Change of heart?

August 5, 2005

Now that NCR Corp. (NCR) has a new CEO, it seems to be making some other changes too, when it comes to the perks it gives to top executives. In the same 8-K where it detailed new CEO Bill Nuti’s contract, the company noted that its board had formalized its perks policy for top executives. Under the new policy, which was approved by the board late last month, “NCR’s executive officers may receive limited perquisites.” The perks include “use of the corporate aircraft on a limited basis for personal travel” allowing directors and executives to let friends and family tag along when they’re flying the corporate jet, and providing home security services for some of its executive officers.”

Initially, it seems like formalizing the perks policy is a good thing — perhaps even deserving one of the rare gold stars that I try to hand out on Fridays — until I did a quick search of NCR’s earlier filings.

For example, in the proxy the company filed back in March, it had this to say about perks: NCR prefers to compensate its executive officers in cash and equity rather than with perquisites. Consequently, NCR’s perquisites for executives are minimal and must be approved by the Committee. The Company does not provide its executive officers with typical perquisites such as company cars, club memberships, financial planning, or executive physicals.” And earlier NCR filings provide few, if any, details about perks.

So it seems, at least on the face of it, as if NCR has had a change of heart when it comes to executive perks. Formalizing the perks policy is good, but not if it leads to runaway perks.

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