From Perk to Protection: Boards Recast Security as a Fiduciary Duty

Once seen as executive luxuries, perks like corporate jets and chauffeured cars are being redefined. In today’s volatile climate, security has leapfrogged from status symbol to business imperative—and boards are asking how they should safeguard their leaders.

By the numbers:

• A new Equilar report shows security perks for NEOs have surged 45% since 2020, climbing from 23.3% to 33.8% across Equilar 500 companies.
• Even more striking, the median value of these benefits has more than doubled, skyrocketing nearly 120% to $106,530.
• The communications services sector leads the way, with two-thirds of executives now receiving security packages, up from less than half just five years ago. Almost every other industry is trending upward too, with the energy sector holding steady.

CEO perks: For CEOs, the safety perks are layered:

• Security perks rose 48% over five years, with about one-third now covered at a median cost of nearly $78,000.
• Air travel perks remain the most common benefit: 52% of CEOs have them, with median spending jumping 77% to $153,000.
• Automotive benefits ticked up slightly in both prevalence and cost.

Other NEOs: 

• While automotive perks are most common for CFOs and other NEOs, their security benefits exploded—up nearly 197% since 2020, now averaging $35,225.

Redefining Duty of Care: Experts note that the greatest modern threat isn’t just physical, it’s also digital. As AI and advanced tools become accessible to “bad actors,” boards are rethinking what duty of care means.

• Boards must benchmark against “reasonably prudent peers,” ensuring protections keep pace, especially in industries and consumer brands with heightened risk profiles.

What Companies Should Do Now

• Proactively scan the landscape: politics, protests, layoffs, and divisive public sentiment all raise risk profiles.
• Plan for flashpoints: major announcements and high-profile events are magnets for disruption.
• Leverage technology thoughtfully: stay ahead of both the tools and emerging threats shaping the new security frontier.

The Bottom Line: Just as companies hedge financial and reputational risks, they must manage physical and digital risks with equal urgency. The Center recently noted to the SEC that these protections are business necessities, not personal benefits and disclosure requirements should be modernized to reflect as such.