The 6 Most Extravagant CEO Benefits

NEW YORK (MainStreet) — It's no secret that CEOs at major companies and other C-level executives get a sweet deal, from seven-figure salaries to stock options and hefty bonuses. For most of us, it's a career level we can only dream about. But the perks don't stop there. Many times, the total compensation for CEOs and other "head honchos" goes beyond luxurious and into the ridiculous. Of course, they've earned it — right?

Here's a look at six of the most extravagant executive benefits being offered today.

1. Health plans that cover 100% of out-of-pocket costs

"For equity's sake, a company has to offer the same health plan to all employees, but instead of paying 80% of medical expenses, they'll pay 100% for the CEO, reimbursing them for all out-of-pocket expenses," says Katie Bouton, CEO and founderĀ of Koya Leadership Partners, a national executive search firm for nonprofit companies.

For most companies, it's not about offering the CEO a package that's "better than lower-level employees," it's about offering something enticing that's more of a "lifestyle compensation package," Bouton says.

With large public companies, it's also about having a healthy executive at the helm, says Charley Polachi, managing partner atĀ Polachi Access Executive Search.

"The loss of a CEO could have a significant negative impact on a company's business, so it benefits a company to provide top-tier benefits to the executive and their family," Polachi says. "Many times CEOs will have a required annual physical, complete with stress test and MRI. A company could be seriously damaged if they lost someone to an illness that hadn't been predicted."

2. A down payment on a home, relocation and rent

For CEOs moving to take a job in another country or city, relocation costs for the whole family — including air fare and everything from masking tape to boxes — will be included, Bouton says.

In some cases, Realtor fees or even a subsidized down payment on a house are covered.

"This is something we've seen more of in the last five years due to the housing market being tougher for people looking to sell," Bouton says. "Many companies will pay Realtor fees or even a partial down payment on a house for a CEO who is making the commitment to move across country or to another part of the world."

For CEOs who don't want to make a snap decision on a home, Polachi says many relocation packages will cover temporary apartments until a decision is made.

"In many cases temporary housing or a corporate apartment just makes more sense than having them stay in a Holiday Inn," he says.

3. Lump sums deposited directly into their 401(k) or other retirement fund.

Companies have to provide all employees with the same percent match on retirement accounts, for equity's sake and for IRS regulations — but there's nothing to stop them from depositing a good chunk of change into the CEO's 401(k) at the end of the year.

"What I see most often is they just make a lump sum payment into the CEO's retirement plan," Bouton says. "This goes on at most large companies."

The bigger the company, the bigger the bonus, Polachi says.

"Total compensation scales with revenue. It's the nature of the beast."

4. Signing bonus

Signing bonuses have become almost routine, Bouton says. It's pretty standard for most CEOs to get some kind of bonus just for taking the job. This bonus is designed to entice CEOs who may have lots of offers on the table, or those who may be afraid to make a move.

In many cases, the signing bonus may be a payment for something the CEO will lose when they make the transition, Polachi explains. For example, some CEOs who make a transition may have stock options that aren't fully vested or a bonus they'll leave on the table.

"If you're trying to recruit someone halfway through a fiscal year, you're going to have to give them 'make whole' provisions," he says. "If they've yet to collect 50% of their bonus, then many companies will offer them that amount to convince them to walk away."

5. Private school tuition

"The most unusual perk I have seen would be covering the cost of private school," Bouton says.

This typically happens in markets where it's really hard to entice someone to move — a high-needs area where there are very few options for education.

"If you want your kids to go to the best school and there are very few options, like downtown Detroit or the Rio Grande Valley in Texas, then it makes sense that there would be some compensation to make the move more enticing," she says.

Often, there are tuition-based perks for executives' children even once they hit college, Polachi says.

"Many companies have scholarship programs for executives' children, and really all the kids have to do is write a letter applying for the scholarship every year and it's granted," he says.

6. Private jet and/or private car and driver

In many cases, these perks are about security and efficiency, Polachi says.

"Let's forget about the fact that if you are a CEO of a very high-profile company you're probably going to have some security concerns," Polachi says. "For CEOs that travel 200 days a year and often need to visit five companies in two days' time, it's simply not practical to fly commercial. Just making it through security would take valuable hours of your day."

Also, many CEOs must visit remote areas or locations where there may only be one flight in or out of the city in a day's time, Polachi says.

"It's not about luxury," he says.

Yet even for CEOs who aren't burning up the skies, most — if not all — get a car, Bouton says.

"I see people getting a car and all transportation-related costs covered regularly," she says. "That includes parking costs, gas, tolls, anything related to travel."

— By Kathryn Tuggle

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