New Rules Reveal Executive Perks

Reports in '07 Show Notable Benefits, Large and Small

Executive perquisites can carry plenty of punch, helping to recruit management stars even as they outrage investors who oppose treating top brass like royalty.

Popular perks have long ranged from high-end rewards such as personal use of the corporate jet to less luxurious items such as free car washes and haircuts at the company barbershop.

But recent U.S. disclosure rules are bringing more perks to light. Company proxy statements must now list perquisites valued at a total of $10,000 and quantify any perk worth $25,000 or more. Prior rules limited disclosure to perks valued above $50,000.

Sometimes, businesses disclose more information than the rules require. About 405 companies have revealed at least one perk worth less than $10,000 in proxies filed so far this year, up from 314 a year earlier, according to Corporate Library, a governance-research firm in Portland, Maine.

Other companies are curbing the perks they provide to top executives. Thirty-five of 200 major corporations have discontinued or reduced at least one perk since the new disclosure rules took effect last year, concludes a proxy analysis by Hay Group. Common targets include club memberships, financial planning and company cars.

Nevertheless, unusual benefits still show up in many executive suites. Here are six executives who received substantial or puny perks in fiscal 2007:

Substantial Perks

Kathleen Danenberg, president and chief executive of Response Genetics Inc., was reimbursed $86,622 for clothing expenses.

Retailers often give clothing allowances to their top executives. But Response Genetics, which the scientist has run since 2002, develops molecular diagnostic tests. The company says that the expenses were approved while it was still private and that Ms. Danenberg has repaid them.

Micky Arison, chairman and CEO of Carnival Corp., was given sporting-event tickets valued at $115,884 for his personal use.

The tickets were for six courtside lounge seats to watch the Miami Heat basketball team, which Mr. Arison owns. He "has first call on the tickets," a Carnival spokesman says. "Other executives use them as well."

Bahram Akradi, founder, chairman and CEO of Life Time Fitness Inc., received a $31,777 perk: corporate coverage of his home cellphone plan, wireless card and Internet connectivity.

The perk largely covered the costs of a high-speed data circuit, says a Life Time spokesman. He adds that Mr. Akradi taps company computers from home daily, including several "data-intensive" systems. The CEO also conducts work videoconferences from his home.

Puny Perks

Martha Stewart, founder, former chairman and CEO of Martha Stewart Living Omnimedia Inc., got "personal fitness provided in her capacity as on-air talent," at a cost to the company of $5,000, its latest proxy statement says.

Ms. Stewart produces and stars in her company's daily TV program, but on some days she has to tape two shows. The $5,000 pays for her yoga instructor. "The company felt it would be beneficial if she practiced yoga at the TV studio during her lunch break between shows," a spokeswoman says.

Michael G. Morris, chairman, president and CEO of American Electric Power Co., received personal services from an employee that the company valued at $26.

The staffer collected the chief executive's mail when Mr. Morris was out of town on business, a spokesman says. In 2006, when he was getting ready to inhabit his newly built home, Mr. Morris received $1,033 worth of similar help. Employees went to his house to admit service providers, such as the cable-TV installer, the spokesman says.

Marshall Larsen, chairman and CEO of Goodrich Corp., got an 800 telephone number worth $97.

The company provides "long-distance telephone service for executives and family," its latest proxy statement says. A spokeswoman declined to comment.

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