Evolving business environments, increased scrutiny on environmental, social and climate initiatives, as well as stakeholder pressure are driving organizations to re-examine what they offer within their executive perquisites programs, according to our new research.
Organizations use executive perks as a tool to attract and retain key talent. These can provide peace of mind and security to certain executives, as well as to the organization and its stakeholders/shareholders. However, enhanced disclosure rules and increased scrutiny of company leaders and their actions have put executive perks under the microscope in recent years, and employers are responding. In 2023, 7% of companies in the S&P 500 disclosed an adjustment to their perks program. Among that group:
Interestingly, allowance-based perks were among the benefits most commonly eliminated, indicating these companies had opted for a more structured approach to granting executive perquisites.
As of 2023, among S&P 500 companies, the median aggregate spend reported for executive perks for all named executive officers (NEOs) was approximately $223,000. Among these companies, 83% provided at least one perk for their CEO, while 81% did so for other NEOs (see Figure 1).
Personal use of corporate aircraft is the most prevalent executive perk, with 46% of companies providing this benefit to CEOs in 2023 and 31% offering it to other NEOs (see Figure 2). Companies prioritize this benefit for security and efficiency purposes; however, it comes at a cost. Corporate aircraft use was the most expensive type of perk, with the median value for CEOs at approximately $132,000 (see Figure 3).
However, companies aren’t necessarily writing a blank check for personal/private air travel. One-third (33%) of companies that provide personal use of corporate aircraft disclose the use of an annual limit on such travel, expressed as either a fixed-dollar amount or a total number of hours. The median annual limit, disclosed as a fixed-dollar amount for CEOs, was $190,000; for annual time-based limits, the median was 75 hours.
Nearly one-quarter (24%) of CEOs receive home and/or personal security services. This suite of security services also can extend to identity theft or cybersecurity protection. Of the companies that offer their CEOs security benefits, 9% (or 2% of the total data sample) include these digital protection services. The median value of security services for CEOs in 2023 approached $50,000.
Companies also utilize perks and benefits to address executives’ health and financial wellbeing. More than one-third of companies provide financial and/or tax planning services to their C-suite, which may allow covered executives to stay focused on business initiatives and mitigate reputational risk. Similarly, annual physical exam coverage is nearly as common. This perk aims to promote executives’ holistic health; good health may also provide reassurance to corporate stakeholders and/or shareholders.
Companies may continue to tweak their perks programs to find an appropriate and effective use of these benefits for CEOs and other C-suite executives, balancing competitive and business needs. As scrutiny of companies and executives continues to increase, our research points to additional emphasis being placed on perks programs that address travel, home and personal security protection.
A version of this article appeared in Workspan on April 11, 2024. All rights reserved, reprinted with permission.
