CEOs have tough jobs. Whoever occupies the corner office has a world of worry on their hands these days: inflation, oil, credit markets, consumer confidence, global wars, and a real estate market slowly eating away at the American dream.
No, wait, scratch that last one. There's a new and ingenious executive perk making its way into corporate America -- subsidizing real estate losses.
Can I buy that on eBay?
Back in 2006, eBay
Now, you'd think a $700,000 bonus for not wanting to accept the reality of the housing market would be enough. But eBay didn't stop there, adding, "eBay will provide Mr. Swan with a tax reimbursement for income attributed to him arising from the receipt of the Payment Amount." Was Leona Helmsley on to something when she said, "Only the little people pay taxes?"
Who's paying these bills?
Or take Qwest
Without mentioning why the company offered to purchase the home, Qwest's filing with the SEC dives straight into its excuse, saying "[$8.9 million] was its then-prevailing value as determined by the average of two independent appraisals."
Let's get a few things straight: If this is true, its independent appraisers should look for another career. Second, why did Qwest feel the need to purchase the house in the first place? Couldn't Mueller sell the house himself like everyone else? While it's anyone's guess, it's only logical to think that Mueller stomped his feet and didn't want to absorb the real estate losses himself ... so he volunteered shareholders to pick up the tab.
Give him a break -- he's trying to keep up with Bill Gates
Regardless of his success, Microsoft paid more than $2 million for Liddell's "relocation expenses" in 2007, after buying his former home so he could move closer to Microsoft's headquarters. Microsoft purchased the home because Liddell (along with a fellow executive) was "unable to sell the homes within a mutually agreed time." Microsoft went on to explain, "We then resold these homes at our expense." This, apparently, was quite a bit less than it paid for them.
Let's go out on a limb and imagine that "unable to sell the homes within a mutually agreed time" was code for "In this housing market, my home is worth less than a pile of Zunes."
It's tough for everyone
Of course, there're plenty of examples of stupendously small pay packages for executives who are worth their weight in gold. The two Google
But let's be honest -- when you're independently wealthy, that's how it should be. Even if an executive has to relocate for a job, it was their choice to purchase the house at whatever price they paid for it. If executives can't handle market risk within their personal finances, how can they be expected to within the companies they're hired to manage?
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