Eight Outrageous CEO Perks

The outcry about overpaid CEOs has gone on for years as the financial press combs SEC statements for outlandish pay packages that sometime run into the tens of millions of dollars. Often lost among the large sums paid out as salary, bonuses, and stock options are special compensations for valuable services that very few people can afford — what is most commonly known as perks. Many public companies provide services, at no charge, to their CEOs, ranging from the use of private corporate airplanes to accounting services and security details. The value of these perks can add well into the hundreds of thousands of dollars a year for some chief executives.

Click here to see the eight outrageous CEO perks

24/7 looked through a large number of proxy statements, including those for the 50 companies that paid their CEOs the most last year, to find special benefits for which shareholders paid extraordinary amounts. The chief executive officers who received these perks almost all have one or two things in common. Most are wildly rich, or work for wildly rich people. This includes moguls such as Barry Diller. Many of the executives on this list are also the founders of their companies, such as Ralph Lauren and Martha Stewart. And many, like Las Vegas Sands casino boss Sheldon Adelson, have effective voting control over the public corporation they run.

It would be tempting to say, although it cannot be proven, that the most powerful CEOs and chairmen based on wealth, ownership, and founder’s privileges get the best perks. They are certainly in a position to control their compensation packages better than most public company leaders.

So, from among the most generous CEO perks, 24/7 Wall St. has picked several of the most extravagant ones.

1. Private Use of Corporate Aircraft
>2011 value: $913,966
>Chairman: Barry Diller
>Company: IAC/InterActiveCorp. (NASDAQ: IACI)

Barry Diller has been a senior executive in the entertainment industry for decades. Diller ran Paramount in the 1970s and 20th Century Fox in the 1980s. He is credited with starting the Fox Television Network. Diller is currently one of the wealthiest media Executives in the country. At 70, he is listed on the Forbes 400 with a net worth of $1.8 billion. IACI owns, The Daily Beast, and CitySearch. The IACI proxy states: “Diller is required to travel, both for business and personal purposes, on corporate aircraft. In addition to serving general security interests, this means of travel permits him to travel non-stop and without delay, to remain in contact with the Company while he is traveling, to change his plans quickly in the event Company business requires, and to conduct confidential Company business while flying, be it telephonically, by email or in person.”

Also Read: The Cities Where Everyone Has a Job

2. Security
>2011 value: $2,611,873
>CEO: Sheldon Adelson
>Company: Las Vegas Sands (NYSE: LVS)

Adelson became famous to the general public recently when he invested tens of millions of dollars into the campaigns of several presidential candidates. He helped keep Newt Gingrich financially alive in the Republican primaries, and funneled $95 million to the Republican party both directly and through PACs. Adelson is among the most wealthy people in America with a net worth of $20.5 billion, which puts him at the No. 12 position on the Forbes 400. The source of the 79-year-old’s wealth goes well beyond his compensation. According to the proxy, Adelson and his wife, Miriam Adelson, own roughly 52.4% of outstanding common shares of the company, either directly, or through trusts and other entities. Adelson has run the company since he started it in 1988. The Las Vegas Sands proxy also notes that the company provided security for Adelson and his family, with the full fiscal year 2011 bill coming to $2,611,873. Adelson also has extensive access to company-paid private air travel. Another famous billionaire executive whose company pays an extraordinary amount for security is Jeff Bezos. The founder of Amazon has a net worth of $23.2 billion.  Bezos’ security costs were an extraordinary $1.6 million last year.

3. Signing Bonus
>2011 value: $53 million
>CEO: Ron Johnson
>Company: J.C. Penney (NYSE: JCP)

One of the most visible failed CEO appointments of recent years is that of former Apple retail chief, Ron Johnson, to run troubled retailer J.C. Penney. According to a J.C. Penney proxy, Johnson was granted $53 million in company stock as part of his initial compensation package. But the hopes Johnson would turn things around at the retailer quickly faded. Since he assumed the position on November 1, 2011, J.C. Penney shares have fallen roughly 40%. The company’s fortunes have deteriorated substantially since Johnson joined. In the most recent quarter Penney reported that same-store sales for Q3 2011 fell by 26.1%, while total sales fell by 26.6%. Sales through were just $214 that quarter, down 37.3% from the same period last year.

 4. Use of Car and Driver
>2011 value: $572,596
>CEO: Ralph Lauren
>Company: Ralph Lauren (NYSE: RL)

Ralph Lauren, who founded his empire in 1967, remains CEO of his company to this day. Holding a large amount of stock, the 73-year-old fashion great has become immensely wealthy with a net worth of $6.5 billion. He has control over the company through the ownership of 69.1% of the voting shares. Lauren gets a large sum for his car and driver, along with other lavish benefits. The company’s proxy says: “We believe that these benefits generally allow our executives to work more efficiently, promote our brand and are legitimate business expenses. The costs of these benefits constitute only a small percentage of each NEO’s total compensation.”

5. Personal Accounting
>2011 value: $250,000
>CEO: Aubrey McClendon
>Company: Chesapeake Energy (NYSE: CHK)

Chesapeake Energy company CEO Aubrey McClendon has been in the press as much as any other CEO this year. He took out $1.1 billion in personal loans on wells that Chesapeake gave him. And then, Reuters reported, “McClendon also ran a $200 million hedge fund that was registered at Chesapeake’s Oklahoma City office from 2004 to 2008 and traded in the same commodities Chesapeake produces.” The trouble with the McClendon scandal and the departure of several board members at Chesapeake has pulled shares down more than 20% this year. McClendon has been on the board of Chesapeake for 23 years as of the last proxy, and is listed as a co-founder. Over the last three years, according to the same proxy, he had total compensation of over $57 million as the head of Chesapeake. According to company filings, the CEO’s 2011 benefits included “$250,000 for the costs related to personal accounting support provided to Mr. McClendon by our employees.”

Also Read: The 12 Companies Paying Americans the Least

6. Life Insurance
>2011 value: $131,280
>CEO: Leslie Moonves
>Company: CBS (NYSE: CBS)

Les Moonves is the chief executive of CBS, which is controlled by its largest shareholder and chairman Sumner Redstone. Redstone is among the richest people in America, with a net worth of $4.1 billion, according to Forbes. Redstone’s support of the CEO of the television network company has made Moonves wealthy as well. The former president of Warner Bros. Television has made over $170 million as CBS’s CEO in the last three years. CBS SEC filings show that part of Moonves pay package includes $131,280 in life insurance premiums paid by the company in 2011.

7. Vacation/Vacation Home
>2011 value: $453,382
>Chairman: William P. Foley II
>Company: Fidelity National Finance (NYSE: FNF)

William P. Foley II, the chief executive of Fidelity received one of the oddest benefits of any large public company executive. Fidelity paid him for the use of properties he owns. His list of perks is much longer than that. The firm’s proxy states that in 2011, the company paid $443,382 “to Rock Creek Cattle Company, Ltd. Which is owned by Foley. Those payments, according to the company were for “fees related to company meetings at the facility and membership dues for certain company officers, including $18,000 in dues for our named executive officers.” Other payouts by Fidelity to Foley-owned or controlled companies include “$13,249 to Hotel Les Mars, LLC, $25,974 to Foley Family Wines, $1,172 to Kuleto Estate, $57,946 to EOS Acquisition II, LLC, $1,985 to Glacier Jet Center, $1,171 to Mackenzie River Pizza Whitefish, $12,483 to Foley Estates Vineyards and Winery and $1,335 to Glacier Restaurant Group, LLC.”

8. Personnel Costs
>2011 value: $83,327
>Chairman: Martha Stewart
>Company: Martha Stewart Living Omnimedia (NYSE: MSO)

Martha Stewart Living Omnimedia founder and chairman, Martha Stewart, is treated extremely well as head of a company that consistently loses money and had revenue of only $44 million in the last quarter. The tiny company has given her compensation of over $21 million during the last three years. Stewart has a great deal of control over her financial fate. She owns 100% Class B shares in the company, which gives her a majority vote on all matters regarding the corporation. Among her many, many benefits, according to the proxy is “$83,327 for the portion of personnel costs for individuals performing work for Ms. Stewart for which we were not reimbursed.”

– Douglas A. McIntyre

Also Read: America’s Most Valuable CEOs

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