Homeland Security, Corporate America Style

In the absence of threats, kidnappings or terrorist attacks on U.S. shores, why would big corporations spend so much on personal security for their top executives?

More than half of the 93 publicly traded Fortune 100 companies said they provide home and personal security benefits for their executives, according newly released research.

And twice as many companies are providing such benefits—53.8 percent in 2006 compared with 23.2 percent in 2003, according to Equilar, an executive compensation consulting firm in Redwood Shores, California.

Yet, the median value of the security benefits, it found, fell 31.1 percent, from $37,194 to $25,609.

How to reconcile what seem to be competing trends? It has to do with government disclosure requirements that have lowered the threshold of exactly what needs to be reported.

The Securities and Exchange Commission disclosure rules, starting at the end of 2006, require publicly traded companies to give more details of exactly what security perks they are providing, said Equilar spokesman Alexander Cwirko-Godycki.

And the rules lowered company reporting requirements from $50,000 for executive security benefits to $10,000—meaning more companies are giving details of benefits that, spread across a greater number of executives, lowered the median spending by nearly a third, from $37,194 in 2005 to $25,609 in 2006.

So what security perks do executives enjoy? Cwirko-Godycki said that, except for really large corporations, it usually involves paying for a home alarm. CVS Caremark Corp., for example, said it provides an allowance to executive officers to "cover the costs of the installation and maintenance of security monitoring systems in their homes."

But some company filing details are intriguing, including an August 2007 filing by FedEx Corp. which lists $23,857 spent for home security system installation, maintenance and monitoring for C.E.O. Frederick W. Smith, according to excerpts from Equilar's report.

Also, FedEx said that "to the extent the security services are provided by FedEx employees," the company spent $403,405 on Mr. Smith in 2006. That was calculated by multiplying the "the number of hours of service provided to the officer by each such employee" times the employee's "the total hourly compensation cost," according to the filing.

No immediate comment about from FedEx about why Smith needed such security.

One major perk that that companies do not reveal is probably the costliest—how much it costs to allow executives to use the company jet for personal travel. And some corporate moguls get a really sweet deal, to judge by a February 2007 General Electric Co. filing.

In it, according to Equilar's excerpt, top executives Jeffrey Immelt and Robert Wright are designated by G.E. as "security personnel" and therefore, "for security purposes, we require them to use company aircraft for all air travel, whether personal or business, as in the company's business interest."

Oh, and the same executives also get "home security and back-up power systems and car service under certain circumstances."

by Elizabeth Olson