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What is the cost of a CEO's safety to a company?

Being a CEO of a Fortune 100 company has its perks, but it also comes with significant risks to personal safety. Timothy Horner, who leads Kroll's security risk management practice, points out that threats to CEOs can range from global issues like a defence company’s involvement in drone manufacturing, which could make its CEO a target for groups like the Islamic State, to personal threats from disgruntled relatives.

Such threats not only endanger the executives but can also have catastrophic consequences for the financial well-being of the company. It's not surprising then that leading companies invest heavily to ensure their executives are safe.

Who invests the most in CEO security?

According to the 2014 Benefits and Perquisites Report by Equilar, which analyses executive compensation, Amazon tops the list. In 2013, the company spent $1.6 million on security measures for its founder and CEO, Jeff Bezos, who is worth an estimated $28 billion.

What does this level of security entail?

Amazon has kept details under wraps. In a 2014 SEC filing, the company described these costs as necessary for business operations, emphasizing that they were reasonable and essential for ensuring Bezos's safety, noting his modest salary and lack of stock-based compensation as further justification.

Other companies also spend large sums on executive protection. Oracle, for example, spent $1.5 million on security for Larry Ellison after he stepped down as CEO. This sum primarily covered security for his residence, mandated by Oracle’s board due to Ellison’s importance to the company. Disney and Berkshire Hathaway also have significant security expenditures for their top executives.

The annual spend on CEO security varies, but the Fortune 100's median spend was $28,618 in 2013, according to Equilar. This figure fluctuates year by year and does not always include costs related to secured air travel if CEOs are required to use corporate jets for safety reasons.

It’s crucial to note that while a CEO's security might require a hefty budget, it’s a critical investment. High-profile executives face unique risks that can necessitate elaborate security measures. Alan Schissel, a former NYPD sergeant and CEO of Integrated Security Services, estimates that comprehensive security for a high-net-worth CEO could cost close to $1.2 million annually, not including advanced home security systems.

Ultimately, the extent of security provided often reflects the individual CEO’s perceived risk and the value they represent to the company and its shareholders.


Something to think about!

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