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Colgate execs get perks amid job cuts

Colgate-Palmolive Co. said Tuesday it would cut about 12 percent of its 37,000-person work force as part of a four-year restructuring plan for which it anticipates after-tax charges of $550 million to $650 million.
/ Source: Reuters

Colgate-Palmolive Co., which announced Tuesday it is eliminating 4,400 jobs, disclosed in a regulatory filing that many of its top executives and officers are given allowance of up to $11,500 a year to spend on anything from pet sitters to running shoes to karate lessons to movie rentals.

The plan, called “Above and Beyond,” was detailed in the consumer product company’s quarterly filing in November with the Securities and Exchange Commission. The program has been in place since 1986 and covers 800 executives.

Under the plan, executives and officers can ask for reimbursement for exercise equipment, such as rowing or skiing machines, instructional videos, grooming and boarding services for pets, pet walking services and sitters, and veterinarian fees and visits.

Twenty top officers are each eligible for an $11,500 yearly allowance. Between 110 and 120 vice presidents are eligible for $10,000 allowances and 650 executives are eligible for allowances of either $2,000 or $4,000, depending on their rank. Not every eligible executive uses their allowance, the company said.

The Associated Press came across the program while searching SEC filings from thousands of companies for information about compensation for the use of personal trainers and other perks. Few companies detailed programs as extensive as that of Colgate. A story was prepared on Monday, before the corporate restructuring was announced, but the AP held it for a day while waiting for the company’s response.

“Colgate has consistently tried to be fair and very modest in this distribution of any perquisites,” said a company spokesman who asked not to be named. “A total of 800 people in the ’Above and Beyond’ program have access to a modest, fixed stipend that can be used for home computers, baby sitters, fitness training, tax assistance and other benefits that can make their lives somewhat easier.”

The plan replaced previous benefits that were unfairly distributed and, in some cases, excessive, the spokesman said. “This perquisite program, by design, puts Colgate well below the median for perquisite programs among a very large comparative group,” he said.

Colgate, which makes Colgate toothpaste, Softsoap and Ajax cleaner, said it is cutting 12 percent of its work force and closing one third of its factories to improve profits by reducing manufacturing.

The company had $9.9 billion in sales last year and paid its top five executives $23.3 million in cash and stock, plus another $9.1 million in stock options. The company’s highest paid executive, chairman and CEO Reuben Mark, made $10.4 million in salary, bonus and stock awards.

Some other expenses covered by the “Above and Beyond” plan, according to the SEC filing:

  • Equipment and special clothes for fishing, boating, hiking, golf, running and yoga; music, golf, tennis and self-defense lessons; opera, ballet, museum, concert and sporting event tickets for the executive and the executive’s immediate family; movie tickets and video purchases or rentals
  • Membership for tennis, swimming, racquetball clubs or local YMCA-YWCAs and fitness centers. The company will also pay locker fees, court rentals and personal trainer fees.
  • Housekeeping, house painting, snow removal, swimming pool care, landscaping, gutter cleaning and chimney sweeping bills are covered because “routine household chores can consume precious personal and family time,” according to the filing.

“To recognize the long hours spent in the office required by the responsibilities of your position,” the plan covers personally selected artwork and desk accessories for the office, but executives are responsible for insuring those purchases.