Executive perquisites remain an important element of most executive pay programs, but there are numerous issues employers should consider before providing perquisites to executives.
The perquisites that employers provide to their executives vary greatly. While there has been a general decline in the value and pervasiveness of executive perquisites in recent years in response to shareholder scrutiny of executive compensation generally, executive perquisites remain an important element of most executive pay programs. However, there are numerous issues that employers should consider before providing perquisites to their executives, including:
Whether the perquisites are taxable and, if so, how the employer will address its withholding obligations.
How to treat perquisites in connection with an executive's termination of employment.
For public companies:
how to disclose perquisites; and
the views of shareholder advisory groups and institutional investors.