From the website of a company called, I kid you not, Versailles Protection Services
Well, something I've predicted for a long, long, long, long time on this site is coming to pass. CEO and executive security spending these days is through the roof:
Companies have been slashing almost every cost imaginable to survive the recession, yet they are spending more than ever to calm CEOs who fear for their personal safety.
Starbucks, which has laid off workers, closed stores and switched from whole to 2 percent milk to save pennies a gallon, bumped its spending to $511,079 last year on the personal and home security of CEO Howard Schultz. FedEx, which quit matching employee 401(k) contributions, spent $595,875 on the security of CEO Fred Smith. Walt Disney spent $645,368 for CEO Robert Iger; Occidental Petroleum spent $575,407 for Ray Irani; and McKesson spent $401,706 for John Hammergren.
Be it paranoia or prudence, corporate spending on CEO safekeeping is escalating in the face of painful cutbacks, and not by a little. The median spending on personal and home security for CEOs at the 100 largest publicly traded companies was $65,348 in 2008, up 123 percent from $29,291 in 2007, according to executive compensation research firm Equilar. Ten companies alone spent a total of $4.6 million on CEO security in 2008, 40 percent more than the 10 biggest spenders of 2007.
Are such fears legitimate -- the money wisely spent with every dollar so scrutinized? Companies say yes in their annual proxy filings with the Securities and Exchange Commission, stating that few expenditures are more aligned with the interest of shareholders than safeguarding their corporate leadership. Starbucks says in its proxy that among all perquisites paid to executives, security is "particularly" provided for the company's benefit.
In times of unpopularity, CEOs can be targets. Last month, the Austrian vacation home of Novartis CEO Daniel Vasella was burned, and police suspect animal-rights extremists. That followed July vandalism when his mother's urn was stolen from a cemetery, where the grave of his sister, who died at age 19, also was desecrated and someone added crosses with the names of Vasella and his wife.
"Given several notable incidents of violence towards executives, it doesn't come as a surprise that companies are taking increased measures," Equilar CEO David Chun says.
Not exactly surprising. I'd venture to say that the popularity of the business class' upper echelons is at an all-time low right now. WIth good reason. It was after all, the culture of risk-taking and false assumptions wholeheartedly embraced by most in their ranks that largely led to the current economic devastation.
Desperate people do desperate things. There's nothing inscrutable about this: if you've worked hard but now lost your job and plummeted from making $50,000 a year to living in a tent city, you're naturally in shock. A certain percentage of said people would then dearly love to exert some feeling of vengeful satisfaction and, when they see the CEO who ran the company into the ground still making millions while they struggle to feed their kids, they become enraged. Some will torch the vacation homes of the privileged, some will try to assault them (we're at the stage where many would doubtless cheer at a CEO getting hit in the face) and a certain even more desperate percentage will try actions that are even worse.
It's human instinct to want to see those who violate our notions of justice pay. That's one reason for the evolution of the modern justice system: a figure outside a personal dispute (the state) dishes out punishment according to clearly established guidelines (laws). This has largely replaced the old tribal vigilantism (think Romeo and Juliette) throughout much of the world.
In his classic essay Vengeance is Ours, historian Jared Diamond noted that societies with a more tribal method of vengeance have a lower life expectancy, by several decades, mostly due to constant, low-level violence. So it's easy to see why this change is usually considered an improvement.
That's the theory anyway, and one also pretty deeply ingrained into the culture. Most people will not pursue physical vengeance, even if the justice system isn't dispensing it on those they consider richly deserving.
The word "privilege" literally comes from the Latin for "private law," implying groups or individuals that don't have to play by the rules that apply to the majority. The perception, at least, that the law is for all is essential to the modern justice system that's evolved over the last 500 years.
The more people perceive certain groups as going unpunished by traditional authorities, the more that will begin to fray and eventually break.
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