Accuracy in perks…

gulfstream.jpegWith all of the disclosures of high-flying executives lately — Ebay (EBAY) disclosed in its proxy filed late yesterday that Meg Whitman had spent $773.4K on her personal use of the corporate jet, up from the $290K spent in 2005 and Cablevision (CVC) CEO Charles Dolan spent $381K on his personal use of the corporate jet and/or helicopter according to its amended K — it seems like as good a time as any to raise this question: just how accurate are the numbers that are being disclosed?

I raise this question because a few tipsters have contacted me recently to say that the numbers that some companies have been disclosing when it comes to executive perks have been massaged, and not too gently. Here’s what one tipster wrote to me recently: “For a couple of companies where the CEO is required “for security” to use the plane and you see a low number, such as $75,000, you know that, in all likelihood, either he does not have much of a life outside of work or he is gaming the system.” How so? By not counting some of the costs related to the use of the plane, such as the dead-head time to get back to wherever the plane needs to be after shuttling the CEO for weekend skiing in Jackson Hole. Or by averaging the cost of the company’s fleet — either owned or leased — so that the cost per hour drops sharply. Using industry averages, for example, a GV might cost around $8,000 an hour, while a Citation would cost around $1,500. By taking an average cost, the price drops sharply even though “you can bet that the CEO never has seen the inside of the Citations” one tipster writes.

And then there’s the curious use of what exactly is a business expense. In the proxy that Starwood (HOT) filed last week, it disclosed spending $1.7 million to ferry former CEO Steven Heyer between his home in Atlanta and the company’s offices in New York. But the money wasn’t considered to be Heyer’s personal use of the plane, even though it seems hard to argue that living in one city and working in another is something other than a personal choice.

So the question is: how can investors tell which companies are honestly reporting their expenses and which ones are “gaming the system”? Post your thoughts below.