Executive Perk of the Day, Vonage Edition

Michelle Leder finds one of the weirdest executive perks yet in the employment contract for Vonage CEO Mark Lefar:

The Company shall also promptly pay, or reimburse the Executive for, the costs of his private air travel from and to the Company’s principal offices in Holmdel, New Jersey (subject to the submission of reasonable documentation) in (a) an annual amount up to a maximum of $250,000 in 2008 and $600,000 in 2009 and subsequent calendar years while employed during the Term, plus (b) an amount equal to the cost of commercial air travel for each trip (i.e., the cost of a first-class, fully refundable, direct flight booked one week prior to travel) while employed during the Term.

Stripped of the legalese, this seems to mean that Vonage (VG) is paying for Lefar to commute by private jet between New Jersey and his home in Atlanta — and then, on top of that, is giving him cash equal to the price that he would have paid for a commercial air ticket, had he flown commercial. As Michelle says:

What kind of sense does that make? Has Lefar figured out a way to be in a Gulfstream and a Delta 737 at the same time?

Maybe Lefar needs his personal assistant to be with him in both Atlanta and Holmdel, but refuses to let the assistant onto the private jet? It’s all extremely peculiar.

Comments

[User 478624:]

SOUND LIKE TO STOCK HOLDERS ARE GETING RIP AGAIN, LIKE BIG GOVERNMENT , BULL !!!!

Nov 11 11:50 AM

[Yabadabadoo:]

I do not mind executives receiving Perks as long as they deserve it. I do not believe Vonage is at a stage where he should receive that type of benefit.

Regarding being paid twice for the same Perk; it appears that if he took a commercial jet instead of a private jet, he would be reimbursed for the amount stated in the article. Does not appear that he is being reimbursed twice for the same trip.

Nov 11 12:45 PM

[Nettligent:]

Shareholders are always victims. As a great CEO, you do not want to suck the company and set a good example. Do not blame on CEO alone. Board of Directors are the root cause of problem at Vonage.

Nov 20 11:27 PM