A Ticket To Ride In StyleRichard Brandt and Joseph Weber
FOR LOTS OF TOP executives, commuting is a company-paid perk. These trips, usually chauffeur-driven, can be a hefty expense--especially for those living far from headquarters.
A couple of this year's proxies show how hefty. Jerry Sanders, Advanced Micro Devices' chief, got a $93,206 benefit last year for the driver and Mercedes that shuttles him the 50 miles between his San Francisco home and Silicon Valley. An AMD spokesman says Sanders can work en route.
The justification is similar for Merck Executive Vice-President Edward Scolnick ($58,955 in commuting benefits), ferried between the Philadelphia suburbs and the company labs in Rahway, N.J. Ditto for Chief Financial Officer Judy Lewent ($55,855), who goes from New York to Merck's headquarters in Whitehouse Station, N.J. Both use helicopters or cars.
Why did AMD and Merck bother to report the costs at all? Because the expenses exceed 25% of what the SEC calls "other annual compensation," which excludes salary and bonus--the legal requirement for reporting. Alan Johnson, head of executive-pay consultant Johnson Associates, suspects many companies go over the 25% max yet simply don't comply with the rules. Indeed, a survey of big-company proxies by the Washington Document Service found no other mentions of commuting. At least this perk is taxable.