New rules from the Securities and Exchange Commission are playing a role in some companies' decision to trim or drop executive perquisites, such as the use of the corporate jet for personal business and payment of country club membership dues, the Wall Street Journal reports.
The newspaper notes that some companies are concerned about how the perquisites will look to shareholders as new rules requiring greater disclosure of executive compensation take effect. The SEC's new rules require companies to disclose top executives' perquisites unless the aggregate amount is less than $10,000. Before the new rules, the threshold for disclosing the perks was $50,000.
"The discussion is, 'How will our employees and shareowners perceive these perquisites?' " Mark Reilly, a partner at Compensation Consulting Consortium, tells the newspaper. "It just sort of provides ammunition to employee groups and unions to attack your pay policy."
The SEC's rules require clearer disclosure of executive and director compensation. The changes affect disclosure in proxy statements, annual reports, and registration statements, as well as the current reporting of compensation arrangements. The rules require that most of this disclosure be provided in plain English.