The cost of providing security services to Starbucks (SBUX) founder and Chairman Howard Schultz has gone down sharply over the past three years, judging by the preliminary proxy the company filed late yesterday. But it’s still considerably more than the money that Clifford Peache shelled out in the 1980 coming-of-age classic My Bodyguard.
But perhaps even more significantly, it’s the first time that the company has chosen to disclose the cost of providing these services to Schultz and it may provide a hint to what other companies spend on protecting their top executives. In a footnote to the summary compensation table explaining Schultz’ “other compensation” of $679,542 last year, the company notes that the bulk of that money — $413,734 — was for “security services”. That’s down sharply from the $677,334 the company spent on those services in fiscal 2003, though anyone looking for that disclosure in the 2003 proxy would need much more than a double shot of espresso to find it. Ditto for the proxy filed last year, when the company spent $522,372 for Schultz’ security but didn’t disclose it to investors.
As the company notes in the preliminary proxy, Starbucks considers these expenses to be “appropriate business expenses” instead of “personal benefits”, which may explain the lack of disclosure up until now. Still, that begs the question of why the company is disclosing it as compensation, instead of burying it somewhere as an expense, as no doubt other companies do. The services, which are also provided to several other top executives, include both home security and monitoring. But Schultz is the only one who gets his own bodyguard. Of course, given the hefty amount of money involved, we’re guessing it’s bodyguards with an S.