Lehman Brothers Chief Executive Richard Fuld did learn a thing or two from the fall of Bear Stearns. When the 85-year-old Wall Street institution nearly went out of business a few months ago before being swept up by JPMorgan Chase, James Cayne, Bear’s chairman, hired a bodyguard.
According to recent news reports, Fuld has followed suit. He allegedly has kept out of sight and when he appears, it’s with what seems to be hired protection. After all, you can’t be too careful if you’re held accountable for severely depleting the wealth of thousands of people vested in the firm’s future.
Whether or not a business is in financial ruin, guarding the boss is of the utmost importance these days.
America’s largest corporations are paying millions of dollars a year to protect their C-level talent, particularly the CEO. That personal security, as described in compensation reports filed with the U.S. Securities and Exchange Commission, includes everything from computerized home systems to use of company aircraft domestically and internationally, both for business and personal matters. The cost incurred by companies falls under the perquisite, or “perk,” category.
Among U.S. chief executives, Oracle’s Larry Ellison is racking up the highest personal security costs–$1.7 million in 2007, according to compensation reports filed with the SEC by his company. Up there with him are Limited Brands CEO Leslie Wexner ($1.25 million) and Amazon.com CEO and founder Jeff Bezos, ($1.2 million). All three men are on the list of Forbes’ richest people, which partly explains the fuss.
Ellison’s security expenses are notoriously high–the billionaire has also spent a considerable sum of his own money installing top-of-the-line security systems at his Malibu and Woodside, Calif., estates.
Security specialist Alan Schissel said that in cases where companies are paying such incredible amounts, it’s likely for a team to watch the boss’ back, in addition to any home-security system costs. That goes for at the office, on the road and even at home.
Schissel, CEO of Integrated Security Services, said that someone with 24-hour protection could require six bodyguards–commonly either current and former police officers or retired military–each working, on average, eight to 12 hours on a rotating basis. Though in many instances they’re necessary, he doesn’t consider their presence a benefit by any means.
“I don’t consider it a perk because it’s somewhat of a burden,” he said, explaining that effective security for high-profile executives often involves the presence of guards at all times.
by Matthew Kirdahy