A new report from the consulting firm Towers Watson finds that fringe benefits are on the decline for more and more executives.
In the “Executive Compensation Bulletin” the firm released this week, Towers Watson reports that while 95 percent of Fortune 500 companies offered their executives perquisites in 2008, that number has dropped to 85 percent in 2013. There was also a notable decline in how many perks companies were doling out to senior managers. In 2008, 60 percent of companies granted more than three perks to the top brass, while just six percent offered their senior managers zero perks. Five years later, just 33 percent offer three or more such extras, while a full 15 percent offer none at all.
The biggest dip came in the number of supplemental life insurance policies–the prevalence of which slid from 52 percent of companies offering it in 2008 to just 24 percent now. Country club dues, personal use of corporate jets and company cars also saw significant drops. Besides executive physicals, the only two perks that saw a rise in prevalence were housing allowances and “spousal travel.”
Still, even if the number of perks is going down, the value of those perks–how much a company is spending on them–is staying relatively the same or, in a few cases, even going up. Towers Watson found that the median value of personal use of corporate jets, for instance, rose 35 percent, from $92,596 in 2008 to $125,473 in 2013. It says the increase could be due to rising fuel costs or a shift in the companies included in the sample from one report to another: Companies that don’t value the perk very much might have eliminated it altogether and not been counted in the sample.
Still, the drop in perks looks a little different when examining just the best-compensated CEOs. Towers Watson’s study looks at a broad sample of 332 companies on the Fortune 500 list, but if you examine the fringe benefits awarded to only the 100 highest paid CEOs in the United States, the annual value of those extras was $320,635, up 19 percent between 2011 and 2012, according to an analysis by the executive compensation firm Equilar for the New York Times. The rich get richer, even at the very top.
While everyone isn’t lowering the largess, it’s good to see some companies have gotten the message that paying for country club dues or piling on extra insurance policies doesn’t look so good in an era of budget cuts and slow growth. Disney, for instance, recently began doing away with monthly car allowances that, Bloomberg reports, amounted to $900 per month for one mid-level executive.
Could the rate of executive perks fall even further? Towers Watson thinks it could. “The trends of the last five years suggest there are more changes to come,” the report says. Let’s hope that turns out to be true.
Jena McGregor is a columnist for On Leadership.