Vacation trips on the corporate jet, luxury car allowances, even the purchase of homes that can’t sell — perks are alive and well at Colorado’s public companies.
“Perquisites are the worst because they are not performance-based; they are position-based,” said Bruce Ellig, author of “The Complete Guide to Executive Compensation.”
Executives receive perks because of who they are, not how well they do, making them a bane of investor activists and labor interests.
A growing number of corporate boards are eliminating special benefits for their executives, or at least cutting back the more egregious examples.
“You are seeing them increasingly disappear, and you are seeing companies being more careful about what they do offer,” said Jim Sillery, a principal with Buck Consultants out of Chicago.
Despite that, a review of proxies from more than 100 Colorado public companies found about four in 10 still offered substantial perks to their executives last year.
Public companies report the personal benefits they offer their executives under a category called other compensation in proxy statements filed with the U.S. Securities and Exchange Commission each year.
At most companies, other compensation consists primarily of items like matching contributions to retirement plans, or premiums for life, disability or health insurance plans.
Although perks are sometimes offered more broadly, say financial planning services, they are often exclusive to the corporate suite, and sometimes to the chief executive.
The most common perks offered by Colorado companies last year were car allowances, personal travel on corporate jets and relocation expenses.
A few companies provided more exotic items like a vacation trip, a home security system, and legal or secretarial services for personal use.
More than a third of Colorado executives in the survey receiving perks had an automobile allowance, making it the most common personal benefit last year.
The average auto allowance among the group was $13,190 last year, with TeleTech Holdings chief executive Ken Tuchman receiving the most to keep him mobile — $33,952.
High-altitude benefit
Corporations are increasingly asking executives for reimbursement when they use corporate aircraft, but several companies continue to offer that benefit.
Liberty Media CEO Gregory Maffei wins the frequent-flier award among Colorado executives, racking up $445,082 in personal travel. Edward Mueller, CEO at Qwest Communications, booked $297,008 in personal flight time.
Companies often pay to relocate skilled workers, and executives are no exception. But the cost of moving executives can reach rarified levels, especially if an existing home is purchased.
The 20 Colorado executives claiming relocation expenses received on average $123,290 — about the median price of a condo in the metro area in May.
Western Union paid $568,000 in relocation expenses for executive Ranjana Clark last year, including the loss it suffered on the sale of her North Carolina home.
It wasn’t a long-term investment. Clark lost her job in a downsizing about 15 months after she took the job in Colorado.
Qwest paid $57,027 in relocation expenses for chief financial officer Joseph Euteneur last year and took a big hit after buying his house for $2.75 million and later selling it for $2.35 million. And if that weren’t enough, maintaining the home cost $36,589.
Euteneur, through no fault of his own, was out of a job after CenturyLink acquired Qwest.
A handful of companies might wish their executives would pick up and move, especially Einstein Noah Restaurant Group, which covered hefty commuting expenses.
Einstein paid about $70,000 flying and housing chief concept officer James P. O’Reilly from Kentucky. The company spent about $40,000 flying and housing chief operating officer Daniel Dominguez from California, something it has done for several years. Dominguez retired this summer.
Wearing the merchandise
Some perks are specific to the company, a way to get executives to wear the merchandise. Vail Resorts covered $15,550 in ski school and lodging expenses for CEO Rob Katz and his family.
Restaurant chain Red Robin Gourmet Burgers provided meal discounts of 60 percent off, worth $11,706, for its top six executives. Adding new meaning to “meals on wheels,” those food discounts were on top of $55,281 in car allowances Red Robin executives received.
The burgers didn’t come with a gym membership to burn off those calories. But oil company Venoco did cover $7,405 worth of gym memberships for three of its executives.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
