Executive benefits and perks have undergone quite a bit of change since 2007 and several studies suggest that executives are no longer receiving the breadth of perks they used to several years ago.
A 2011 study conducted by CompData, for example, found a decline in the percentage of companies offering company cars, annual physical exams, and voluntary deferred compensation programs to CEOs from 2009 to 2011.
ERC’s data shows similar trends. In analyzing changes to executive perks in our Executive Compensation Survey since 2007, several changes have been noted. Fewer organizations seem to be providing these to their executives, and particularly their CEOs.
Percent of employers offering benefits and perks to CEOs: 2007-2011 comparison
Company cars (company owned or leased)
Club memberships (business, social and/or country club)
Periodic physical exams
Special retirement plans (supplemental pension and/or thrift)
Additional life insurance
All-expense medical insurance
Income tax preparation
Mfg = Manufacturing employers
NMfg = Non-manufacturing employers
Source: 2007 & 2011 EAA National Executive Compensation Surveys
Does this trend mean that employers should stop providing executive perks? Not necessarily.
Extra benefits and perks should be considered as part of the total compensation package. Perks in lieu of a higher base salary, for example, may be quite beneficial. Similarly, depending on the executive, it may be important to offer some of these perks in order to acquire the right talent.
Also, some benefits may be important to offer for your business’ operations. For example, some organizations find it important to provide annual physical exams to their executives to ensure that their leaders are healthy and equipped for the job. Others find that their executives need to be provided with a vehicle or automobile benefits for ease of travel.
The decision to offer executive perks comes down to a few basic questions:
- Does your organization need to provide special benefits or perks in order to attract executive talent? If so, which ones are most important or necessary?
- Are other employers in your industry or size offering certain benefits or perks?
- Can your organization afford to provide special benefits or perks?
- Which executives will qualify for special benefits or perks?
- What is the risk in not providing certain benefits and perks?
Finally, it’s important to consider that executive positions can be demanding and extra benefits and perks can help increase productivity and support the executive.
To participate in ERC Compensation & Benefits Surveys, which reports executive compensation, benefits, and perks provided by employers, including those in Northeast Ohio, please click here.