Berkshire racked up a 13.9 percent gain in per-share book value in 1994, while the S&P only edged 1.3 percent higher. In his annual letter, Buffett criticized stock option plans that reward managers when companies retain earnings rather than distributing them to shareholders. "The combination of a ten-year option, a low dividend payout, and compound interest can provide lush gains to a manager who has done no more than tread water in his job."