Cell Calls/Checkups Keep Executives In Tune, New PricewaterhouseCoopers Perks Survey Reveals; Despite Merger Wave, Only 50% Grant Change-Of-Control Plans.

WESTPORT, Conn.--(BUSINESS WIRE)--Oct. 14, 1999--

When it comes to executive perquisites, more than eight out of ten companies surveyed offer mobile telephones and free medical examinations as part of their overall compensation packages, a new study from PricewaterhouseCoopers LLP indicates. At the same time, financial counseling; club memberships and company-paid automobiles are offered by over 40 percent of the companies participating in the survey.

The sole category of major perquisite showing a pronounced decline since 1997, when the survey was last conducted, is incentivized travel. First class travel; usage of company aircraft and executive drivers all registered marked declines, of 11 percent; 12 percent and nine percent, respectively.

"The message is clear: Companies today are orienting the type of perquisites they offer to their CEOs, senior and middle management, and professional staff according to broad, quality-of-life criteria," noted Carl Weinberg, a PricewaterhouseCoopers principal, in commenting on the survey results. "And a dollars-and-cents bottom line is not the only way in which executives today are judging the value of their perks. Recipients are also interested in incentives that add to their overall sense of well-being. And company-subsidized travel is less and less a part of the perks picture, as such tools as teleconferencing and Intranets increasingly substitute for this weighty line item in corporate budgets," he added.

Interestingly, the survey underscores that companies designing perquisite packages clearly believe that they know what is best for their senior executives and professionals: a mere 10 organizations participating in this year's survey permit their executives to opt for specific perquisites. That is down from 15 organizations when the survey was last conducted.

Surprisingly, only 50 percent of this year's participating companies (71 organizations) provided their top executives with change-of-control arrangements, a significant perquisite when viewed against today's constantly surpassed totals for merger-and-acquisition activity. The predominant triggering event for such provisions to take effect is a change of control and/or voting power, with 94 percent of responding organizations utilizing this criterion. At the same time, a lump sum payment is the most common form of compensation, with 83 percent of those companies responding saying that method of payment would prevail in the event of a change of control.

The survey also takes an in-depth look at the growing prevalence among many organizations of Supplemental Executive Retirement Plans, or SERPs. Of those responding companies providing SERPs to their top people, the survey found that the so-called Rabbi Trust, so named after the first employee receiving such an arrangement, is the most common form of funding. Over half of the companies offering SERPs (nearly 54 percent) use the Rabbi Trust vehicle. Other financing vehicles include trusts secured by life insurance; Serery Bonds (ensuring against non-payment); Secular trusts (providing protection against bankruptcy and insolvency) and COLI (Corporate-Owned Life Insurance) arrangements, the survey revealed.

Focusing on executive insurance, the survey found that Director and Officers Insurance was the most prevalent form of insurance provided by those companies offering this type of flexible perquisite: 65 organizations offered D&O insurance, up from 44 companies in the prior survey. Corporate-Owned and Dependent Life Insurance, with 33 and 37 organizations, respectively, offering them, along with Supplemental Medical and Post-Retirement Health

Insurance, (38 and 37 companies offering, respectively), were among the relatively less-commonly-provided insurance perquisites pinpointed in the new survey.

"The 1999 Executive Perquisites Survey" was conducted by the Global Human Resource Solutions Survey Unit of PricewaterhouseCoopers LLP. A multi-industry roster of 143 organizations from all regions across the United States participated. Participant asset/annual revenue size ranges from less than $100 million to greater than $7 billion.

PricewaterhouseCoopers' Global HR Solutions helps companies manage their worldwide workforces by providing insight and analysis, together with strategy, tactics and implementation. The practice's global network of professionals works in multidisciplinary teams located in more than 80 countries to bring relevant business, industry and technical experience to each client engagement. Services include business process reengineering; global shared services and outsourcing solutions; systems integration; data warehousing; compensation and benefits consulting; expatriate management; labor consulting and performance measurement.

PricewaterhouseCoopers (www.pwcglobal.com), is the world's leading professional services organization. Drawing on the knowledge and skills of 150,000 people in 150 countries, we help our clients solve complex business problems and measurably enhance their ability to build value, manage risk and improve performance. PricewaterhouseCoopers refers to the US firm of PricewaterhouseCoopers LLP and other members of the worldwide PricewaterhouseCoopers organization.

Copies of the survey can be purchased from the GHRS Survey Unit for $240.00, via the Customer Service Department, at 203/341-2268.

Note to editors: The name PricewaterhouseCoopers is one word, with upper case P, upper case C, and all other letters in lower case.