The long distance CEO…
In order to attract a new top executive, some companies promise the keys to the corporate jet, as we footnoted here with I2 (ITWO) last year. But Advance Auto Parts (AAP), which announced in late November that it had hired former Best Buy (BBY) executive (and AAP board member) Darren Jackson as its new CEO, is taking things a bit further, according to this exhibit attached to an 8K filed late Friday. Here’s the key part:
The Executive shall not be required to change his place of residence in Minnesota in order to perform the duties and responsibilities of the Executive’s Position. The Executive’s work location shall initially be the Store Support Center in Roanoke, VA. Executive shall have use of the Company plane to travel to and from Roanoke, VA, and to travel to and from charitable board meetings as necessary, subject to the Advance Auto Parts, Inc. and Subsidiaries Policy For Personal Use of Corporate Airplane. For clarification, the Executive’s travel from and to his home to and from the Store Support Center shall constitute business travel on behalf of the Company which is necessary to the performance of the Executive’s duties and responsibilities hereunder, and shall not be deemed by the Company to be ‘Personal Use’_ travel.
The contract then goes on to say that the company will open a “corporate executive center” in the Minneapolis area by June so that Jackson can work closer to home. It’s not clear from the filing, however, how much this is going to cost, not just in physical costs, such as renting office space and buying furniture, but in not having the CEO at hand to lead the troops, such as it is.
And, since the access to the corporate jet is going to be considered a business expense, instead of a perk — once the Minneapolis office is open, Jackson will still presumably need to show up in Roanoke from time to time — it’s highly unlikely that investors will ever find out how much this is costing. Needless to say, this arrangement wasn’t mentioned in the press release.