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Golf Club Dues, Other Exec Fringe Benefits Trimmed Way Back

September 3, 2008
Related Topics: Compensation Design and Communication, Retention, Latest News
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A growing number of companies are finding that there’s a pretty simple way to avoid taking heat about lucrative fringe benefits dished out to top executives: Just pull the plug on perks.

Now that the Securities and Exchange Commission requires companies to disclose executive benefits valued at more than $10,000, large corporations are shedding some of the smaller—yet most frequently offered—fringe benefits provided to their top officers.

“Many companies find it easier to eliminate perquisites than to continue to try to explain why they are needed,” said Alex Cwirko-Godycki, research manager at Equilar, a compensation consulting firm.

Financial-planning and country-club fees appear to be the executive privileges that most companies are chopping from their CEO compensation packages. Only about 62 percent of Fortune 100 companies disclosed that their chief executives received some sort of financial-planning benefit last year, according to data from Equilar, down from 74 percent in 2006.

Even those companies that continued to pay for their CEO’s financial planning—which could include tax preparation services—pared down what they were willing to fork out for such services. The median value of financial-planning benefits declined 9.2 percent last year, to $15,575, according to Equilar.

While paying for club memberships was less prevalent, fewer companies are now footing such bills for their CEOs, with 26.3 percent of companies disclosing that they offered the perk in 2007, down from 28 percent in 2006.

More telling, perhaps, is how much companies are now willing to pay for these dues: The median value of club membership perks awarded to CEOs last year was $3,996, a 64 percent drop from the $11,070 in median club dues Fortune 100 companies paid to their CEOs in 2006.

Filed by Mark Bruno of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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