Perk or Necessity? One-Third of Public Company CEOs have Personal Security Detail
May 24 2012 by ChiefExecutive.net
In 2011, Las Vegas Sands Corp. paid $2.6 million for CEO security detail and Northrop Grumman paid $2.2 million; a total of 30 percent of public companies report spending on CEO security.
This week, The Wall Street Journal, addressed the issue of public companies paying for extensive security details in an article on CEO perks. The Journal explained that companies did less to reign in CEO perks in 2011 than they did in 2010, but does personal security really count as a perk?
A large 68% of CEOs had personal access to a company private jet in 2011, many racking up travel bills well into the hundreds of thousands of dollars. And 30% of these public companies reported spending money on a CEO security detail (which can be considered for a tax break if recommended by outside consultants). Defense contractor Northrop Gumman spent $2.2 million its CEO and $5.2 million on its lead independent director. That’s $7.4 million in security in one year alone.
In 2010, Amazon CEO Jeff Bezos got $1.6 million worth of security, according to Footnoted.
According to this article in 2009, Google spent under $234,000 on CEO Eric Schmidt, Disney spent $589,000 on CEO Bob Iger and FedEx spent $461,000 on CEO Fred Smith.
Executive security is an important issue, but it is interesting to see the spread of spending on CEO safety. So, is a multi-million dollar security bill overkill or a necessary precaution?