Are You Getting Your Share?
from
May/June 2007
by Ron Connaught
Does the company you serve as a director lend you money and then forgive the loan? Give you a credit card and pay the bill? Reimburse you for your golf-club membership?
If the answer to any of these questions is no, you may be serving on the wrong board. A part of the new compensation-transparency rules from the Securities and Exchange Commission requires that a company’s 2007 proxy disclose in detail how the pay packages of its six highest-paid executives and all its board members are put together, and what all of it really adds up to. That’s fine for CEOs, of course, since everybody wants to know how much they make. But board-member comp? Is this relatively measly number worthy of a second look?
Apparently so.
Corporate Board Member
has obtained a questionnaire sent to the directors of a prominent company we won’t identify, asking 32 questions about various perks the respondents might be getting. The ones cited above are examples. As the document, pictured at right, shows, there are also questions about the personal use of company planes and automobiles and about whether the company pays to have directors’ cars washed, lets them use its vacation property, or picks up the tab for personal dinner parties, home furnishings and appliances, and other things.
Our view is that whoever is asking the questions—in-house lawyers, auditors, compensation consultants—wouldn’t be asking them unless such perks were in fact being dispensed. Seems the IRS, as well as shareholders, might also like to know the answers.
