I was intrigued by a post that just appeared in Footnoted.org about some companies whose recent proxy statements disclose they are reimbursing top officers for the cost of having their cars washed. We have all heard about the expensive perks large corporations shower on their executives: country club memberships, use of corporate jets, personal financial advisors, etc.—all in addition to munificent salaries and bonuses. Yet are companies also taking care of mundane everyday expenses as well?
In theory, it shouldn’t be possible to learn these details, since even under the more rigorous disclosure rules imposed by the SEC in 2006, companies are not required to list perks worth less than $10,000. Nonetheless, I decided to follow Footnoted’s lead and search the database of recent proxy statement to look for other kinds of personal services being provided to executives. Here’s an assortment of what I found.
SLM Corp.—the student loan company also known as Sallie Mae—reports that it not only provided a townhouse for president C.E. Andrews but also paid for “real estate taxes, homeowner’s insurance, neighborhood association fees, repairs and improvements, utilities, lawn and housekeeping services, and pest control.”
Harris & Harris Group—a business development company focusing on nanotechnology—pays for both a health-club membership and a personal trainer for chief executive Charles E. Harris.
BioLase Technology—a producer of dental lasers—paid the laundry expenses of Keith Bateman while he was executive vice president of the company.
Military contractor Raytheon and numerous other companies pay for security systems at the homes of their top executives.
Home Depot pays for the home internet services used by their top executives and picks up the tab when they send funeral flowers.
Beermaker Anheuser-Busch has a company barber shop for top executives and provides free beer “for personal use and entertaining.”
The costs of these perks are trivial in comparison to the cash compensation the executives receive and are barely a blip in the overall finances of the companies. But they illustrate the regal manner in which the corporate elite are treated. How can a CEO who doesn’t have to pay many of his or her own personal expenses—including in some cases the cost of six pack—understand the situation of those who get nothing for free?