Executive perks for CEOs often involve lavish expenditures, despite shareholder scrutiny. For instance, the former senior chairman of Tyson Foods Inc., Don Tyson, received a staggering $1.1 million to cover his personal income-tax liability associated with benefits. These benefits included $464,132 for personal use of company-owned homes, $20,000 for oriental rugs, $18,000 in antiques, $84,000 for lawn maintenance at five homes, and an $8,000 horse, along with jewelry, artwork, vacations, and theater tickets. Such perks, though seemingly extravagant, highlight the extensive "extras" executives often receive beyond their base salaries.
While some companies are reducing flashy perks due to shareholder pressure, the overall value of executive extras isn't necessarily declining. Companies are often shifting from highly visible luxuries like private jet use and country club memberships to more discreet benefits such as financial planning assistance or life insurance. For example, casino mogul Steve Wynn began personally paying over $450,000 annually for his Las Vegas luxury villa after his company, Wynn Resorts Ltd., had covered it for years. Similarly, Facebook CEO Mark Zuckerberg's personal use of company aircraft decreased from $1.2 million in 2012 to $650,164 last year, though the company noted these costs were tied to his security program.
Despite the trend of reining in some high-profile perks, the median value of perks for CEOs at large public companies was nearly $162,000 last year, an increase of over 9 percent. These perks often include country club memberships, personal use of corporate planes, and enhanced healthcare plans. Advanced Micro Devices even bought CEO Rory Read's house for $790,000 and gave him an additional $180,000 to cover his underwater mortgage, demonstrating the lengths some companies go to provide executive support. Former IBM CEO Samuel Palmisano, as a retirement gift, was guaranteed an administrative assistant, a furnished office for life, and a $1 million office renovation.
Corporate governance experts express concern that these substantial perks for executives, who already earn millions, can worsen public perception, making it seem as though executives are prioritizing personal enrichment over the company's well-being. While perks are a small fraction of overall CEO compensation—the median pay for S&P 500 CEOs last year was $9.7 million—they underscore the significant disparity between executive lifestyles and those of shareholders, customers, and employees. This ongoing debate reflects the tension between attracting top talent with generous benefits and maintaining accountability to shareholders.
