In his annual letter to shareholders, 94-year-old Buffett paid homage to “one-of-a-kind” Liegl, who died in November at the age of 80. Liegl was the CEO of Forest River, an RV maker nestled in Indiana, which turned out to be one of Berkshire Hathaway’s soundest investments.

Buffett told shareholders he was contacted on behalf of Liegl in June 2005: The introductory letter said Liegl would sell only to Berkshire, and outlined the price that the RV boss—the 100% owner of the brand—expected to be paid.

“I liked this no-nonsense approach,” Buffett recalls in the letter, and responded in kind.

A week later Buffett and Liegl met, with the man now worth $150 billion on the spot offering to pay Liegl whatever salary he wished for.

“I asked Pete what his compensation should be, adding that whatever he said, I would accept,” Buffett recalled. “This, I should add, is not an approach I recommend for general use.

“Pete paused as his wife, daughter, and I leaned forward. Then he surprised us: ‘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.’”

Buffett and his former right-hand man, Charlie Munger, have famously drawn the exactly six-figure salary for many years—a marked departure from other big-name CEOs, who often see their pay packages spiraling into the tens of millions.

“After I picked myself off the floor, Pete added: ‘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,’” Buffett continued. “I replied: ‘Okay, 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 added that Liegl had brought his wife, Sharon, and daughter, Lisa, along to the meeting.

Following the meeting, “the four of us then went to dinner at Omaha’s Happy Hollow Club and lived happily ever after,” Buffett added. “During the next 19 years, Pete shot the lights out. No competitor came close to his performance.”

Long-term gambles

Forest River’s performance over the years has indeed excelled more so than in other parts of the Berkshire portfolio.

Berkshire’s annual report for 2024 for example notes, “Consumer products group revenues were $14.9 billion in 2024, an increase of 2.2% compared to 2023. The increase was primarily attributable to higher revenues from Forest River, Brooks Sports and Duracell, partially offset by lower revenues from Fruit of the Loom, Garan and Richline.”

As a private company now owned by Berkshire Hathaway, Forest River itself does not have to publicly report its sales, though it does refer to itself as a “multibillion-dollar enterprise.”

However, as part of Berkshire—a conglomerate that does float on public exchanges—details of its subsidiaries’ performance are shared in part.

Read more from Fortune

For example, in 2024, Forest River’s revenues increased 6.4%—an increase of 7.9% in unit sales—a boost inclusive of business acquisitions made in 2024 and 2023.

While Forest River suffered a tough 2023 due to inflation, higher interest rates, and other macroeconomic factors, the strength of the brand was also noted in 2022, when Berkshire reported: “Consumer products group revenues increased $481 million (3.1%) in 2022 versus 2021, reflecting an 8.0% increase from Forest River.”

While 20 years on Forest River is still earning shout-outs from Berkshire, Buffett did take something of a gamble on the relatively unheard-of brand.

As well as offering Liegl whatever he wanted in terms of salary, Buffett also purchased real estate relating to the business based on the value he was given at the time. He explained in his letter released over the weekend: “Pete…mentioned that he owned some real estate that was leased to Forest River and had not been covered in the June 21 letter. Within a few minutes, we arrived at a price for those assets as I expressed no need for appraisal by Berkshire but would simply accept his valuation.”

The risk paid off, Buffett reflects: “Every company doesn’t have an easy-to-understand business, and there are very few owners or managers like Pete. And, of course, I expect to make my share of mistakes about the businesses Berkshire buys and sometimes err in evaluating the sort of person with whom I’m dealing.

“But I’ve also had many pleasant surprises in both the potential of the business as well as the ability and fidelity of the manager. And our experience is that a single winning decision can make a breathtaking difference over time.

“Mistakes fade away; winners can forever blossom.”