On top of big CEO salaries, companies pile on perks
Last year, the median value of perks received by CEOs of big public companies was nearly $162,000, an increase of more than 9 percent.
The Associated Press
NEW YORK — Wynn Resorts kept a suite open all year at its tony Las Vegas hotel and casino for founder and CEO Steve Wynn, at a cost of nearly $452,000.
Former IBM CEO Samuel Palmisano was guaranteed an administrative assistant and furnished office for life as a retirement gift — plus a $1 million office renovation.
Chip-maker Advanced Micro Devices bought the house CEO Rory Read struggled to sell for $790,000 — and gave him another $180,000 to cover his underwater mortgage.
These are not uncommon extravagances in the exclusive world of CEO perks, replete with bodyguards, chauffeurs and private jets.
Last year, the median value of perks received by CEOs of big public companies was nearly $162,000, an increase of more than 9 percent, according to executive-pay-research firm Equilar. Perks declined in 2009, but have risen for three straight years.
Perks are a reminder of how CEOs’ lifestyles are far removed from those of their shareholders, customers and employees.
Last year, companies paid for their CEOs’ country-club memberships, let them use corporate planes for personal travel and gave them health-care plans better than those for their employees, among other perks.
Some corporate-governance experts say giving perks to executives already making millions just exacerbates the public perception — fair or not — that they’re more interested in lining their pockets than helping the company.
“They might do without a plane,” says Brandon Rees, acting director at the investment office of the AFL-CIO union group, referring to CEOs’ use of company planes for personal travel. “And instead invest it in (research and development).”
Companies tend to defend perks as legitimate business expenses that ultimately benefit shareholders: Flying on private planes keeps the executives safe. Country-club memberships help them network.
An attractive package helps a company lure the best talent.
“It is in the company’s best interest if that person doesn’t have to think about daily things as much as you or I might need to,” says Jay Meschke, president of CBIZ Human Capital Services, a compensation and human resources consultant outside Kansas City, Mo.
“You want to make sure that 100 percent of this person’s efforts are devoted to the company’s success.”
Here are some other notable perks from 2012, spotted with help from GMI Ratings, which ranks companies on corporate governance metrics, and Footnoted.com, which scans SEC filings for institutional investors:
• Diebold, an ATM security company, got rid of country-club benefits for all its executives except CEO Thomas Swidarski, who Equilar calculated would earn $6.1 million for 2012.
• Las Vegas Sands spent $2.8 million to provide security for CEO Sheldon Adelson and his family. That blew away the $1.6 million spent on a home security system by Amazon for Jeff Bezos, who is No. 2 in that category so far, according to GMI Ratings.
• Constellation Brands, maker of Svedka vodka and Black Velvet whiskey, gave its CEO a $10,000 “product allowance,” so he could enhance his “knowledge and appreciation of our products.” CEO Robert Sands, who made $7.7 million in fiscal 2012, used up $5,532 last year.