Here is the conclusion from this Cooley alert penned by Michael Bergmann, Brad Goldberg, Ali Murata, Amanda Weiss, and Janice Chan:
“Reexamining personal security-related perquisites is further supported in an environment where the line between personal and business activities has been so significantly blurred since the 2006 release. Technological advancements have all but eliminated the nine-to-five workday for senior executives and ushered in a world where public company executives are expected to be working and available at all times.
The days of commuting back and forth to company headquarters where the majority of an executive’s time was spent in a corner office have been replaced by significant periods of remote work from an executive’s personal residence or while ostensibly on vacation. Furthermore, post-COVID, fully remote or hybrid work is commonplace, and many executives now spend a significant amount of time working from home.
We of course understand that the implications of the foregoing analysis are potentially far reaching. For instance, it may compel the conclusion that personal travel on corporate aircraft or with a company-provided car and driver that is mandated pursuant to a company’s security protocols should not be treated as a perquisite for compensation disclosure purposes.
However, we don’t shy away from the conclusion that such a result may be appropriate in at least some circumstances. Indeed, revisiting the appropriateness of that conventional analysis may ease the tension resulting at the many companies requiring executives to travel on corporate aircraft and use a company car and driver for all personal travel, while simultaneously requiring those executives to reimburse the company for the incremental cost of that travel – a result that could be viewed as even more onerous in an environment where the requirement is rightly viewed as a precondition to the executive’s proper discharge of their duties.
In summary, the issues presented here do not lend themselves to bright-line conclusions, but as we head into the coming proxy season, we believe many companies will have good reason to revisit their treatment of personal security-related perks, and we would encourage the SEC to defer to a company’s principled conclusions and not take a hidebound stance that inflexibly adheres to the conventions of an earlier time.”
Authored by
Broc Romanek