Costs of Keeping CEOs Safe Differ

Executives from oil and gas companies are subject to kidnapping, according to a report by The Wall Street Journal. Directors of Occidental Petroleum spent $774,756 last year on home-alarm systems and around-the-clock security to keep CEO Ray R. Irani safe.

Valero Energy, which makes four times more revenue than Occidental, spent only $239 for CEO William R. Klesse’s home-alarm monitoring system. The monitoring system was extended to all Valero workers. A spokesman for Valero Energy said that the company isn’t as well-known as Occidental’s Irani.

The disparity in security spending was documented in an analysis of 247 recent proxy statements for the WSJ by James F. Reda & Associates, a New York pay consultancy.

The differences reflect risk assessments by outside security advisers, a CEO's tenure, and whether a company is involved in high-risk regions, according to experts.

The 247 companies represent the Fortune 300 companies that had filed their latest proxies at the time of the analysis. For the most generous boards, "it's almost like an arms race as directors demonstrate how critical their chief executive is to the company," says Mark Borges, a pay consultant at Compensia in San Jose, Calif.