More companies offer security to CEOs in wake of United Healthcare CEO shooting

Companies are beefing up security for top executives in the wake of violent events targeting corporate leaders.

Personal security was the second most common benefit companies were considering offering to their executives when they were surveyed between April 30 and June 27, according to a new report from Ayco, a financial planning and wealth management arm of Goldman Sachs.

More than one-quarter of compensation and benefits professionals surveyed said their organization offered its CEO personal security benefits, a 10-percentage point increase from 2023. Such benefits may include having at least one security person accompany an executive on business travel or during public events, hiring an armed driver and security company vehicle, or conducting a home security assessment.

This uptick comes as the Securities and Exchange Commission (SEC) is evaluating disclosure requirements surrounding executive perks, and considering whether security benefits should be subject to current rules.

Rising risks. A number of incidents that occurred since Ayco last conducted this survey in 2023 have seemingly prompted companies to take a closer look at their security benefits.

United Healthcare CEO Brian Thompson was fatally shot last December outside of a Hilton hotel in Midtown Manhattan while he was making his way to a gathering for investors. More recently, four people were killed by a shooter who breached the entrance of an office building on Park Avenue, also in midtown Manhattan.

Following Thompson’s shooting, the board of animal health company Zoetis moved immediately “to establish a security function within our organization,” Roxanne Lagano, EVP, general counsel and corporate secretary, said during a Sept. 16 panel on executive compensation hosted by the Conference Board.

CEOs and other executives are much more visible today due to their presence on forums like social media, “so security has become much more relevant from that perspective,” Lagano said. She added that security is “not viewed as a perk,” but rather “as a necessary business expense.”

Secure perks. Though more companies are starting to see security as a necessary expense for its executives, it’s still generally considered a “perquisite” under current SEC guidance, and thus subject to the agency’s disclosure rules.

The SEC requires public companies to disclose how much they spend on executive perks like air travel, country club dues, or tickets to sporting events if the costs amount to more than $10,000 annually, unless a firm can demonstrate such benefits are “integrally and directly related to the performance of the executive’s duties.”

Some investors and representatives from public companies questioned whether security should still be considered a perk, though, when the SEC held a roundtable on disclosure requirements in June.

“There is a strong belief among many that security benefits…should be a separate disclosure,” said Jonathan Barber, Ayco’s VP and head of compensation and benefits solutions. He noted that although security is labeled as a perk, companies often mandate it for their executives after conducting a risk assessment.

“The thought is, is that really fair for a company to disclose something, and the expense to be scrutinized as a perquisite?” he added.

While the SEC may be mulling changes to these disclosure regulations, Barber said he wouldn’t expect to see any new guidance prior to 2027. Until then, he expects companies to emphasize their justification for investing in security-related benefits when disclosing them, especially when they involve air travel.

Though firms have previously come under fire for allowing their executives to use the company jet for personal reasons, such benefits hold more water from a corporate governance standpoint if they’re justified by concerns like security, Barber said. More than half (54%) of respondents to Ayco’s survey said their principal reason for letting executives use the company aircraft was security. Similarly, 64% said they offered executives a chauffeur for this reason. Respondents who said their organizations offered access to the company jet for reasons like convenience or efficiency were more likely to put limits on such benefits, Barber noted.