Adam Bell, Charlotte Observer, N.C.
Sept. 20, 2009
Advocates say extras are valued more highly by execs than same amount in paycheck. Still,
some companies are cutting.
While still plentiful, perks could change more dramatically than overall CEO pay.
Ranging from income tax reimbursement to personal use of office staff, perks comprise a small portion of overall
compensation yet remain a high-profile symbol of corporate excess for some.
"These days, perks are particularly noxious," said Charles Elson, who runs the University of Delaware's Weinberg
Center for Corporate Governance said. "It's over-reaching, especially in a down economy."
About a third of the Carolinas 50 companies provided such perks as personal use of corporate planes, country
clubs dues and tax preparation or financial planning, according to a review of the companies' regulatory filings.
Nine had home security systems and annual physicals covered by the company. Other perks paid by companies
included credit card fees, long distance phone service and even the legal bills for the CEOs' employment
agreements.
Mark Rosen, with consultants Pearl Meyer and Partners in Charlotte, expects many perks to vanish.
"(Compensation) committees are asking the question why can't you (cover perk expenses) with the money we are
paying you," he said.
Companies often justify perks and benefits the way Charlotte industrial manufacturer SPX Corp. did, saying in a
securities filing that it provides them "to attract and retain executives in a competitive marketplace, and (SPX)
believes these benefits are generally consistent with market practices."
SPX called perks and benefits cost-effective because "they command a higher perceived value to the named
executive than our actual costs." CEO Chris Kearney's perks include personal use of company aircraft (valued at
$53,124); financial planning ($10,675); and other expenses ($69,292) such as country club dues, a car allowance,
use of corporate sports and entertainment boxes and an executive physical, according to regulatory filings. The
company in 2008 also didn't charge him $79,650, which it deemed to be the market interest rate on a tax-free $1.5
million loan SPX offered when he moved to Charlotte in 2001.
Kearney's perks were part of a $10.3million compensation package that placed Kearney No. 3 overall among
CEOs in the Carolinas last year.
Progress Energy, a Raleigh utility, examined perks last year to see if they were competitive and consistent with its
compensation philosophy. It decided to dump several perks, including personal use for executives or spouses of
company aircraft, country club memberships, car allowances and non-business use of event tickets.
A recent Equilar study found that in the first few months of this year, more than 50 companies in the S&P 500
index reduced or eliminated tax reimbursement programs for executives. The median value for some CEO perks is
on the rise, however, the study found.
Then there's RF Micro Devices.
The Greensboro semiconductor component maker said its corporate culture never held a place for perks.
"We believe that perquisites are viewed by some of the shareholders and employees as being discriminatory in
nature," the company said in a securities filing. "These highly visible (and sometimes controversial) compensation