Best-compensated CEO: Chesapeake's McClendon

Aubrey McClendon of Chesapeake Energy chkwas the best-compensated CEO of 2008 at $112 million.

Yet, in December, the Chesapeake board of directors approved an extra $12.2 million for the purchase of McClendon's collection of historical maps, books, paintings and photos, according to Chesapeake's proxy. The maps and artwork had adorned Chesapeake's headquarters, and the proxy notes that the company got a good deal.

In these times of economic difficulty, CEO bonuses may have gone down, but companies continue to be creative when handing out perks. While the median value of bonuses and other incentive cash dropped 27% in 2008, an examination of CEO compensation by USA TODAY and the Associated Press found that the median value of perks increased 7% to $170,501.

There are many examples of the usual CEO benefits, sometimes worth millions, such as chauffeurs, security and the personal use of corporate aircraft. Companies often don't stop at paying CEOs big bonuses, but step in with more money to pay the taxes on those bonuses, known as tax gross-ups.

One perk involves a non-compete clause for a dead man, says Vineeta Anand, chief research analyst of the AFL-CIO Office of Investment, which produces the website Executive PayWatch.

Should James Bernhard, CEO of the Shaw Group die, the engineering and construction company would pay his family $18 million for him not to compete with the company for two years, Anand says. "It's not only funny, it's outrageous," she says. "That is the most outrageous perk of all. Everything pales by comparison."

Shaw spokesman Gentry Brann says it is really an award that Bernhard is to be paid upon his departure from the company. If he dies, his family would get it. "To conclude that we require him not to compete for two years after his death to receive payment is a gross mischaracterization of his agreement," Brann says.

A sampling of other CEO perks:

• Johnson & Johnson jnjCEO William Weldon had the biggest perks package in 2008 at $3.9 million, the AP says. Most of that was a $3.6 million payment to a retirement plan, but Weldon also got $154,000 in personal flights on the company jet and $26,000 for a car and driver.

• Three CEOs got their entire compensation in perks: James Rogers of Duke Energy duk, at $524,589; Eric Schmidt of Googlegoog, at $508,763; and Richard Fairbank of Capital One Financial cof, at $68,344. Schmidt (who did receive $1 in salary) got about $403,000 worth of personal security and more than $100,000 in personal use of the company jet, the AP says. Fairbank received a car allowance, insurance, health care and home security.

• Occidental Petroleum oxypaid CEO Ray Irani more than $400,000 for tax preparation and financial planning services.

• Robert Ulrich retired as CEO of Target tgtlast year. But he is founder and chairman of the Musical Instrument Museum that will open in 2010 in Phoenix. Target chipped in with the free services of its employees and office space to help in the design of the museum. The company estimates the office space donation at $120,000, but includes no estimate on the value of the time Target employees have spent on the project.

• FTI Consulting fcn advises companies on bankruptcy and restructuring issues. In a footnote, the company says that it has paid a $1.1 million deposit in December for a country club membership for executives including CEO Jack Dunn.

Paul Hodgson, senior research associate for the Corporate Library governance research firm, says a few companies have boosted CEOs' salaries so they can pay for perks themselves. Provident New York Bancorp, for example, gave CEO George Strayton a 3.2% raise expressly to cover the discontinuance of his company vehicle and country club membership.

Hodgson says the Corporate Library is researching tax-gross ups now. The data is not ready to be released, he says, but "despite all the bad press," companies continue to pay CEOs extra money to cover their taxes.

null
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...