Stalkers, disgruntled employees, and protest groups — executive security cost some big tech and media firms upwards of $20 million in 2019...
Stalkers, disgruntled employees, and protest groups — executive security cost some big tech and media firms upwards of $20 million in 2019
Angry shareholders, stalkers, and ex-employees all present security concerns that most normal people don't have to think about.
But for executives whose performance can impact the financial stability of shareholders, especially famous ones like Mark Zuckerberg or Tim Cook, companies spend millions to ensure their safety.Security payments are sometimes considered compensation
When companies provide security to executives, it's sometimes considered a benefit or compensation. All compensation paid to top executives has to be disclosed in SEC filings, which means that we can find out how much firms spent on security by analyzing publicly filed documents.
The chart below shows the security compensation for the tech and media S&P 500 firms with the highest amounts paid for executive security services, according to the most recent proxy statements:
Every public company is required to file an annual proxy statement with the SEC, which updates shareholders on corporate governance matters and presents matters on which shareholders will have to vote ahead of the annual shareholder meeting. Part of what firms are required to disclose is any compensation for their CEO, CFO and otherwise top three highest paid executives throughout the year. This compensation falls into buckets like salary, bonus, incentive, and equity awards, but sometimes, it's not as straightforward, which is why a bucket called "other compensation" exists.
The "other compensation" column is a type of catch-all for amounts that don't fall into the other buckets, and can include things like amounts set aside for retirement funds, benefits plans, costs associated with travel, or relocation costs if an executive has to move for the job. The other compensation column will also sometimes include dollars spent on executive security.
It's worth noting that, in our analysis of executive compensation for top tech and media companies, many did not have security compensation listed in their proxy. The chart included above represents only the highest amounts disclosed as associated with security measures. Of the firms who did disclose amounts spend on security, many spent under $50,000.Typical security packages
According to Jason Porter, vice president at risk management firm Pinkerton, most executive security packages typically include the following: "professional driver, installation of security systems or other security measures at executive's personal residence, protection detail for the executive and his or her family, C-suite-specific security details within in an executive floor in a building, private travel, individual social media monitoring, and cybersecurity protection."
"Employers have a duty of care responsibility to provide a safe and comfortable workplace for all, including to their executive leaders," said Porter. "Key personnel are viewed as assets to the corporation and in many instances are central to the brand or organization's viability. If that leader or key figure should face harm, the organization loses the ability to generate revenue."
Pinkerton, which has worked with firms in the Fortune 100 and in many different industries, provides what the company calls "executive protection" services. These services include things like worldwide rapid agent deployment, threat analysis, real-time intel, and liaison with local authorities. However, the type of security needed often depends on the level of publicity the executive has, according to Porter.
"[Security threats] vary wildly by industry and type of executive," Porter said. "In the case of public-facing CEOs, stalkers, disgruntled employees and the like [can be threats]. In publicly-traded companies, threats can be angered investors... who want to hold executive leaders personally responsible for market fluctuations and stock prices."
Of the top security spenders among big media and tech companies, Facebook is the clear frontrunner, with a combined $24 million spent on security for CEO Mark Zuckerberg and COO Sheryl Sandberg in 2019. This includes a $2.9 million provision for Zuckerberg's use of private jets.
The firm describes the security program in their most recent proxy statement, explaining that because of the visibility and recognition that Zuckerberg has, the security program is necessary: "Under Mr. Zuckerberg's overall security program, we pay for costs related to personal security for Mr. Zuckerberg at his residences and during personal travel, including the annual costs of security personnel for his protection and the procurement, installation, and maintenance of certain security measures for his residences. We also provide an annual pre-tax allowance of $10 million to Mr. Zuckerberg to cover additional costs related to his and his family's personal security."