It's hard to overemphasize the importance of who is CEO of a company.

We know a lot about what Warren Buffett looks at when he makes an investment or buys company outright. But it turns out one thing that isn't discussed is of huge importance to Buffett himself.

In the 2005 letter to Berkshire Hathaway (BRK.A 0.64%) (BRK.B 0.54%) shareholders, Warren Buffett penned the quote above when discussing the merger of Procter & Gamble (PG 0.86%) and Gillette which was finalized as the year drew to a close.

Source: www.insidermonkey.com

When it was all said and done, Berkshire Hathaway recognized a $5 billion pre-tax gain as a result of the merger. Considering the original cost of the Berkshire Hathaway investment in Gillette was $600 million, it is one more example to jot on the long list of successes by Buffett.

But it turns out one of the driving factors behind Buffett's investment success with Gillette wasn't simply its cost, or the "moat" around its business model, but -- taking the moat language a little further -- the man atop the castle itself.

The power of leadership
Jim Kilts took the helm of Gillette in 2001, and Buffett notes before he arrived, "the company was struggling," as the acquisition of Duracell in September of 1996 for $7 billion  "cost Gillette shareholders billions of dollars."

Buffett suggests the acquisition was a prime example of the company's "blunders," as it could neither efficiently nor effectively use its earnings to generate returns for shareholders. But Kilts swiftly changed that. Buffett went on to say:

Upon taking office at Gillette, Jim quickly instilled fiscal discipline, tightened operations and energized marketing, moves that dramatically increased the intrinsic value of the company. Gillette's merger with P&G then expanded the potential of both companies.

And while Buffett notes as a result of his work, "Jim was paid very well – but he earned every penny."

The key to remember
The compensation of CEOs draws endless attention, and much has been made of Buffett's absence in voting on the compensation of Coca-Cola (NYSE: KO) executives this year. It was just a few lines after discussing Kilts in the 2005 letter when Buffett openly admits "too often, executive compensation in the U.S. is ridiculously out of line with performance."

Yet the thing with executive compensation is that in select instances, Buffett also suggests:

Indeed, it's difficult to overpay the truly extraordinary CEO of a giant enterprise.

So is Buffett full of contradictions when it comes to this? The answer: Of course not.

In 2008, Buffett said, "Price is what you pay; value is what you get." And the same reality applies not just to the investments in stock, but those leading the company. And taking a step into another industry, consider LeBron James for a moment.

Source: Flickr / zennie62.

With the Heat now in their fourth-straight NBA Finals -- only the fourth time a team has done that  -- questions about LeBron's ability to lead a team have (rightfully) vanished. But what isn't discussed is that despite his $19 million salary, LeBron may in fact be underpaid.

In 2010, the Wall Street Journal suggested if the NBA didn't have such restrictive salary cap rules -- it limits how much a maximum contract can be -- LeBron should be earning $43 million a year.  Last year, an economist at the University of Oklahoma, Kevin Grier, told NPR LeBron is "getting hosed," by his current salary. 

What we can learn
In the examples of both LeBron James and Jim Kilts, the key here isn't the pay the men receive, but the value they provide.

Jim was able to improve Gillette on multiple fronts, from accounting, manufacturing, and even marketing. In the same way, LeBron is known for his ability and contributions offensively and defensively. His skill allows him to not only play, but excel on any area of the basketball court.

Discussion surrounding the value of individual leaders occurs often in sports, but not nearly enough when we make investments.

When we make investments, we can be trapped into thinking the only critical considerations are those quantitative ones based on what value can be found on balance sheets and income statements. But from Buffett, we can learn we must explore not only the value offered by the company and its business, but those at the top of it as well.