Fool Blog: Look Out For the "Others"

Now that the Securities & Exchange Commission has required publicly traded companies to disclose CEO perks in their proxy filings' compensation disclosures, we shareholders are privy to details about our CEOs' significant "others." "Other compensation," that is.

Other compensation includes compensation beyond base salary, bonus, and stock-related compensation, which of course, includes some of the crazy perquisites, or perks, that make some shareholders fighting mad.

The website Network World rolled up its sleeves and checked into tech companies' CEO pay and perks last year, and it offered up a handy slideshow. Apple's (Nasdaq: AAPL  ) CEO Steve Jobs comes across like an angel with his $1 salary -- that's literally all he got. On the other hand, as I noted last year, Google's (Nasdaq: GOOG  ) Eric Schmidt, another guy with a $1 salary, got nearly $500,000 for personal security.

The slideshow pointed out quite a few CEOs who racked up millions in extras. A few that jumped out at me as particularly interesting were Sprint Nextel (NYSE: S  ) , Qwest Communications (NYSE: Q  ) , and Dell Computer (Nasdaq: DELL  ) .

Personal security is a biggie in the breakdowns of "other compensation" (but, of course, be on the lookout for fun stuff like corporate aircraft usage). For example, more than a million in Michael Dell's significant "other" falls under the "security" sub-category, which actually seems like a pretty common (and pricey) perk.

What the heck are these guys so afraid of, that shareholders should foot the bill for "other compensation" like security expenses? I've come up with some possible ideas:

  • Killer mold.
  • A group of terrorists kind of like the ones in that movie that time, you know, with Bruce Willis.
  • Grey goo, rogue black holes, cosmic ray blast from a supernova.
  • Roombas gone haywire.
  • Those other people in the house that might be ghosts.
  • Anybody who's ever been in a Six Flags commercial.
  • Communists, clowns, or Communists dressed as clowns.

Feel free to share your own silly ideas on what the heck might scare these guys the most in the comment boxes below. Or, feel free to share if you just think I'm mean for thinking maybe these guys should pay for their security themselves.

And of course, if you're interested in the topic of CEO compensation, remember the data's always in your companies' proxy filings, available for free from www.sec.gov. When push comes to shove, let's just hope your CEO's worth it -- and maybe knows a little tae kwon do.

Sprint Nextel and Dell are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers pick. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.


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Comments from our Foolish Readers

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  • Report this Comment On July 09, 2008, at 1:59 PM, donzorco wrote:

    Maybe it's just in case they come across dogs, or bees, or dogs with bees in their mouth so when they bark at you bees come out.

  • Report this Comment On July 09, 2008, at 2:06 PM, JoeandChuckP wrote:

    Oral Diarrhea.

    Some CEO's just talk too much.

  • Report this Comment On July 09, 2008, at 10:16 PM, TrackZero wrote:

    $1MM actually seems fairly reasonable, if you've ever talked much with a highly-visible public figure. They wouldn't *be* high-profile targets, if not for the companies they run. Otherwise, they'd just be "people." The public at large can have some relatively unstable elements... That puts the executive -- and the exec's family -- at potential risk.

    So let's break it down...Monitored security at the office and home, probably with vid capture and "live" on site security guards...My piddly little generic security system for my tiny home cost about 5K installed (retail, I did it myself, so much less) plus around 2K/year operating costs. I'm guessing 50K for an exponentially larger installation.

    Then the monitoring, and physical security for the executive, maybe another for the spouse and kids, that's likely around four full time staff members between home, office, and travel...figure 200K fully loaded, each...You're not going to have "low end" personal security, these'll be experienced folks with background clearance, they'll expect benefits, insurance isn't cheap for personal security, and you're going to need to compensate them enough that they're not potential threats themselves...

    That's already 850K. Figure you probably have to do things we'd never consider, like screen your mail, hire extra security for major corporate events (even in secure locations...employees are easily disgruntled, according to Fox News), and pay someone for time, travel, and expenses when going international...I can easily see that hitting 150K in the course of a year.

    If you don't think it's worth it for the shareholders...what would be the most statistically probable outcome to the stock if a well-known, influential company officer was taken for ransom? If the officer wasn't in the public spotlight, the risk wouldn't be as high.

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