnings and thereby increase in equity. When there is an increase in retained earnings, the cash at bank will increase caeteris paribus. With the right capital allocation, the cash at bank can be re-invested by purchasing new asset or increase operating expense budget through hiring new employees or increase wages of deserving employees. When this is done correctly, it should lead to a net profit or even higher profit (than last year one).
It makes a lot of sense to set book value as a determining selling price.
What a wonderful book! Thank you for writing the book and I know more about Kiewit Corporation, Jeffrey L. Rodengen
With the hunger to know how Kiewit is so special apart from other companies in the same industry, I bought second-hand book called Kiewit: An Uncommon Company.
Reading all 14 chapters taught me so much that I now understand how the growth is like from small company to first class big company.
I learnt that Warren Buffett don't support stock option. I understood from his point of view that it do not encourage accountability and ownership. Instead, with a poorly designed exercise price, it invite a lot of greedy people to be employees with an intention to make quick money and make a quick exit out of the employment.
The last chapter, which is chapter 14, showed me the success of the issuing real stock to loyal employees. It is interesting to find out that when employees quit or retire, they can sell it back to Kiewit at book value (if I am not wrong). That is a quite incentive to encourage them to build the company value.
Logically, you need to increase net profit every year, which lead to an increase in retained earnings and thereby increase in equity. When there is an increase in retained earnings, the cash at bank will increase caeteris paribus. With the right capital allocation, the cash at bank can be re-invested by purchasing new asset or increase operating expense budget through hiring new employees or increase wages of deserving employees. When this is done correctly, it should lead to a net profit or even higher profit (than last year one).
It makes a lot of sense to set book value as a determining selling price.
What a wonderful book! Thank you for writing the book and I know more about Kiewit Corporation, Jeffrey L. Rodengen
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