Disclosure sensitizes directors to providing perks
Companies' top officers often get lavish perks, but disclosure
has sensitized directors lately.
By Aldo Svaldi
Friday, June 19, 2009
Liberty Media provides chief executive Greg Maffei and chairman
John Malone access to an apartment, a company car with driver
and catering services when they visit
New York City.
Money manager Janus Capital Group paid $181,670 in
personal-protection services for CEO Gary Black and his family
And restaurant chain Red Robin Gourmet Burgers continues to pick
up the tab to fly CEO Dennis Mullen between
Colorado and his family home in
Arizona, at a cost of nearly $250,000,
including taxes, in 2008.
Those are some of the more unusual perks
companies provided to their executives last year, as disclosed
in proxy statements.
When public companies report on executive pay, they must include
the perquisites, or perks, provided to top managers under a
category called "other compensation."
Public disclosure has made directors more sensitive about the
perks they provide management and the justification behind them.
"Companies should provide those perquisites that are important
for the organization and make sense," said Myrna Hellerman, a
senior vice president with Sibson Consulting in
Many also need to do a better job of explaining in detail any
unusual items, she advised.
Covering a physical exam, something Ball Corp. does, appears
justifiable, as do financial-planning services that Berry
Petroleum, Western Union,
Liberty Media and others do, she said.
In the case of the bodyguards, a perk usually reserved for
danger zones such as
the Janus board of directors covered the cost but without
explaining why in the proxy.
"It was a specific and unusual threat that affected a handful of
CEOs and their families at asset-management firms," said Shelley
Peterson, Janus spokeswoman.
Black hasn't requested those services in the past and doesn't
plan to use them in the future.
Liberty Media explains in its proxy that it owns a New York apartment for business but that
executives use it from "time to time" for personal purposes.
Some perks represent holdovers from the past that are becoming
harder to justify, especially in tough economic times.
Companies used to cover country-club or golf memberships because
they helped executives mix socially and conduct business.
In the Internet age, that is becoming less important.
Homebuilder MDC Holdings gave CEO Larry Mizel $7,800 toward club
dues, while chief operating officer David Mandarich received
$6,250. Those perks have been eliminated.
Car allowances are another fading perk, but not at every
company. Most Red Robin executives received a car
allowance of $10,200 each. Two executives at Liberty
Global get $26,599 each in auto allowances.
Another questionable perk is the personal use of corporate
aircraft. Notable frequent fliers include Qwest CEO Ed
Mueller, who claimed $493,781 of personal air time, and Liberty
Global CEO Michael Fries, who used $122,055.
Aldo Svaldi: 303-954-1410 or