Tags: CEO | spouse | travel | companies

Executives' Spouses Get Free Ride at Company Expense

Monday, 28 Oct 2013 12:29 PM

By Michael Kling

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When it comes to travel costs, spouses of CEOs — as well as other senior executives and even part-time board of director members — get a free ride . . . at the company's expense.

A USA Today analysis of corporate proxies found numerous examples of companies paying for spouses' travel, lodging, meals and other travel-related expenses. Companies even funded attendance at the 2012 London Olympics several spouses of executives and directors.

The revelations come at time when companies are coming under increasing shareholder wrath for executive compensation and perks, such as cars, aircraft and country club memberships.

Editor’s Note:
75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

Executive salaries and stock options may be well-publicized, but a plethora of perks, including free travel for spouses, buried in small print of Securities and Exchange Commission filings often go unnoticed.

Companies maintain that funding spouses' travel costs helps improve relationships between executives, board members and employees.

Corporate governance experts disagree.

"You have to wonder why companies are paying for stuff like this,'' Michelle Leder of proxy-tracker Footnoted told USA Today. "It's not as if any of these people are surviving on minimum wage or have taken a vow of poverty."

A survey by compensation consultant Towers Watson indicates that about 20 percent of Fortune 500 companies provide spousal travel perks, USA Today reported. "There is some ambivalence and confusion on how companies are reporting this,'' Robert Newbury, Towers Watson's director of executive compensation, told USA Today, saying spousal travel benefits may be under-reported.

Some companies lump the costs with other executive perks in financial filings, making it almost impossible to find how much on spousal travel costs.

The perk does not appear to be disappearing. The percentage of companies financing spousal travel has remained essentially the same since 2008, Newbury told USA Today.

Forbes scrutinized the "other compensation" sections in corporate proxies to find outrageous examples of executive compensation. Title insurance company Fidelity National Financial allotted $453,382 for executives to stay at a dude ranch owned by its chairman, William P. Foley II, as well as $55,000 for them to visit wineries, restaurants and a hotel Foley owns, according to Forbes.

Barry Diller, chairman of Expedia and IAC/InterActiveCorp, racked up $1.28 million of personal jet use plus another $243,000 of travel expenses, for which he reimbursed the company, Forbes reports, citing FootNoted.

Tootsie-Roll Industries spent $1.2 million flying executives, Melvin and Ellen Gordon, from their home in an undisclosed location to Chicago, where it rents an apartment for them for $120,000 a year.

Editor’s Note: 75% of Seniors Make This $152,000 Social Security Mistake (See Easy Fix)

Related Stories:

Robert Reich: Stop Subsidizing Sky-High CEO Pay

Slate's Yglesias: CEO Compensation Makes No Sense

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