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The Association of U S West Retirees
 

 

 

Disclosure sensitizes directors to providing perks
Companies' top officers often get lavish perks, but disclosure has sensitized directors lately. 
By Aldo Svaldi
Denver Post
Friday, June 19, 2009

Liberty Media provides chief executive Greg Maffei and chairman John Malone access to an apartment, a company car with driver and catering services when they visit New York City.

Money manager Janus Capital Group paid $181,670 in personal-protection services for CEO Gary Black and his family last year.

And restaurant chain Red Robin Gourmet Burgers continues to pick up the tab to fly CEO Dennis Mullen between Colorado and his family home in Arizona, at a cost of nearly $250,000, including taxes, in 2008.

Those are some of the more unusual perks Colorado companies provided to their executives last year, as disclosed in proxy statements.

When public companies report on executive pay, they must include the perquisites, or perks, provided to top managers under a category called "other compensation."

Public disclosure has made directors more sensitive about the perks they provide management and the justification behind them.

"Companies should provide those perquisites that are important for the organization and make sense," said Myrna Hellerman, a senior vice president with Sibson Consulting in Chicago.

Many also need to do a better job of explaining in detail any unusual items, she advised.

Covering a physical exam, something Ball Corp. does, appears justifiable, as do financial-planning services that Berry Petroleum, Western Union, Liberty Media and others do, she said.

In the case of the bodyguards, a perk usually reserved for danger zones such as Colombia, the Janus board of directors covered the cost but without explaining why in the proxy.

"It was a specific and unusual threat that affected a handful of CEOs and their families at asset-management firms," said Shelley Peterson, Janus spokeswoman.

Black hasn't requested those services in the past and doesn't plan to use them in the future.

Liberty Media explains in its proxy that it owns a New York apartment for business but that executives use it from "time to time" for personal purposes.

Some perks represent holdovers from the past that are becoming harder to justify, especially in tough economic times.

Companies used to cover country-club or golf memberships because they helped executives mix socially and conduct business.  In the Internet age, that is becoming less important.

Homebuilder MDC Holdings gave CEO Larry Mizel $7,800 toward club dues, while chief operating officer David Mandarich received $6,250.  Those perks have been eliminated.

Car allowances are another fading perk, but not at every company.  Most Red Robin executives received a car allowance of $10,200 each.  Two executives at Liberty Global get $26,599 each in auto allowances.

Another questionable perk is the personal use of corporate aircraft.  Notable frequent fliers include Qwest CEO Ed Mueller, who claimed $493,781 of personal air time, and Liberty Global CEO Michael Fries, who used $122,055.

Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com

http://www.denverpost.com/search/ci_12625316