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Knowledge Center Reports

Executive Benefits and Perquisites

January 27, 2016

Paying executives competitively not only attracts new hires, but also can retain and motivate them to achieve exceptional results. Direct compensation such as salary, bonus, equity and performance incentives constitute the lion’s share of an executive pay packages, yet don’t tell the entire story. Many companies choose to supplement pay packages with benefits and executive perquisites to award status and provide convenience or necessities pivotal to a particular executive’s role.

Executive perquisites, or perks, go beyond the typical benefits awarded to rank-and-file employees, and span a spectrum from use of corporate aircraft to financial planning and tax preparation services. Since the dot-com bubble burst in the early 2000s, regulation by the Securities and Exchange Commission has increased the transparency of perks granted to public company executives. Perks deemed excessive by some investors and media led to transparency surrounding the types and amounts of perks and the business case for including them.

Aircraft use, for example, often attracts the attention of the public, and companies justify aircraft perks by espousing the advantages in efficiency. Between 2011 and 2012, the prevalence of aircraft perks declined 3.9 percentage points to 38.9% of all CEOs in the S&P 500, but has since remained flat. In that same time frame—2011 to 2012—the median value of aircraft perks grew from $86,422 to $103,231 and has also remained steady ever since. Though perhaps not directly related, this shift occurred coincident with the implementation of Say-on-Pay.

For this report, Equilar examined the popularity and value of aircraft, automotive and professional services perks for both CEOs and NEOs in the S&P 500, which were consistent as the most common perks over the study period. This data is supplemented by a look at eligibility for a wider variety of perks in the Fortune 100 for the current year including tax gross-ups, security and club dues.


Equilar’s Executive Benefits and Perquisites details the prevalence and value of aircraft, automotive and professional services perks granted by S&P 500 companies to CEOs and named executive officers (NEOs), as disclosed in annual proxy statements. Equilar captured additional perks for companies in the Fortune 100, including plan-based contributions, insurance premiums, security, charity, event tickets, dividends, aircraft tax gross-ups and flex perks. For the Fortune 100, prevalence was based on executive eligibility whether or not an accompanying value was disclosed. The study defines years by fiscal year ends between August 1st and July 31st. Formal definitions of the individual perks can be found in the appendix.

Aircraft Perks

Aircraft perks often come up first in conversations about top-level executive benefits. Many corporate policies allow executives to take advantage of the corporate aircraft for personal travel or to travel for business with their spouses, families and/or guests—typically citing security purposes. These perks are often perceived as part of the executive persona, allowing executives to travel and conduct business at the same time.

After a dip from 2011 to 2012, the prevalence of aircraft perks for CEOs over the last three years has remained stable. In 2014, 38.6% of CEOs in the S&P 500 received an airline perk of some value. By comparison, there was also a large dip in the number of other NEOs receiving aircraft perks from 2011 to 2012, but that figure has declined more each year, falling to 18.2% in 2014.

Median aircraft perk values for CEOs in the S&P 500 have remained stable over the last three fiscal years after rising sharply from 2011 to 2012. Since fiscal 2012, the CEO median has fluctuated within a range of $1,500. Meanwhile, the median value for aircraft perks among S&P 500 NEOs has varied more widely last four fiscal years.

For fiscal 2014, the top disclosed value for an aircraft perk was $1.0 million, 16.1 times the median value of $65,316 for all NEOs. The average of the top five disclosed values was $799,931, or 12.2 times the median value.

“In comparison to direct compensation, perks are pretty minimal in dollar value, but because they get a disproportionate amount of focus from shareholders and advisory groups, comp committees are spending more time on those items,” said Kristine Bhalla, a principal with ClearBridge Consulting Group.

Automotive Perks

When executives are not flying on corporate aircraft, many opt for company cars. Automotive perks can include everything from parking and mile reimbursement to a private car and driver. Private cars and drivers are often justified for security purposes, especially for high-profile executives.

Very similar to aircraft perks, automotive perks for CEOs have remained stable since 2012 after shrinking in prevalence from 2011. In 2014, 37.3% of CEOs in the S&P 500 received an automotive perk. Meanwhile, the prevalence of automotive perks for NEOs over the last four years has slightly declined, dropping 4.1 percentage points since 2011.

This brief decline in prevalence may have been related to the implementation of Say-on-Pay in 2011, suggests Jim Kroll, a director in Willis Towers Watson’s New York office, who leads the compensation consulting firm’s governance advisory practice for executive compensation.

“When Say-on-Pay passed, companies considered what might be low-hanging fruit for potential trouble spots,” Kroll said. “As companies sensed what elements would be scrutinized, it was a natural choice to exclude some perks.”

“Since then, there has been decreased temperature on this topic,” Kroll added. “From a proxy advisor standpoint, the main focus is on the value of perks relative to base compensation. We don’t see a lot of shareholder objections to perks, but they want to understand the business need. For example, if a company were to disclose a benefit that appears large and is not transparently communicated, we may hear a grumble from shareholders or proxy advisors. But if a high expense is paid under the terms of a company-wide policy, that would soften some of the blow.”

Median automotive perk values have declined slightly year over year from 2011 to 2014. In fiscal 2014, the median value for automotive perks for CEOs was $18,650, down from $19,765 in 2011. In contrast, the median automotive perk values for NEOs in the S&P 500 increased over the last four fiscal years, from $15,600 in 2011 to $16,742 in 2014.

Professional Services Perks

Because many executives receive complicated pay packages, companies often provide professional services as a perk to help them prepare personal taxes and other financial statements. Specifically, professional services include financial counseling, tax planning and preparation, estate planning and any other professional services. Professional services perks are often capped or otherwise limited.

The prevalence of professional services perks for S&P 500 CEOs has fluctuated over the last four years, but has remained above 35% and increased slightly to 37.1% in 2014. Professional services perks are the most prevalent benefits among S&P 500 NEOs, totaling 33.7% in fiscal year 2014.

The median value of professional services perks for CEOs has declined over the past four years, down from approximately $20,000 at the median in 2011. After holding steady at $15,000 in fiscal years 2012 and 2013, the median dropped to $14,255 in fiscal year 2014. The median value for professional services perks for NEOs has remained very stable over the last four fiscal years.

Other Perks

Equilar captured more detailed perk information for the Fortune 100, including plan-based contributions, insurance premiums, aircraft, automotive, security, tax gross-ups, charity, event tickets, relocation, club dues, dividends, aircraft tax gross-ups, housing and flex perks. This detailed break-out sheds light on the variety of miscellaneous perks executives receive as part of their competitive pay packages. A more comprehensive look at the Fortune 100 is captured in the Equilar Custom Project database.

The number one perk among executives in 2014 was plan-based contributions, which includes amounts paid to executives related to post-retirement or equity ownership plans. Nearly 95% of executives received this perk in 2014, and more than 90% of executives received plan-based contributions each year since 2011. This high prevalence is due to the fact that almost every company has some sort of post-retirement or equity ownership plans set up, and post-job security is a standardized benefit that most employees receive. The perk with the lowest prevalence was flex perks, making up 3.1% of executives in the Fortune 100. Flex perks are just that—flexible, they allow an executive to choose how to spend an allowance meant to cover all benefits they would receive. Many companies do not provide flex perks as they already have specified plans in place for not only executives, but the rest of their employees.

“I wouldn’t say they’re going by the wayside, but perks have been one of the pay elements where we’ve seen a meaningful change in the last five years,” said ClearBridge’s Bhalla. “In limited cases companies have put in perk allowances where they don’t specify what perks an executive receives, but have a total cap on them.”

Appendix: Perquisite Definitions

  • Corporate Aircraft: The value for this perk includes the incremental cost to the company for an executive’s personal use of corporate aircraft. The cost excludes aircraft tax gross-ups and business use of aircraft.

  • Automotive: This perk is composed of automotive-related perks which may include expenses paid for automobile, driver, mileage reimbursements, maintenance, car lease, parking, and ground transportation.

  • Professional Services: This perk is composed of financial planning services, including financial counseling, tax planning and preparation, estate planning, and any other professional services.

  • Relocation: This perk includes amounts related to home selling costs, moving costs, temporary housing and travel.

  • Corporate Housing: This perk includes amounts related to apartments or housing maintained by the company for use by an executive while traveling.

  • Tax Gross-Ups: Also referred to as tax gross-ups, tax reimbursements are typically paid to executives to cover taxes incurred as a result of receiving compensation in the form of perks.

  • Aircraft Tax Gross-Ups: This perk includes reimbursement of taxes for use of corporate aircraft.

  • Severance/CIC: Includes any severance/CIC payments, vesting of equity, etc.

  • Flex Perks: This perk is an allowance for an executive to choose how to spend on a variety of perks.

  • Insurance Premiums: This perk includes amounts related to any kind of insurance.

  • Personal and Home Security: This perk includes amounts related to personal security of the executive and of the executive’s residence.

  • Charity: This perk includes amounts related to donations to charitable organizations, schools or other non-profit organizations.

  • Event Tickets: This perk includes amounts related to entertainment.

  • Dividends: This perk includes dividends paid on equity.

  • Plan-Based Contributions: This perk includes amounts paid to executives related to post-retirement or equity ownership plans.

For more information on Equilar’s research and reports, please contact Dan Marcec, Director of Content & Marketing Communications at The contributing authors of this report were Hannah Dumas and Allyson Hahn, Research Analysts, and Matthew Goforth, Equilar Research and Content Specialist.

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