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It is no secret many corporate heads receive astronomical compensation sums that tower above those of their employees.
According to 24/7 Wall St, in 1965, the average American CEO pay was 18.3 times the average worker pay. By 2012, CEOs were making around 200 times their workers’ pay.
But that’s been found to be just the tip of the iceberg when it comes to rewarding bosses.
24/7 Wall St. recently reported a list of outrageous perks companies award their already excessively compensated CEOs.
These included the use of the company jet for personal use, or an issuance of a personal security detail.
Here are 8 perks which were deemed the most “outrageous”:
1. Personal security
Larry Ellison, Oracle’s celebrated founder and CEO, owns a great deal of real estate, including nearly all of Lanai, the sixth-largest island of Hawaii. The company also pays for Ellison’s home security personnel, a cost amounting to US$1.53 million (S$1.88 million) in 2012. Ellison and his family members are also granted access to fly on a private jet which Oracle leases from another company.
2. Private air travel
Known for his contributions in launching both CNBC and MSNBC, David Zaslav came to Discovery Communications in 2007 from NBC Universal. Since his arrival at Discovery, Zaslav has received massive compensation packages, which total more than US$42 million (S$ 52.7 million) in 2010, over US$52 million (S$ 65.3 million) in 2011, and nearly US$50 million (S$ 62.7 million) in 2012.
Last year, in addition to a US$3 million (S$ 3.77 million) salary and more than $US41 million (S$ 51.5 million) in stock and option awards, Zaslav received more than US$400,000 (S$ 502, 000) in other compensation, which was mostly related to travel expenses.
3. Life insurance and disability insurance premiums
As of 2012, Level 3 Communications CEO Jim Crowe was one of the highest-paid chief executives in the US, earning more than US$40 million (S$50. 2 million).
The company also gives Crowe reimbursements of up to US$100,000 (S$125,502) in life insurance premiums and long-term disability insurance. In addition, Crowe was also allowed to use the company’s aircraft for personal use.
4. Lease of a villa
Steve Wynn is the founder, chairman and CEO of Wynn Resorts, one of the largest casino operators in the U.S. In April 2012, the company leased Wynn a company-owned villa in Las Vegas. The company estimated the fair value of the lease at US$451,574 (S$566,734) for 2012.
Wynn had a base salary of US$4 million (S$5.02 million) in 2012 and total compensation, including bonuses and other compensation totalling US$17.7 million (S$22.2 million).
John Watson has been Chevron’s chairman and CEO since 2010 and it was reported that his compensation was US$32.2 million (S$40.4 million) in 2012.
This raised the concern of shareholders, who noted that called Watson’s executive pay raise was a “whopping 52% increase that included a US$6 million (S$7.5 million) pension increase,” particularly after Chevron was fined $19 billion (S$23.8) in an Ecuadorian court for environmental damage in 2003.
6. Financial planning
Andrew Liveris is the president and chairman of Dow Chemical, and he received close to US$23 million (S$28.9 million) in total compensation last year – an amount including more than US$98,000 (S$122,994) in financial and tax planning.
However, between the end of 2004, Liveris’ first year as CEO, and the end of 2012, earnings per share, dividend payments, and return on equity all declined.
7. Tax assistance
Lockheed Martin’s former CEO, Robert Stevens, received more than US$27.5 million (S$34.5 million) in total compensation in 2012.
Part of this compensation included more than US$220,000 (S$276,000) in tax assistance related to expenses Stevens incurred on company business. At the end of last year, Stevens stepped down as CEO, although he remains the company’s executive chairman.
8. Legal fees in performance reviews
Gap CEO and chairman Glenn Murphy earned US$24.6 million (S$30.87) in fiscal 2012. Marked by store closings and long-term merchandising problems, the clothing retailer had been struggling for years. He made big moves when he was hired in 2007, including closing stores and refocusing on successful brands.
In 2012, the company agreed to increase Murphy’s stock-based performance compensation. The company then reimbursed Murphy US$65,000(S$ 81,580) for attorney fees he incurred while his compensation was being negotiated.
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