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What Do You Think About Executive Perks?

One of the hot-button issues today is the difference between what the “top 1%” get, and what the rest of us end up with. There are few places where the differences are as stark as when it comes to executive pay and perks, and the salary and benefits of “regular” workers.

CEO pay has been on the rise [3] over the past few decades, growing at a faster pace than worker pay. Indeed, CEO pay is 380 times the average pay of workers [4], while in 1980 CEOs earned 40 times the average worker’s pay. That rise is one of the reasons that are so unhappy with the current state of things. On top of the pay, many executives also receive huge perks.

Kiplinger [5] put together a list of 8 executive perks. These include:

  1. Birthday Party: Tyco picked up half the tab for a $2 million birthday party thrown for an executive’s wife.
  2. Non-Compete — After Death: One executive is promised $15 million plus interest if he leaves and doesn’t complete, even if he is dead. The non-compete bonus is in effect for two years after his death, so his heirs get the perk if he remains silent in his grave.
  3. Housekeeping for retired executive: Tyson Foods reportedly provided housekeeping services for its retired CEO, with the employees themselves doing the dirty work. The company even paid some of his personal credit card bills after his retirement.
  4. Company Jet: The company jet is a regular perk, but one Qwest executive was able to get an agreement that his family could use the jet, even if he wasn’t present on the plane — something that isn’t very common. Qwest even bought the executive’s home. Steve Jobs not only had his own private plan outright, but he also received reimbursements for using the plane for company business.
  5. Tax Subsidy: Occidental Petroleum reportedly paid state taxes in California for one of its top executives. However, many people don’t realize that when someone else pays your taxes, it’s considered income tax. So the company had to pay taxes on the taxes it paid.
  6. Private Security: Oracle paid Larry Ellison’s home security costs, paying to monitor his residence, as well as paying for security personnel.
  7. Sports Seats: Apparently, GE boss Jack Welch received a number of sports-related perks, including floor tickets to Knicks games, sky box for Red Sox games, and VIP seating at the French Open. Not bad for the sports lover.

These kinds of perks, in the minds of many in the middle class [6], only add insult to injury. After all, many of these executives make millions of dollars each year (although Steve Jobs had a salary of $1 a year). They have stock options, and access to other types of compensation. Over the top perks only seem to throw into sharper relief the differences. Ordinary workers might receive vacation days and health insurance, but those employment perks [7] pale in comparison with what top executives are getting.

What do you think? Do executives deserve fabulous perks? Are they really making the kinds of decisions that entitle them to such treatment? Or are these perks over the top?

(Photo: Justortitri [8])