When High Security is a CEO Perk

ll these costs are appropriate corporate business expenses.” Security services are also provided to members of Dell’s immediate family and to locations other than his primary residence.

Meanwhile, Cisco and Intel don’t even mention the words “security” or “executive protection” in the proxy statement section on executive compensation.

So does the fact that Oracle reportedly spent $1.7 million protecting its chief executive, Xerox spent less than $300,000, and Cisco doesn’t mention security at all mean that Oracle is the most paranoid technology company--or that Ellison is the safest CEO? Of course not.

For one thing, companies have vastly different interpretations of how they’re supposed to calculate and report executive protection costs. Dell and Oracle do consider personal use of the corporate aircraft to be part of executive compensation--they just don’t state that they consider it a security expense, as do IBM and Xerox.

Second, different companies and CEOs have different needs for security. “There is no one piece of security that should, without question, be implemented in every executive protection strategy,” says Tim Horner, managing director at Kroll. Threat levels vary across company and industry, and companies must individualize their executive protection strategies as much as possible. (For in-depth coverage, see “The Six Things You Need to Know About Executive Protection.”)

The threat environment of a particular corporation or CEO is dependant on a variety of factors, says Arnette Heintze, a retired U.S. Secret Service agent and now a security advisor at Hillard Heintze. One of those factors is corporate culture. “The CEO of a defense contractor might be exposed to greater risk through international travel than the CEO of a restaurant chain in the United States,” he says.

Who the individual is also plays a big part in determining what to spend on executive protection. Henitze gives the example of celebrity CEO (now chairman) Bill Gates of Microsoft. “The security concerns there are not an issue so much because of the company and the industry, but because of the high profile of the executive,” says Heintze. “Executive security can’t be viewed just in one box.”

So just how much money does Microsoft spend on protecting its top executives? Ironically, the company’s proxy statement is completely silent on the matter. And that might just make it the most paranoid tech company of all.

Reach Associate Staff Writer Katherine Walsh at kwalsh@cxo.com.

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