Very secure…

April 20, 2006

No doubt that CEOs need security these days, given the uncertainty of interacting with cranky shareholders and flying around on Gulfstreams. And no doubt that some CEOs — those who happen to be one of the richest people in the world, for example — need more security than other CEOs. But why would someone like Jeff Bezos, who runs Amazon.com (AMZN) need over $1 million worth of security while the entire executive team at Microsoft (MSFT) spent less than a quarter of that?

In a footnote to the proxy Amazon filed earlier today, Amazon says it spent $1.1 million on "security arrangements for Mr. Bezos in addition to security arrangements provided at business facilities and for business travel." Presumably that includes the executives’ use of the corporate jet, which the company doesn’t provide details on. But the $1.1 million still seems a bit steep, particularly when compared with the cost of providing these services at nearby Microsoft. In their proxy (filed last September) the company noted that while it didn’t include the cost of security in its summary comp table, the cost of providing those services "were less than $50K for any executive". That includes Bill Gates.

Indeed, the amount of money Amazon spent on providing security for Bezos is more than twice the amount that Starbucks (SBUX), which is also based in Seattle, and which I wrote about here spent on providing security services to its CEO, Howard Schultz. What’s also not clear is why Amazon didn’t disclose this expense before. In last year’s proxy, Bezos’ other annual compensation for 2004 is listed at zero. But in the just-filed proxy, the company says it spent $1 million on the security services for Bezos in 2004.

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