7/19/2011 1:08 PM ET|
5 big vacation-time executive perks
Taking time off is a lot easier when it starts with fueling up the corporate jet. Here's a look at some of the big travel-related perks CEOs and other top executives enjoy.
The summer travel season is on. Along with the sun and fun, that means dealing with the pricey air travel or fueling up the family car, expensive hotels, concerns about security in unfamiliar places and the nagging fear you can't really afford to go.
But a lot of CEOs have found ways to avoid such worries when they travel. They just bill the shareholders.
Even as companies keep cutting expenses in a sketchy economy, juicy CEO perks survive and thrive. Let's take a look at some of the big perks handed out over the last year that can help executives enjoy their summer travels.
1. Free airfare
One of the big expenses for a summer trip is often be airfare. But CEOs don't usually have to jockey for the best ticket prices. In fact, shareholders routinely foot the bill.
And we're talking about fueling up the company jet for personal vacation trips -- not $800 to fly the family to Disneyland.
Consider the example of billionaire Barry Diller, who gets a double share of this perk as the top exec of two companies.
Last year, shareholders of IAC/InterActiveCorp (IACI, news), where he is senior executive and chairman, paid $644,500 for his personal air travel. Diller is also senior executive and chairman at Expedia (EXPE, news). There, he got an additional $605,800 worth of personal flights, said Michelle Leder of Morningstar's Footnoted and FootnotedPro, which help investors by dredging up insights from the fine print in corporate filings.
The grand total: $1.25 million worth of personal air travel. "We wouldn't be surprised to learn Diller lives on plane," jokes Leder.
Diller could afford buy his own plane tickets, of course. Last year, he got $8.2 million in total pay from these two companies -- $3.7 million at IAC/InterActiveCorp and $4.3 million at Expedia. (For comparison's sake, median pay for CEOs at S&P 500 companies rose to $8.5 million last year from $6.3 million the year before, according to GovernanceMetrics International, an independent corporate governance research company.)
Diller may be the king of this perk, but he is not without competition. Last year Wynn Resorts (WYNN, news) shareholders paid $942,600 for personal use of the corporate jet by CEO Stephen Wynn, who got $14.6 million in total pay that year.
And while no single exec at Chesapeake Energy (CHK, news) could match Diller or Wynn, six of them collectively billed Chesapeake an impressive $2 million for personal flights on the corporate jet last year. Chesapeake shareholders had to pay so much partly because directors get use of the corporate jet for private travel -- an unusual practice, says ISS Proxy Advisory Services. Usually, only CEOs and other top execs get to take the jet.
All of these companies declined to comment except Wynn Resorts, which says it prefers Wynn use the company jet for personal travel for safety reasons. (CEO security is a typical explanation for this perk.)
And Wynn Resorts stock has advanced sharply, to around $162 recently from about $13 when it first started trading in 2002, which means shareholders have been rewarded nicely with Wynn at the helm, a spokeswoman said.
2. Free wheels
If you're not flying, you're probably piling into the family car this summer. And it's not cheap, considering the cost of the car itself, insurance, gasoline and repairs. But those are costs you don't need to worry about if you're one of the many CEOs supplied with a company car -- which often comes with a driver.
Last year, for example, Bank of New York Mellon (BK, news) shareholders paid $188,500 for a car and driver for CEO Robert Kelly, who got $16.1 million in total pay. The company does get points for reducing lots of perks recently, though, including personal use of club memberships, financial planning, parking and home security, says ISS Proxy Advisory Services.
At Talbots (TLB, news), CEO Trudy Sullivan doesn't get just her car allowance, worth $25,000 last year. The CEO of this women's apparel retailer also gets $18,000 to cover the expense of what the company describes as "private carriages." (Talbots declined to explain exactly what kind of "private carriages" Sullivan uses, and the pay experts said they hadn't see the term elsewhere.)
Still, you'd think Sullivan could cover the cost of getting herself around. Sullivan has ranked on Fortune's list of the 25 highest-paid women for years, and the company reported that she got $6.2 million in total compensation last year.
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Comparing President Obama to these corporate welfare abusers is absurd. He is the President of the United States - which requires domestic and international travel - and security and protection. Its not like he is flying Air Force One to Crawford, TX every weekend.
Anyway, one of the CEOs I worked for enjoyed the corporate jet so much that we had to buy 2 more. One was for his wife to take trips to Paris. Then they laid off over 100 people - which 1 month later the COO was given a multi-million dollar bonus. Can't help but think that the Paris trips and bonuses could have easily been sacrificed so that the 100 people could keep their jobs.
mr BR...while you think the cost cutting moves of companies is some moral insult, you are ignoring the reality that if it isn't done, many ot the companies would no longer exist. I work for one and it is true whether you believe it or not. We also still have a huge public sector that has to correct or drag down tax payers.....that will also be a moral issue to you I suspect. I consider hiding one's head in the sand and waiting to crash to be a poor choice also.
Just saying...we are in a lose lose position due to our decades of excess and using the future to pay for today.
Good luck to us.
PS, those CEO things happen, but are not typical of all.
snowfo....I don't think you have a financial clue if you think congressman spend even 1 mill a year on those items. Simple math (sorry but true) would help you. If you assume one jet/ business trip a week, first class flight lodging etc it would not approach a million. Get out and see the world.
What people think amazes me.
Phud...your comment about entertainers and pro sports (my add to the list) I think is a good analogy...we drool over those overgrown children, and they make more money than all the top management of the fortune 500. Heck, Flav of Flav made 5 million a couple years back.
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