DCJS Instructor
09-08-2008, 12:16 PM
The Annual “Cost of Protecting the CEO” Round-Up
Every year Forbes looks at the cost of protecting the CEOs of major U.S. corporations and it’s that time again.
Leading the list again this year is Larry Ellison, CEO of Oracle with a reported $1.7 million spent on personal security. Another returnee to the list is Jeff Bezos, CEO of Amazon.com with $1.2 million and Leslie Wexner, CEO of Limited Brands with $1.25 million. You can read the Forbes list of the personal security big spenders by going to the Forbes website. While the list is interesting, the names of people not on the list are more interesting in my opinion.
Where’s the really, really, big money people like Bill Gates, Warren Buffet, Oprah Winfrey etc…?
First off the Forbes list only contains CEOs of publicly traded corporations. So, why isn’t Bill Gates on this list? I suspect its because Mr. Gates pays for his own personal security, not his corporation which means the costs are not declared on corporate filings. A quick glance at Microsoft’s corporate filings doesn’t say much (remember I said quick, not thorough) about how much Microsoft spend on protecting Mr. Gates. I know one thing, they sure didn’t spend anything on protecting Steve Ballmer when someone threw stuff at him in Europe earlier this year. As far as Mr. Buffet goes, he’s an ordinary guy who doesn’t go for much personal security. Ms. Winfrey is the CEO of a privately held corporation and hence, doesn’t report the same expenditures as a publicly traded corporation.
You have to take the reports about expenditures on CEO security with a grain of salt. There’s different ways to report the expenditures. For example, if a CEO has a personal driver who is trained in evasive driving, is the driver a chauffeur or a security specialist? If a CEO travels to a board meeting abroad, is the security at the board meeting just for him or everyone present? If a CEO has to take a corporate aircraft to Mexico, as one example, is that for security purposes or business travel or both? All this simply means is that there are different categories for reporting these costs so its very hard to get an accurate picture. But does it matter?
At the end of the day, I’m not sure it really matters how much a firm spends on protecting their CEOs. Some of these executives are leaders in industries with a strategic value to the U.S. and of course the same could be said about their
counterparts in foreign firms. Each one of them in their own way has
some symbolic value either as an American citizen or corporate leaders.
Clearly the costs from merely a business perspective, are more than worth it.
Every year Forbes looks at the cost of protecting the CEOs of major U.S. corporations and it’s that time again.
Leading the list again this year is Larry Ellison, CEO of Oracle with a reported $1.7 million spent on personal security. Another returnee to the list is Jeff Bezos, CEO of Amazon.com with $1.2 million and Leslie Wexner, CEO of Limited Brands with $1.25 million. You can read the Forbes list of the personal security big spenders by going to the Forbes website. While the list is interesting, the names of people not on the list are more interesting in my opinion.
Where’s the really, really, big money people like Bill Gates, Warren Buffet, Oprah Winfrey etc…?
First off the Forbes list only contains CEOs of publicly traded corporations. So, why isn’t Bill Gates on this list? I suspect its because Mr. Gates pays for his own personal security, not his corporation which means the costs are not declared on corporate filings. A quick glance at Microsoft’s corporate filings doesn’t say much (remember I said quick, not thorough) about how much Microsoft spend on protecting Mr. Gates. I know one thing, they sure didn’t spend anything on protecting Steve Ballmer when someone threw stuff at him in Europe earlier this year. As far as Mr. Buffet goes, he’s an ordinary guy who doesn’t go for much personal security. Ms. Winfrey is the CEO of a privately held corporation and hence, doesn’t report the same expenditures as a publicly traded corporation.
You have to take the reports about expenditures on CEO security with a grain of salt. There’s different ways to report the expenditures. For example, if a CEO has a personal driver who is trained in evasive driving, is the driver a chauffeur or a security specialist? If a CEO travels to a board meeting abroad, is the security at the board meeting just for him or everyone present? If a CEO has to take a corporate aircraft to Mexico, as one example, is that for security purposes or business travel or both? All this simply means is that there are different categories for reporting these costs so its very hard to get an accurate picture. But does it matter?
At the end of the day, I’m not sure it really matters how much a firm spends on protecting their CEOs. Some of these executives are leaders in industries with a strategic value to the U.S. and of course the same could be said about their
counterparts in foreign firms. Each one of them in their own way has
some symbolic value either as an American citizen or corporate leaders.
Clearly the costs from merely a business perspective, are more than worth it.