A dilly of a deal (or two) for Barry Diller …

April 30, 2010

We’ve heard of two for the price of one. It’s generally considered a good deal if you can get it. So what would you call one for the price of two?

Maybe “Barry Diller.” As chairman and chief executive of IAC/InterActiveCorp (IACI), the sprawling Internet conglomerate, and chairman and “senior executive” of Expedia (EXPE), the online travel service, Diller collected just about two of everything last year — and it made for a tidy sum indeed.

We caught a glimpse of this when Expedia filed its proxy on April 27, but we didn’t get the big picture, as it were, until IAC followed with its own proxy filing on Wednesday. We’ll cut to the chase:

  • Diller’s salaries were modest by titan-of-industry standards: $965,000 combined, with $500,000 coming from IAC (despite being the smaller company, at $2.65 billion market-cap to Expedia’s $7.1 billion).
  • The companies made up for that with bonuses: $3.7 million total, of which $2 million came from Expedia.
  • Only Expedia awarded options last year, valued at $1.34 million.
  • Diller’s total haul: $7.74 million, with IAC paying 42% and Expedia paying 58%.

But the perks really made the one-for-two special shine. Without putting both proxies side by side, you might miss the fact that Diller’s employers spent a whopping $1.7 million on his personal air travel: $991,553 at IAC and $704,262 at Expedia. And that doesn’t even include the $911,000 in personal flights that IAC says Diller paid for. (It’s not clear whether he also paid Expedia for some flights beyond those reported as income; the company doesn’t appear to disclose any such payments, however.)

The explanation is the usual one for both companies. Here’s IAC:

“Pursuant to Company policy, Mr. Diller is required to travel, both for business and personal purposes, on corporate aircraft. In addition to serving general security interests, this means of travel permits him to travel non-stop and without delay, to remain in contact with the Company while he is traveling, to change his plans quickly in the event Company business requires, and to conduct confidential Company business while flying, be it telephonically, by email or in person. These interests are similarly furthered on both business and personal flights, as Mr. Diller typically provides his services to the Company while traveling in either case. — For certain personal use of the corporate aircraft, Mr. Diller reimburses the Company at the maximum rate allowable under applicable rules of the Federal Aviation Administration.”

And here’s Expedia’s:

“Pursuant to Company policy, Mr. Diller — [is] encouraged to travel, both for business and personal purposes, on corporate aircraft. In addition to serving general security interests, this means of travel permits [him] to travel non-stop and without delay, to remain in contact with the Company while traveling, to change plans quickly in the event Company business requires, and to conduct confidential Company business while flying, be it telephonically, by email or in person. These interests are similarly furthered on both business and personal flights, as Mr. Diller — typically provide[s] services to the Company while traveling in either case.”

(We removed references to the company’s chief executive officer, who also gets free personal plane rides, from Expedia’s original language.) But we did find it interesting that IAC said Diller’s jet usage was required and at Expedia, it’s encouraged.

We hesitate to think how much time Diller spends in the air. That kind of cash could buy 98 last-minute, first-class round trips from New York’s JFK airport to Tokyo’s Narita on American Airlines (with nearly $2,500 left over for cab-fare) — and those tickets were $17,279 a pop when we checked on kayak.com early this morning. The companies also say they spent a total of $871,000 on salaries, and possibly other costs on maintaining the corporate aircraft generally — with $471,000 from IAC –but that covers business use as well as personal.

The rest of Diller’s perks are a little harder to itemize: They add up to $70,519 (61% from IAC), and include everything from personal use of third-party car services to office-space and technical support for Diller’s personal staff.

Equally intriguing may be the way Expedia and IAC have decided “to share certain expenses associated with such usage, as well as certain costs incurred by IAC in connection with the provision of certain benefits to Mr. Diller.” Expedia picks up 35%, and IAC picks up 65%. Over the course of the year, IAC says Expedia paid it $241,000 under this arrangement (Expedia pegs it at “approximately $250,000″), presumably balancing out any divergence from that split. “Expenses include costs for personal use of cars and equipment dedicated to Mr. Diller’s use and expenses relating to Mr. Diller’s support staff,” the proxy says, so there’s some overlap with the figures above.

Of course, the more we look at it, the more we realize it really is a two-for-one deal — for Diller. From that perspective, it’s not half bad.

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