No, I'm not talking about the Kardashians or a Franco Zeffirelli production at the Metropolitan Opera (though the term could apply to both). Rather, I'm talking about a recent Towers Watson report on perquisites.
The report has good news and bad news, though which is which may depend upon your perspective. The good news is that fewer companies provide any perquisites and those that do seem to have cut back on the types of perks offered to their executives. The bad news is that, at least according to Towers Watson, (1) perks continue to play a "meaningful role" and (2) the value of perks has not changed much. So, if I'm reading the report right, the perks that remain are getting richer.
But the report is a bit murky in some respects. It says that club dues, personal use of corporate aircraft and company car programs have been the hardest hit, while programs "like" company-paid physicals have increased. Does that mean that the costs of all those physicals offset the drop in plane and car usage? Given the relative costs of these items, I tend to think not. Also, the report says that despite the cuts, "company car allowances and personal use of corporate aircraft were the most prevalent perquisites in both 2008 and 2013." How this all sorts out is a bit mysterious.
And lest you think the report is devoid of humor, I call your attention to the following line relating to planes and automobiles (trains are notably absent): "These perquisites are...seen as important to ensure that executives can focus on their duties and be efficient in their roles" (the italics are mine). Ha!
In all this, it's important to remember that the SEC rules on disclosing perquisites only require disclosure of their "incremental" costs, which more or less means only those additional costs relating to personal usage. In other words, what I'll refer to as "embedded" costs are not reported. That may bring a smile to some of us as well.
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