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In a move that made me want to stand up and cheer, Horizon Lines announced that it is eliminating all perks for its four named executive officers. The Compensation Committee of Horizon's board of directors approved the decision as part of a broader, ongoing cost-reduction initiative.
"We believe the perquisite elimination for executive officers is consistent with emerging best practices in corporate governance," said Chuck Raymond, chairman, president and chief executive officer. "In this ongoing challenging business environment, we as senior managers must continue to set new standards that support the organization as it strives for increased efficiencies and customer service excellence."
The eliminated perquisites include, but are not limited to, country club memberships, automobile allowances and tax "gross-up" payments made to reimburse an executive officer for individual income tax incurred with respect to a perquisite.
These officers received base salary increases to partially adjust for the loss, the company reports. Fine, I say. Let all executives earn a wage that is transparent to employees and shareholders. I would love to see all companies follow Horizon's lead and eliminate the many perks that, in my opinion, have contributed to a corporate aristocracy that serves none well.
Kudos to Horizon executives, to James W. Down, head of the compensation committee and to all members of the Horizon board. (Mr. Down resigned, effective Dec. 14, but all parties say his departure is related in no way to the compensation changes.)
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