Many companies have visionary chief executive officers whom shareholders appreciate very much. I hate to think what kind of mass freak-out might ensue if anything ever happened to Apple's (Nasdaq: AAPL) Steve Jobs, for instance. However, corporations that shell out piles of cash to keep their CEOs secure might ultimately endanger their shareholders' investments.
A sign of the times?
We're in the thick of proxy season, and more people have their eyes on executive compensation this year. With costly CEO perks getting a lot of attention in 2009, some companies are realizing that the executives to whom they already pay top dollar might be able to afford their own darn security.
Eastman Kodak (NYSE: EK) and Deere (NYSE: DE) both announced that they would no longer pay for home-security systems for their CEOs. Their moves could be part of a growing trend.
For example, some companies paid less for security costs for their CEOS last year. Google (Nasdaq: GOOG) paid 42% less to keep Eric Schmidt safe this year. After shelling out $1.1 million for Schmidt's security since 2007, the company's tab fell to $233,542 this time around.
Although CEO pay and perks have shown some signs of receding, a few companies paid more for their chief executives' security last year. The price tag to protect Starbucks' (Nasdaq: SBUX) Howard Schultz increased 25% to $640,000 in 2009.
Amazon.com's (Nasdaq: AMZN) Jeff Bezos didn't receive an increase to his base salary last year, but his overall compensation rocketed up by 39%, as the company spent a whopping $1.7 million on various types of security for him.
You're too insecure
In contrast to country club memberships, private jets, and golden toilets, spending shareholder money to protect visionary, high-profile CEOs is admittedly far more defensible. A boss who loses sleep worrying about his or her safety might come up with fewer great ideas, or make fewer sharp decisions. And a society that makes CEOs into superstars also exposes them to the sort of attention that could make them targets.
Still, some companies don't list any security expenses for their high-profile heads at all, including businesses run by such shy, obscure types as Apple's Jobs and Microsoft's (Nasdaq: MSFT) Steve Ballmer.
Too many perks for jet-set jerks?
I see why these individuals need security; I'm just not sure that shareholders ought to pay for it. Most high-profile CEOs make very high base salaries and bonuses. With the wealth they amass over their careers, I'm pretty sure that most of them can afford their own security expenses, if they want such measures. After all, with the exception of health insurance, most of the rest of us don't ask our employers to foot the bill for our personal business.
Besides, lavish security bills are just another part of the larger problem of perk abuse among CEOs. Abercrombie & Fitch (NYSE: ANF) is paying CEO Mike Jeffries $4 million to limit his personal use of the corporate jet, to name just one egregious recent example.
CEOs who gain superstar status may also start to believe they're above everyone else. As much as I respect intelligent, accomplished folks who achieve great things in the business world, I still have to acknowledge the destructive potential of ego and hubris. At some point, CEOs ought to come down and join the rest of us here on Earth. If they feel the need for a heavily fortified compound, they're free to pay for it themselves -- but it might get awfully lonely in there.
Do companies that foot the bill for CEO security help you sleep better at night? Or should these well-paid folks shell out for their own safety. Sound off in the comment box below.
Check back at Fool.com every Wednesday and Friday for Alyce Lomax's columns on corporate governance.
