Sunday, February 29, 2004

Court cases give peek at execs' amazing perks

Title: Court cases give peek at execs' amazing perks
Source: New York Times
Date: February 29, 2004

From the article:
    The details of the personal expenses that executives put on the company tab often are not known because loopholes in federal disclosure rules let publicly traded companies generally avoid disclosing the perks they give executives along with pay and stock options. But the recent trials of Martha Stewart and other executives have revealed the lavish benefits some re- ceive.

    During Stewart's criminal trial, James Follo, the chief financial officer of Martha Stewart Living Omnimedia, testified that she had asked the company to reimburse her $17,000 annually for her weekend driver as well as for trips to her hairdresser, coffee and other items.

    The trials of L. Dennis Kozlowski and Mark H. Swartz, two former top executives at Tyco International, a manufacturing conglomerate, has revealed that Tyco paid an array of their expenses. The bills included tuition to private schools for Swartz's three children and $1 million for a birthday party in Sardinia for Kozlowski's wife. And then there was the infamous $6,000 shower curtain and a $15,000 umbrella stand.
    The average chief executive at a big public company now makes well over $10 million a year, including stock options, almost 20 times the level in 1981 and 500 times the average worker's salary.
The thing we fail to realize is that we all pay for these amazing salaries, bonuses and perks. Companies charge us higher prices in order to fund these extravagances.


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