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A study on executive compensation done for The New York Times found that median pay for top executives at 200 large companies rose 23 per cent in 2010, to $10.8 million.That doesn’t bother me as much as I’m sure it does others. Companies reported very strong profits, and I don’t see why it’s anyone’s business other than shareholders how much executives are paid.
But if you’re infuriated by big bosses making big bucks, you’re liable to become downright apoplectic when you read about the fringe benefits. A report by Footnoted.com, part of the research firm Morningstar, identified the “Top 10 Executive Perks” gleaned from corporate filings.
Extravagant sums for security services and private jet use feature prominently on the list, as does reimbursement for housing expenses. Here are some of the highlights, if that’s the right word:
Barry Diller, chairman and senior executive at IAC/InterActiveCorp. (IACI) and Expedia (EXPE). “In 2010, he racked up personal flights on company aircraft to the tune of $644,530 at IAC/InterActiveCorp. . . . Meantime, over at Expedia . . . Diller clocked another $605,786 of personal flights.” No doubt he had a long way to go and a short time to get there, but you might have thought that his connections at Expedia, a leading online travel service, would have enabled him to find something a bit less pricy.
Martha Stewart, chief editorial media and content officer of Martha Stewart Living Omnimedia (MSO). “When the executive is the brand, there seems to be no end to the perks a company can (and will) pay for.” Martha Stewart Living Omnimedia paid $1.95 million to Stewart’s MS Real Estate Management Co. merely to film her television show at one of MS Real Estate’s properties. MSO also paid for Stewart’s security and telecommunications systems, Footnoted says, as well as “up to $100,000 of approved and documented household expenses.”
Don Blankenship, former chairman and chief executive of Massey Energy (MEE). Blankenship left the company after an explosion at a Massey coal mine in West Virginia killed 29 miners in April 2010. “When he stepped down . . . he went far from empty-handed: In addition to $10.4 million in pay and regular benefits while working and $39 million in accumulated retirement benefits, he got $14.4 million in severance and post-employment perks. That includes office space and a secretary for up to five years, two years of health-care benefits, a two-year consulting contract, a free house and land on what used to be company property, reimbursement of $257,111 for taxes on the free house and an option on land next to the house.”
Nolan Archibald, executive chairman of Stanley Black & Decker (SWK). A bit of everything here. Footnoted records the following payments: $526,391 of personal plane travel; $39,671 in reimbursed financial-planning costs; $9,522 for personal use of a company car; $16,200 as an additional car allowance; $4,528 in “personal use of tickets to athletic and other entertainment events”; $1,820 in club dues and $2,635 in free tools or other company merchandise. That may not sound like much, certainly not compared to Blankenship and Stewart, but it’s in the ballpark after adding a healthy chutzpah premium. As Footnoted points out, “the recently combined tool powerhouse declares boldly in its proxy that it ‘does not believe it is necessary for the attraction or retention of executive talent to provide our executives with a substantial amount of compensation in the form of perquisites.’ ” Not necessary, but apparently it’s not out of the question, either.