Free

Circuit City execs try it and like it…

Here at footnoted.org, we’re all about kicking the tires to see how something works, tastes or feels. Before my recent trip to Copenhagen, I bought an Ipod Touch to see how well the WiFi worked, only to return it and wait for whenever the new Iphone comes out. But the “officer evaluation program” at Circuit City Stores (CC) seems like a pretty nifty perk that the company is trying to dress up as something else. Here’s how the company describes it in the proxy it filed yesterday:

The purpose of the Officer Evaluation Program is to give our executive officers the opportunity to become familiar with the products that we sell and to evaluate them over a 18- to 24-month period in order to provide longer-term user input for our merchandising department. Each executive officer may use merchandise with a total specified discounted retail value at any given time. At the end of the evaluation process, the executive officer must return the merchandise or purchase it at its then current value. The incremental cost to us for providing this benefit in each year is the sum of the discounted retail prices of all products purchased during the year.

Are we really supposed to believe that it takes someone as long as two years to “evaluate” a 65 inch flatscreen TV or some high-end GPS system? Given how fast new technology becomes outdated, isn’t it more likely that at the end of those two years (or, perhaps sooner since the program only seems to impose annual limits), the executive simply gets whatever the latest new product is?

To be fair, Circuit City has disclosed the program in earlier filings, but this is the first year they’re providing this level of detail or noting that executives can keep the merchandise for as long as two years. And the company does set a limit of $8,000. And executives who opt to keep the products they’ve evaluated do have to pay for them. At least most of the time, that is. Last April, when CFO Michael Foss stepped down, he got to keep $5,148 worth of merchandise he had been evaluating.

But why not just call a perk a perk, instead of pretending that something is being done in the name of market research?