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October 1, 2014

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On top of big salaries, companies like Wynn Resorts pile on perks for CEOs

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Justin M. Bowen

Steve Wynn meets with the media in a villa at Wynn Las Vegas on Wednesday, April 27, 2011.

Wynn Talks With Media

Steve Wynn meets with the media in a villa at Wynn Las Vegas on Wednesday, April 27, 2011. Launch slideshow »

Wynn Resorts kept a suite open all year at its tony Las Vegas hotel and casino for founder and CEO Steve Wynn, at a cost of nearly $452,000.

Former IBM CEO Samuel Palmisano was guaranteed an administrative assistant and furnished office for life as a retirement gift — plus a $1 million office renovation.

Chipmaker Advanced Micro Devices bought the house CEO Rory Read struggled to sell for $790,000 _ and gave him another $180,000 to cover his underwater mortgage.

These are not uncommon extravagances in the exclusive world of CEO perks, replete with bodyguards, chauffeurs and private jets. Last year, the median value of perks received by CEOs of big public companies was nearly $162,000, an increase of more than 9 percent, according to executive pay research firm Equilar. Perks declined in 2009, but have risen for three straight years.

Perks are just a small part of CEO compensation _ the median pay for CEOs of S&P 500 companies last year was $9.7 million. And some companies are cutting back on perks, or at least getting rid of the ones that shareholders find most offensive. Still, they're a reminder of how CEOs' lifestyles are far removed from those of their shareholders, customers and employees.

Last year, companies paid for their CEOs' country club memberships, let them use corporate planes for personal travel and gave them health care plans better than their employees, among other perks.

Some corporate governance experts say giving perks to executives already making millions just exacerbates the public perception _ fair or not _ that they're more interested in lining their pockets than helping the company.

"They might do without a plane," says Brandon Rees, acting director at the investment office of the AFL-CIO union group, referring to CEOs' use of company planes for personal travel. "And instead invest it in (research and development)."

Companies tend to defend perks as legitimate business expenses that ultimately benefit shareholders: Flying on private planes keeps the executives safe. Country club memberships help them network. An attractive package helps a company lure the best talent.

"It is in the company's best interest if that person doesn't have to think about daily things as much as you or I might need to," says Jay Meschke, president of CBIZ Human Capital Services, a compensation and human resources consultant outside Kansas City, Mo. "You want to make sure that 100 percent of this person's efforts are devoted to the company's success."

Wynn Resorts calls CEO Wynn its "creative and organizational force," and says having him "in residence" at the Wynn Las Vegas "is a tremendous benefit to our guests and shareholders." The company says Wynn spends most of his time at the resort, and doesn't own a home in Las Vegas.

IBM says that giving the retiring CEO an office and administrative support is consistent with past practice, but declined to comment further. Advanced Micro Devices says that buying Read's old home helped speed up his transition to AMD from Lenovo, where he was chief operating officer.

Here are some other notable perks from 2012, spotted with help from GMI Ratings, which ranks companies on corporate governance metrics, and Footnoted.com, which scans SEC filings for institutional investors:

• AN EXCLUSIVE CLUB: Diebold, an ATM security company, got rid of country club benefits for all its executives except CEO Thomas Swidarski, who was Equilar calculated would earn $6.1 million for 2012. The company said that "he, more so than our other executives, would benefit from the business development and networking opportunities." The company spent $72,280 on memberships for Swidarski, who stepped down in January under pressure from a board unhappy with the company's financial results.

• A PLACE TO CALL HOME: Insurer Axis Capital Holdings gave Albert Benchimol a housing allowance of $25,000 when he became CEO last year. That was included as part of a pay package, mostly in stock awards, that could be worth $22.7 million. Axis says it gives housing allowances to certain executives to help them pay for second homes in Bermuda, where the company is based, so that "talented executives" won't be deterred from joining the company. Shareholders earlier this month voted against the pay packages for Benchimol and other executives. The company didn't comment at the time.

Click to enlarge photo

Sheldon Adelson, chairman and CEO of Las Vegas Sands Corp.

• HOME, SAFE HOME: Las Vegas Sands spent $2.8 million to provide security for CEO Sheldon Adelson and his family. The company said it was acting on the advice of an independent security consultant for Adelson, a major donor to the Republican Party whose total pay for 2012 was about $10.7 million. That blew away the $1.6 million spent on a home security system by Amazon for Jeff Bezos, who is No. 2 in that category so far, according to GMI Ratings.

• A DRINK WITH YOUR BENEFITS?: Constellation Brands, maker of Svedka vodka and Black Velvet whiskey, gave its CEO a $10,000 "product allowance," so he could enhance his "knowledge and appreciation of our products." CEO Robert Sands, who made $7.7 million in fiscal 2012, used up $5,532 last year.

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  1. We did eat at the Wynn buffet after my brothers graduation last Sunday, very good & the line wasn't bad.

  2. So what! People like Steve Wynn founded his company with his own money at his own risk and poured his own sweat into it.

    How about a story about the union boss' salaries, perks and ILLEGAL division of funds.

    http://lasvegascitylife.com/sections/opi...

  3. This is why the casino executives can contribute to enormous undercover slush funds to lobby the Legislature for rotten laws that harass and punish small businesses like Dotty's.

    Here's Steve Wynn, complaining about how Obama is ruining his profits while he and his mafia keep trying to pass laws to create high overheads for small businesses. Now that Steve Wynn has made it, he will do everything possible to deprive others of the same chances.