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Protection is a pricey perk for top tech CEOs

Ann Bednarz | June 27, 2013
Tech companies pay for cars, drivers, bodyguards, and residential security systems to keep CEOs safe.

As part of Marissa Mayer's employment agreement, Yahoo agreed to reimburse her for up to $50,000 of security expenses per year. In 2012, the company paid $39,467 for personal security services for CEO Mayer, who joined the company in July of last year.

NCR paid $55,636 in security-related costs for its CEO, William Nuti. The payments are for "the Company-provided car and driver Mr. Nuti is required to use for security purposes in and around the New York City area, to the extent that such trips were for commuting purposes," NCR explained in its proxy statement.

In the same pricing league is Intel, which paid $58,600 for home security expenses for former CEO Paul Otellini, who retired this spring.

AT&T picked up the tab for CEO Randall Stephenson's home security, which amounted to $101,923 in 2012.

The tab at Amazon.com is much higher: $1.6 million on security for CEO Jeff Bezos. The Internet retailer justifies the security expenses in part because of Bezos' low compensation (besides the $1.6 million security perk, Bezos' only pay is his $81,840 salary).

"We provide security for Mr. Bezos, including security in addition to that provided at business facilities and during business-related travel," Amazon wrote in its proxy statement. "We believe that all Company-incurred security costs are reasonable and necessary and for the Company's benefit, and we believe that the amount of the reported security expenses is especially reasonable in light of Mr. Bezos' low salary and the fact that he has never received any stock-based compensation."

There are likely other tech CEOs who receive security perks in addition to these seven tech leaders, but not all of those perks are itemized in financial reporting documents. For example, Time Warner Cable paid for CEO Glenn Britt's "personal use of a Company-provided car and specially trained driver provided for security reasons," but didn't disclose the cost.

The U.S. Securities and Exchange Commission doesn't require companies to report the exact cost of a perk if the benefits are valued at less than $10,000 — but it does view CEO security as a perk. While a company might consider the CEO's security to be a corporate expense, the SEC sees it differently because there's a personal benefit associated with company-paid security and because it's not a benefit that's offered to all employees.

 

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