Buffett backs Barra in General Motors board battle

Warren Buffett could not be any clearer.

General Motors (GM) CEO Mary Barra is doing a good job leading the automaker, he told CNBC's "Squawk Box" on Monday. He said it's also a bad idea for the its board to include a director who will be compensated by a group of hedge funds that own a stake in the automaker.

"I totally disagree with the idea of putting somebody on the board who has an option on some other people's stock which is only good for two years," Buffett told CNBC two days after sending out his annual letter to shareholders.

"To have somebody sitting there in the boardroom who has a two-year time horizon when they make money or it goes to zero after that is just not the way to run a business."

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Buffett's comments were aimed at Harry Wilson, the man who—as part of President Barack Obama's Auto Task Force—helped advise the administration about GM's bankruptcy, and how it should be organized as a new company.

Last month, Wilson—who represents four investment funds that own 34 million GM shares— said he would nominate himself to the automaker's board , with the goal of getting it to return a greater percentage of cash to investors.

Many were quick to question his motives. That's because Wilson has an agreement to be paid up to 4 percent of the gain in value of the shares owned by the funds he represents. But he was quick to defend himself following Buffett's comments, telling CNBC that his interest in GM is not purely short term.

"I led the restructuring in 2009 that gave GM a new lease on life and worked to rewrite the plan proposed by GM management at the time that, had it been approved, would NOT have resulted in the successes GM has experienced since 2009," Wilson wrote in an e-mail.

"In other words, I have already demonstrated once that I can help GM build a business that is highly successful in the long-term, and our full proposal—which is MUCH broader than just the buyback—would help take it to the next level."