A funny thing happened after the Securities and Exchange Commission tightened up the disclosure requirements on executive perks in 2006: Companies began to scale back dramatically on the personal jet flights, sports tickets and other benefits they used to slip top executives unnoticed.
Las Vegas Sands Chairman Sheldon Adelson must not have gotten the memo. Last year Adelson, worth $9.3 billion by our reckoning, reported $2.7 million in perks, nearly equal to his $2.8 million in pay and bonus. The bennies included $2.45 million for security for himself and family members, $168,812 for a car and driver, and $67,000 in reimbursement for the taxes due on $118,000 in personal aircraft usage. And by "personal", we do mean personal: Adelson charged the company $6.1 million for the use of two 747 jumbo jets he owns through a Bermuda corporation.
Adelson may deserve a pass, since he invested $1 billion in his company to get through a rough period in 2008. And outrageous perks are going out of style at other companies as executives forgo unseemly - now that they have to be disclosed, anyway - benefits in favor of straight cash and stock.
But that doesn't mean the expensive perks are all gone. Forbes joined with Footnoted.org, a Morningstar unit that scours proxy statements (the detailed annual reports on how much top executives were paid) and other SEC documents, to see what kind of goodies were buried in the most recent wave of filings. Despite tightened regulations, rising shareholder activism and an antibusiness climate brought on by the worst economic downturn in a generation, we found plenty of excesses.
Take the $183,415 MicroStrategy Chief Executive Michael J. Saylor spent last year to be driven around in company cars and "alternative car services." The logic-defying expenditure could have purchased four 2010 BMW 335 i 2D Coupes, Footnoted.org observed, for what the New York digital game publisher spent on ground transportation. He declined comment.
Another head-scratcher: the enormous sums some companies pay executives for "personal financial planning." Ray Irani, the long-serving chairman of Occidental Petroleum, got $391,000 in "tax and financial planning" last year, which would represent eight months of work by a $300-an-hour financial planner. That's some tax return. Occidental shareholders will be picking up this tab for some time. Irani gets to spend that much for the rest of his life under a contract that also guarantees him at least $5.7 million a year. An Occidental spokesman says the planning keeps Irani "singularly focused on Occidental's operations and performance," which in 2009 exceeded competitors ExxonMobil, Chevron and ConocoPhillips.
Omnicare Chairman Joel F. Gemunder also seems to have complicated finances. Omnicare covered $134,250 in tax and financial planning plus another $27,750 for "executive bookkeeping," which some shareholders might think is what they hire executives to do. The company did not respond to a request for comment.
Image: Sheldon Adelson
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