Many perks and one gold star at Ameriprise…
The folks on the Compensation and Benefits Committee at Ameriprise Financial (AMP) feel our pain. “We realize,” they say in the company’s proxy, filed Monday, “executive compensation can be a complicated subject,” so they’ve “tried to make this year’s Compensation Discussion and Analysis easier to read.”
And yes, the font used in the footnotes to the summary comp table is slightly larger than in last year’s proxy, in which the notes could be read only with the aid of an electron microscope. But it’s still tiny. I noticed, though, that “other compensation” for Chairman and CEO James Cracchiolo–whose total comp topped $24M in 2007–had ballooned from an already healthy $562K in 2006 to nearly $1.3 million last year, so I decided to squint at the footnote and see what was up.
Cracchiolo’s extras include a $35K “executive perquisites allowance,” access to a company apartment when he’s in Minneapolis on business (the company is headquartered there, so I wonder where he lives), personal travel on company aircraft (totaling about $75K in 2007 ), club memberships, and waivers of the normal fees for investing in Ameriprise-affiliated hedge funds. Those same perks showed up in 2006 as well, but the 2007 proxy mentions some new items like spousal travel reimbursements, on which Mr. Cracchiolo also got tax gross-ups (eat your heart out, Angelo Mozilo)! No specific figures appear for these goodies, though the perks chart (actually quite legible, thank you) shows that Cracchiolo’s perk-related tax gross-ups add up to $45K.
Cracchiolo’s security-related extras have also expanded since last year. The 2006 proxy mentioned only “security monitoring costs for his personal residence,” but in 2007 he doubled up to “security system installation and monitoring for his two personal residences.” As in the prior year, Ameriprise cites security as an excuse to provide Cracchiolo with a driver to take him back and forth from work, though I noticed that previously the commuting took place in a “car” and now it’s a “vehicle.” I don’t know if this wording change is meaningful; perhaps the commuting sedan has become an Airstream, or maybe someone just wanted to use a word with more syllables.
Just to show there are no hard feelings, I’m throwing in a gold star for Ameriprise. According to the proxy, they’ve adopted a tight process for granting stock options, in which they set grant dates in advance so it’s well nigh impossible to backdate, frontdate, sidedate (all right, I know there’s no such thing), or engage in any similarly popular and enjoyable activities.