For Most CEOs, Perk Is Still Preference

Lee A. Iacocca may be pulling down $18 million a year in salary and bonuses, but his counterparts in the rest of corporate America want you to know how the other half lives.

The median salary for chief executives at the nation’s small and medium-sized firms -- those with sales of less than $100 million--is $139,000 a year, according to the National Institute of Business Management, which surveyed 562 companies on the subject.

If that seems like a weekly allowance compared to Iacocca’s take, it should. But this cadre of executives doesn’t seem to mind. They prefer the executive perk, things like wining and dining on the corporate expense account, driving a company car and socializing on company-paid country club memberships.

In fact, many executives at smaller companies, particularly private firms, are willing to forgo compensation in favor of plowing profits back into the business, which they may just happen to own themselves.

“Perks are more valuable to them than to larger company executives because their . . . personal compensation is not that exorbitant,” said Harry H. Linowes, managing partner of BDO Seidman, an accounting and consulting firm that co-sponsored the survey along with the Research Institute of America. “They of necessity cannot afford to lay out of their own pockets for some of these most important things in life--an automobile, a phone in the car or being able to belong to a country club.”

The corporate perks, which averaged $7,000 per executive, are a sign of the times. Four years ago, the use of car phones didn’t even register on the survey’s hit parade. Today, car phones are No. 9 on the chart, with 31% of the institute’s members offering them to one or more executives.

As recently as four years ago, offering tax preparation assistance to executives was not a big seller.

Now, thanks partially to the complications of dealing with the Tax Reform Act of 1986, some 32% of companies offer tax help, compared to 25% in 1987.

The use of entertainment expense accounts has also gained in popularity--67% of the companies offered some form of them in 1988, compared to 54% in 1987. This includes everything from credit cards for personal use, to country club, athletic and dining memberships, to first class business travel.

The perk to watch, according to the institute, is personal computers. Currently, 13% of executives have the luxury of working at home on a personal computer, either paid for or provided by the company.

Other perks on the cutting edge include liability insurance for executives and telephone credit cards.

Off the top 10 perk list are supplemental medical insurance, company paid parking, supplemental retirement plans, low or interest-free loans and financial counseling.

The old stalwart, the company car, is still found in the garages of seven of 10 executives.