CEOs Get Fewer Perks

Date: August 28 2008
Source: BusinessWeek
Website: http://www.businessweek.com/bwdaily/dnflash/content/aug2008/db20080827_040884.htm?chan=top+news_top+news+index_news+++analysis

It may still be good to be king, but increasingly the job is coming with fewer perks. In its third annual study of fringe benefits for chief executives, compensation research firm Equilar found that the median values of seven of the nine major CEO perquisites that it tracks—from personal aircraft use to country club memberships—were down or remained flat from 2006 to 2007. The prevalence of such swanky extras fell too, with most categories showing lower rates of occurrence this year.

The decline is an expected result of Securities & Exchange Commission rules that went into effect last year. The new rules stipulate that companies disclose perks that cost more than $10,000, far lower than the previous $50,000 threshold. With a brighter spotlight on lavish extras that could prove embarrassing to a company, more boards have been ending or reducing CEO benefits. "For many shareholders, the presence of excessive perquisites has become an acid test on governance," says David Wise, a senior consultant in the compensation practice at management consulting firm Hay Group.