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Shining a Light on Perquisites
The Securities and Exchange Commission may have its proof that sunlight is the most effective disinfectant on the corner office, at least when it comes to the indirect benefits the office's resident gets.
According to a rule that went into effect at the end of 2006, public companies are required to disclose more information relating to the compensation and benefits packages of their executives. And as it turns out, plenty of them have since then decided to scale back on executives' fringe benefits, or so-called "perquisites," according to a new report by the compensation consultant Equilar.
The report looks at the levels of benefits like financial planning services, corporate jet usage, personal security, and tax reimbursements that the 100 biggest public companies offer to their top execs. Because the S.E.C. lowered the minimum value required to report from $50,000 to $10,000, much of the granular data is difficult to compare to prior years. Not surprisingly, more companies disclosed perks, and the median value of them declined from 2005 to 2006.
But Equilar also looked at whether or not companies have eliminated or plan to eliminate perquisites. And 16.1 percent of the 100 companies indicated they have cut back on the goodies, or will do so this year. One company (UnitedHealth Group) indicated it will no longer offer any fringe benefits to its executive officers.
By contrast, only two companies disclosed in 2005 that they would cut back on perquisites.
It's amazing what a powerful and fresh fluorescent bulb will do to expose your flaws, isn't it?
by Megan Barnett
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