Basics of Total Rewards

Perquisites

Perquisites (aka Perks) are additional inducements or benefits that are used to attract and retain key or executive talent.

Typical executive perks may include:

• Personal use of corporate aircraft
• Financial/tax planning
• Company car/car allowance
• Executive physical
• Supplemental life insurance
• Home security
• Spousal travel
• Club dues
• Supplemental disability insurance
• Matching gifts/charity

In organizations today:

• perquisites reflect the search for a competitive edge and can be part of the organization culture.
• perquisites are more cautiously allocated to executives due to taxation, corporate governance requirements, and shareholder scrutiny.
• executive perks reflect a minor component of executive compensation (typically less than 5%) and have been in continuous decline for many years.
• executive perks remain a key focus due to their symbolic value.
• there may be perquisite programs in which all employees can participate (e.g., free lunches, on-site gyms, etc.).