CEOs Still Getting Big Perks Despite Pay Backlash

Executive compensation is under fire, but CEOs are still enjoying perks such as company jets, personal security, financial planning advice and club memberships. Read on to see which tech companies are paying more than $1 million in perks and which ones are anti-perk (notably Cisco and Microsoft).


Lavish life: Jets, personal security, club memberships and more

Executive compensation is under fire, but CEO perks are alive and well. Top executives at some of the largest tech companies enjoy access to company jets, personal security, financial planning advice, club memberships and more. Across all industries, the median value of these and similar perks rose nearly 7% in 2008, according to an Associated Press analysis, even as overall CEO compensation fell 7%. Read on to see which tech companies are paying more than $1 million in perks and which ones are anti-perk (notably Cisco and Microsoft). Slides are arranged from the costliest to the cheapest perks, and our report includes extras doled out to CEOs at eight of the largest non-tech corporations, for the sake of comparison. Data is drawn from companies' proxy statements, as filed with the U.S. Securities and Exchange Commission.


As it has for the last few years, Oracle incurred costs and expenses of $1.4 million to secure CEO Larry Ellison's residence in 2008. (Oracle paid $1.7 million in 2007, $1.8 million in 2006 and $1.4 million in 2005 for Ellison's residential security.) But Oracle isnt the only party that pays for Ellisons home security: "Mr. Ellison paid for the initial procurement, installation and maintenance of the equipment for this system and the replacement of any equipment, and we paid for the annual costs of security personnel," Oracle said in its proxy statement.


Michael Dell's sole reported perk for fiscal 2009 is an expensive one: personal and residential security totaling $1.2 million. (The company paid $1 million in 2008 and $1.1 million in 2007 for the same.) However Dell in 2009 didn't partake of some of the other perquisites the company offers its executive officers, including financial counseling and tax preparation services; an annual physical for each executive officer and his or her spouse or domestic partner; and personal and business technical support.


Qwest CEO Edward Mueller's perks included $493,781 for personal use of corporate aircraft and relocation benefits of $48,279. He also received a flexible benefit payment of $75,000, which Qwest said "is a cash payment made at the beginning of each year in lieu of the various perquisites commonly paid to executives at other companies. Although these payments are intended to replace the piecemeal payment of most perquisites, we do not require executives to use the money for any particular purpose and we do not ask executives to report to us the purposes for which the money is used."


Perks and personal benefits for Ford President and CEO Alan Mulally in 2008 added up to $602,954 — including $344,109 for personal use of company aircraft, $112,114 for home security, and $109,697 for temporary housing. Separately, Ford paid Mulally $239,834 for tax reimbursements and $32,976 for insurance premiums on Mulally's behalf. Ford's executive perks also include fuel and car washes for evaluation vehicles loaned to executives. "This program requires officers to provide written evaluations on a variety of our vehicles, providing important feedback on the design and quality of our products," the company said in its proxy statement.


Google CEO Eric Schmidt's perks in 2008 included $402,562 for personal security (a drop from the $474,662 paid for Schmidt's personal security in 2007 and $532,755 paid in 2006) and $106,201 for personal use of aircraft chartered for Google business.


IBM chief Sam Palmisano's 2008 perquisites included personal travel on company aircraft valued at $493,881, along with financial planning, use of company autos, personal security, and family attendance at company-related events (IBM didn't disclose the value of these other perks).


HP chief Mark Hurd's perquisites included security services and systems valued at $255,872; personal aircraft usage totaling $135,734; a $71,482 mortgage subsidy attributed to relocation expenses; and $18,000 for financial counseling. (Hurd in February announced plans to cut 20% of his base pay as part of a company-wide effort to cut employee salaries and benefits.)


Motorola's co-CEO Sanjay Jha received perks totaling $392,220, which included $336,106 for personal use of company aircraft, relocation benefits, and personal use of a car and driver.


Motorola's co-CEO Greg Brown received perks totaling $371,902, which included $222,200 for personal use of company aircraft, $102,202 for personal use of a car and driver, $40,000 for security system installation and monitoring, and costs for financial planning


At $189,449, personal use of company aircraft represents the largest perk received by GE chairman and CEO Jeff Immelt — who notably declined his 2008 bonus and long-term compensation valued at $11.7 million. The company also paid $22,844 for other perks, such as car service fees, home security and an annual physical examination. In addition, GE paid $152,476 for life insurance premiums on behalf of Immelt.


Perks awarded to Verizon CEO Ivan Seidenberg in 2008 included $143,489 for personal use of company aircraft, $15,462 for personal use of company vehicle and $10,000 for financial planning services. The company also contributed $150,057 to an executive life insurance policy for Seidenberg that provides a $10 million death benefit. That policy is part of a much bigger "golden coffin" that Verizon estimated would have been worth $35.5 million (including payments of short-term incentives and long-term stock grants) if Seidenberg were to have died on Dec. 31, 2008.


AT&T chief Randall Stephenson logged $300,136 in personal benefits in 2008, including financial counseling valued at $14,000; auto benefits totaling $26,834; personal use of company aircraft valued at $83,022; supplemental health insurance premiums worth $9,288; club memberships worth $19,565; relocation costs of $141,618 in connection with AT&Ts Dallas headquarters move; communications costs of $1,540; and home security valued at $4,269.


Perquisites for ExxonMobil chairman and CEO Rex Tillerson included personal security costs totaling $222,985; personal use of company aircraft valued at $41,980; personal use of company properties worth $3,271; and financial planning services valued at $9,300. ExxonMobil noted in its proxy statement that the company discontinued reimbursement for club memberships beginning in 2007.


CA CEO John Swainson received a number of perks in 2008, including $199,722 for personal aircraft use, a $37,080 housing allowance, $21,000 in matching charitable contributions, and $4,414 for personal use of a car and driver.


Perks allotted to Bank of America chief Kenneth Lewis in 2008 included $220,267 for personal use of company aircraft; $18,401 for tax preparation and financial planning services; and $13,791 for home security and secured parking. "Our executive officers receive health and welfare benefits, such as group medical, group life and long-term disability coverage, under plans generally available to all other United States-based salaried associates. Consistent with our pay-for-performance philosophy, we provide very few executive fringe benefits," the company said in its proxy statement.


Perks awarded to EMC chief Joe Tucci in 2008 included $209,671 for personal aircraft use; $15,000 for tax and financial planning; a $7,200 auto allowance; and $4,168 for an annual physical. EMC noted in its proxy statement that, effective Jan. 1, 2009, the company eliminated the car allowance for named executive officers "as part of our ongoing cost reduction initiatives." (In March, EMC announced that its top five executives, including Tucci, were taking 10% pay cuts.)


Among the perks received in 2008 by ConocoPhillips chairman and CEO James Mulva are: $54,802 for personal use of company aircraft; $25,409 for a company-provided car; $20,000 for financial planning; $230 for home security; $113,537 as part of a now-defunct charitable gift program for ConocoPhillips' directors; and $18,500 for the companys matching gift program.


Personal use of company aircraft appeared on Symantec CEO John Thompson's list of perks, to the tune of $184,689, along with $22,906 for Thompson's attendance at the company's sales achievers trip and board retreat. Thompson retired as CEO in April of this year, but remains chairman of the company.


The biggest perk doled out to H. Lee Scott, Jr., who retired as Wal-Mart's president and CEO in January, was his use of company aircraft, valued at $149,093. In 2008 the company also paid for a physical examination for Scott, as well as home security equipment.


Perks doled out to Chevron chairman and CEO David O'Reilly in 2008 included $93,876 for personal aircraft use, $21,870 for financial counseling, $2,237 for auto use, and $978 for home security.


Sprint Nextel CEO Dan Hesse received perks and personal benefits totaling $113,427, according to the company's proxy statement. The bulk of that was for security equipment and services for Hesses residence, which cost the company $91,462. Non-business aircraft use and personal IT and tech support accounted for the remainder.


Citi CEO Vikram Pandit didnt receive any significant perks as part of his 2008 compensation package -- the company detailed just $2,393 attributed to ground transportation. No security, no financial planning services and no outstanding tab for personal aircraft usage. "In accordance with applicable law, Mr. Pandit has entered into an Aircraft Time Sharing Agreement with Citiflight, Inc. (a subsidiary of Citigroup Inc.) that allows him to reimburse Citi for the cost of his personal use of corporate aircraft," the company said in its proxy statement. Pandit has said he would forgo his 2008 bonus and take just $1 a year in salary until Citi returns to profitability.


Perks are a rarity at Cisco, and John Chambers' total compensation in 2008 included none of the usual extras. The company detailed its position in its proxy statement: "Cisco's named executive officers generally do not receive any special benefits such as payment of club memberships, financial planning or executive dining rooms. Other than their right to participate along with other enumerated employees in the nonqualified deferred compensation plan... there are no special employee benefit plans for the named executive officers and Cisco's named executive officers are eligible to participate in the same employee benefit plans and on the same basis as all other Cisco employees."


Executive perks aren't the norm at Microsoft either, and CEO Steve Ballmer's 2008 pay package reflects the company's stance. "Microsoft's named executive officers are eligible for the same benefits made available to other employees, including our 401(k) plan, employee stock purchase plan, healthcare plan, life insurance plans, and other welfare benefit programs," the company's proxy statement reads. Furthermore, "Perquisites are provided to our named executive officers only in special situations. During fiscal year 2008, we did not provide any significant perquisites to our named executive officers."


Apple CEO Steve Jobs' total compensation in 2008 was $1. "The current compensation program for the named executive officers, including Mr. Jobs, generally does not include... perquisites or personal benefits that are not available to employees generally..." Apple said in its proxy statement.


Executive perks are rare at Network Appliance, and CEO Dan Warmenhoven's 2008 compensation package contained no significant extras. "Named executive officers are eligible to participate in all of our employee benefit plans, such as medical, dental, vision, group life and accidental death and dismemberment insurance and our 401(k) plan, in each case on the same basis as other employees," NetApp said in its proxy statement. "The only retirement benefits that we offer our named executive officers are those under the Executive Retirement Medical Plan."


Also in the no-special-perks club is BMC: "We do not provide supplemental retirement plans, a top hat deferred compensation program, special benefits or excessive perquisites," the company said in its proxy statement. CEO Robert Beauchamp's 2009 compensation included none of the usual CEO perks.

Copyright © 2009 IDG Communications, Inc.

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