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    This document discusses executive perquisites (perks) and includes: 1. A definition of executive perks and examples like corporate aircraft, automobiles, housing, and insurance. 2. Summaries of research articles that studied perks in countries like China and across 17 countries, finding benefits like efficiency but also risks like reduced firm value. 3. A discussion of the similarities and differences of perks between large companies, countries, and perceptions of stock options.

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    This document discusses executive perquisites (perks) and includes: 1. A definition of executive perks and examples like corporate aircraft, automobiles, housing, and insurance. 2. Summaries of research articles that studied perks in countries like China and across 17 countries, finding benefits like efficiency but also risks like reduced firm value. 3. A discussion of the similarities and differences of perks between large companies, countries, and perceptions of stock options.

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    86 views12 pages

    Group Presentation Executive Perquisites Perks

    Uploaded by

    api-532948836
    This document discusses executive perquisites (perks) and includes: 1. A definition of executive perks and examples like corporate aircraft, automobiles, housing, and insurance. 2. Summaries of research articles that studied perks in countries like China and across 17 countries, finding benefits like efficiency but also risks like reduced firm value. 3. A discussion of the similarities and differences of perks between large companies, countries, and perceptions of stock options.

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    of 12

    Executive Perquisites (Perks)

    Cassidy Logelin, Gabriela Chinn Farmer, Emilee Cui


    Agenda

    1. Definition

    2. Research Articles

    3. Similarities & Differences

    4. Advantages & Disadvantages

    5. Discussion Questions
    ● Corporate Aircraft
    ● Automotive
    ● Professional Services
    ● Relocation Services
    ● Corporate Housing
    ● Tax Benefits
    What are Executive Perks? ● Severance/CIC: “golden parachute”
    ● Flex Perks
    ● Insurance Premiums
    ● Personal and Home Security
    ● Charity
    ● Event tickets
    ● Dividends
    ● Plan based contributions
    “8 Truly Incredible CEO Perks”

    ● Personal security
    ● Private air travel
    ● Life insurance
    ● Disability premiums
    ● Villa leases
    ● Financial planning
    ● Tax assistance
    ● Legal fees
    “Executive Benefits and Perquisites”
    Fortune 500 Execs

    ● Aircraft Efficiency

    ● Automotive Attraction and retention

    ● Personal Services Perks Security


    “Excess perks and stock price crash
    risk: Evidence from China”

    ● Positive correlation between excess perks and crash risk


    ● Perks constitute an important part of compensation for
    managers to perform
    ● Reduce firm value by resource diversion
    ● Regulations passed by the Chinese Government to cap excess
    compensation
    ● Loopholes
    “The economic psychology of incentives
    - An international study of top managers”

    ● 17 countries researched - increase in LTI over STI


    ● Make up a large proportion of total compensation
    ● Executives surveyed: $30,000 today vs. $90,000 in three years
    ● Extrinsic motivation in terms of expectancy theory not effective
    ● Executives perceive a loss of value; prefer less risky, more immediate rewards
    ● Conclusion: Long-term incentives are not an efficient form of reward
    Similarities Differences
    ● Larger companies have greater ● LTI impact to the organization
    perks ● Country variation
    ● Same top perks offered around the ● Different types of perks
    world considered effective/not effective
    ● Stock options have the greatest ● Difference in impact of stock
    impact options
    ● Size of company impacts the
    management philosophy
    Advantages Disadvantages
    ● Improve production ● Branding
    ● Attraction ● High cost
    ● Retention ● Perceived inequity for non-
    ● Branding execs
    Discussion
    Question 1: Because:

    1) They improve organizational


    morale and culture?

    2) They improve organizational


    Why should executives receive
    performance/profit?
    perks?
    3) It will attract/retain top talent?
    Discussion What is one outlandish perk you
    Question 2: would consider to be effective in
    retaining/attracting you if you
    were an executive?
    References

    Dewan, A. (2013, December 16). 8 truly incredible CEO perks. Human Resources Online. Retrieved April 3, 2019, from

    https://www.humanresourcesonline.net/8-truly-incredible-ceo-perks/

    Equilar.com. (2016). Executive Benefits and Perquisites. Equilar. Retrieved April 3, 2019 from https://www.equilar.com/reports

    /31-executive-benefits-and-perquisites.html/

    Long, R., Singh, P., & Belacourt, M. (2018). Strategic compensation in Canada (6th ed.). Toronto, Ontario: Nelson.

    Pepper, A. and Gore, J. (2014). The economic psychology of incentives: An international study of top managers. Journal of

    World Business, 49(3), 350-361. https://doi.org/10.1016/j.jwb.2013.07.002

    Xu, N., Li, X., Yuan, Q., & Chan, K. (2014). Excess perks and stock price crash risk: Evidence from China. Journal of Corporate

    Finance, 25, 419-434. https://doi.org/10.1016/j.jcorpfin.2014.01.006

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