Rules uncover executive perks
Companies may have been playing hide-and-seek with a lot of little perks -- things like joyrides on the company plane, chauffeurs and country club memberships -- that they gave their top dogs, according to a study released Thursday by the Corporate Library.
But because of new disclosure rules demanded by the Securities and Exchange Commission, the game’s over.
The disclosed cost of executive benefits soared 130% from 2005 to 2006, the pro-investor research organization said. The group looked at 100 big companies that had filed disclosures under new SEC rules.
The Maine-based research group said a close examination of the data showed that perks didn’t increase at most companies. They simply weren’t well disclosed in the past.
“It isn’t so much that shareholders didn’t know how much these perks were costing them -- they didn’t even know they were being provided,” said Paul Hodgson, senior research associate at the Corporate Library.
At Merck & Co., for instance, the only perk listed for Chief Executive Richard T. Clark in last year’s proxy statement was the $9,450 matching contribution to his 401(k) plan. This year, the Whitehouse Station, N.J., pharmaceutical firm listed $210,536 in “other” benefits for Clark, including $30,878 for aircraft, $16,055 for commuting, $373 in security alarm monitoring and $153,330 in dividend equivalents.
Merck spokespeople weren’t immediately available for comment. Hodgson noted that most of these benefits were worth less than $50,000 each, the threshold under which old guidelines didn’t require disclosure.
