Safe and Sound?
With CEO turnover at an all-time high, many boards are amping up perks, particularly in one area: security.
Why Certain Perks Are On the Rise for CEOs
The directors had just concluded the special meeting of the board and sat in silence after learning that their CEO, citing the desire to retire early, was quitting. Their only consolation: Their company wasn’t alone.
For many CEOs these days, the intensity and pressure of the role has translated into holding it for less time. CEO turnover hit an all-time high last year, with 234 chiefs leaving the role—a 16% increase from 2024. While some were forced out for subpar performance or other issues, most weren’t. In their frustration, many boards are hoping to attract or retain leaders using heftier compensation packages. But experts say the real incentives may hinge not on money—but on safety. “Many of our clients have had their security reassessed this year and found they need enhanced measures,” says Irv Becker, vice chairman of executive pay and governance at Korn Ferry.
Indeed, disclosures during this year’s proxy season show an increase in security measures, as well as in personal use of corporate aircrafts. While there’s an overall heightened awareness of security in light of recent threats to executives, compensation experts say such perks are on the rise because they can also help with retention dynamics—and they don’t trigger the same level of shareholder scrutiny that pay does. “They’re a more flexible tool for boards, especially in an environment where CEO pay is under constant pressure,” says Tom McMullen, leader in Korn Ferry’s North America Total Rewards group.
In addition to offering extra security, boards can provide financial planning for complicated taxes or company cars to reduce friction for CEOs. In this way,“ perks are less about attracting CEOs outright and more about quietly reinforcing retention and stability in a competitive leadership market,” McMullen says. Adds Becker: “It’s not like we’re going back to country-club memberships or boxes at sporting events.” Instead, there’s been a significant increase in security measures that can sometimes extend to executives beyond the CEO, such as division heads or the CFO. “We expect personal use of corporate aircrafts to go up significantly in the disclosures coming out this spring,” Becker says.
To be sure, no amount of security or other perks is likely to tip the scales for a CEO deciding to accept a role. Even highly compensated leaders will walk away from a job offer if governance is fractured or expectations are unrealistic. ”Ultimately, CEOs are evaluating whether the role is a winnable bet, with enough reward to match the challenge,” McMullen says.
Learn more about Korn Ferrys Total Rewards expertise.
