There has been much ado about the high salaries that executives are receiving. But what about the perquisites?
Are they too much or does it really benefit the company? After doing a perusal of the reports filed within the last week, this is what I came up with. All of the following comes from the SEC’s EDGAR pages.
Source Interlink Companies Inc. (SORC) a fulfillment and merchandising company of entertainment related products, provides its executives with reimbursement for country club dues, personal use of apartments in New York, New York and Park City, Utah, personal use of company-leased motor vehicles, and supplemental medical expense reimbursement. Stock is down 2% from the beginning of the year.
Sabre Holdings Corp. (TSG-OLD), which is in the business of providing travel services and products, has an interesting severance package for its executive officers, which kick in under certain conditions. Here are just a few:
A lump sum payment to cover financial planning, annual executive physical and country club membership. Reimbursement of relocation expenses, if the executive moves his or her residence more than fifty miles. A lump sum payment for the executive to purchase travel, accident, major medical, dental and vision insurance for himself or herself and dependents.
Stock is up 3.2% from the beginning of the year.
Developers Diversified Realty Corp. (NYSE:DDR) a shopping center and mini-mall REIT, provides certain executives with reimbursement of country club dues. Stock is up 5.9% from the beginning of the year.
The CEO of Peoples Financial Services Corp. (NASDAQ:PFIS), a bank holding company, receives reimbursement for dues for a golf membership at a country club of his choosing. Stock is up 8.5% from the beginning of the year.
Synovus Financial Corp. (NYSE:SNV), a bank holding company, offers some of its executives reimbursement of country club dues, personal use of the corporate aircraft, spousal entertainment, post-retirement office space and administrative assistance, a painting worth $61,166, and here is one I haven’t seen before, security alarm monitoring. Stock is up 6.5% from the beginning of the year.
Surprisingly, four out of the five stocks above were up and outperformed the Dow Jones Industrial Average, which is up only 1.7% from the beginning of the year.
If you find these types of reports interesting, you should check out footnoted.org, an outstanding blog, written by Michelle Leder, who does what we should all do but most of us don’t like to do, don’t want to do or don’t have the time to do: comb through all the 10K reports, 10Q reports and other SEC filings. Check it out and please support her site.
Disclosure: Author does not own any of the above.
UPDATE: A response was forwarded by the PR firm for Source Interlink [SORC]. Here is their response:
[Information about] Source Interlink was based on information that was in recent SEC filings (specifically, the company’s proxy statement filed 02/21/07). We certainly are not disputing the facts of the column, nor challenging the references to Source. However, we do believe this is an instance where events have overtaken what’s in the historical record. The corporate perks Seeking Alpha referenced for Source were put in place by the company’s former leadership, but new management, named in mid-November of 2006, has taken a dramatically different approach to perks.
Source’s new management is, in fact, focused on expense reductions, which it stressed in its third quarter fiscal 2007 earnings release and conference call on 12/11/06. That’s an important reason the perks cited in the recent proxy statement are listed as “historical” – they’ve by and large been eliminated.