Perks Persist, but Cash Is Making a Comeback : Fringes: New tax law has made all those perks less attractive financially, even as corporate egos demand them. More and more, cash is king.

Executive paychecks and stock options may seem fat, but don’t forget executive perks: free tax and legal counseling, corporate jets and limousines, low-interest loans, country club memberships, huge retirement payouts and more.

Take Gap Inc. Chief Executive Millard Drexler, who had to squeak by last year on a mere $1.7 million in salary. But that doesn’t include $300 worth of parking, $500 worth of financial planning, $3,500 in additional insurance, $13,500 in personal travel on the corporate jet and personal use of a company car worth $16,656. His wife even got $1,100 in company-paid travel. These goodies, and substantial stock gains, helped swell Drexler’s compensation package to roughly $8.4 million.

Yet executive perks are on the wane. Looking for ways to close tax loopholes, Congress wiped out provisions that let companies offer goods and services on a tax-deductible basis. A recent study of large companies by the Executive Compensation Service in Ft. Lee, N.J., found that some commonplace perks are being phased out. For example, 15.8% of companies surveyed in 1987 provided full-time drivers for chief executives, but only 11.1% did in 1989.

Only 53.5% of the companies now provide club memberships to their chief executives, compared to 66.1% in 1987; 19.4% provided tickets to the theater or sporting events in 1989, compared to 27% in 1987.

But it’s not a total loss for executives. While giving up perks, they’re increasingly getting cash.

“It used to be that perks were tax-effective. Financial counseling for executives was a deductible business expense, for example,” said Gary Hourihan, president of Strategic Compensation Associates in Los Angeles. “But many of those tax benefits have gone away, so companies are beginning to replace executive perquisites with equivalent cash payments.”

Still, perks are pervasive. Often, executives get company-paid services worth substantially more than the average worker’s annual pay. Some of the most noteworthy “other” payments for California’s 100 highest-compensated executives:

* Over a three-year period, Occidental Petroleum Corp. reimbursed President Ray R. Irani a total of $970,280 for financial counseling and state income-tax expenditures. The company also paid $111,456 for relocation expenses beyond what company policy normally allows. Occidental contributed $34,960 to Irani’s savings plan and $20,079 to his supplemental retirement plan over the three years. Overall, Irani’s “other” compensation has been worth an average of $378,925 annually the past three years.

* John P. Munson, president of Syntex Pharmaceuticals, a subsidiary of Syntex Corp. in Palo Alto, got $127,600 in cost-of-living expenses, housing and other allowances--in addition to his $380,883 annual salary last year--to compensate him for being on overseas assignment.

* Several executives at Fleetwood Enterprises, a Riverside-based recreational vehicle company, got six-digit payments to their retirement and supplemental-benefits plans. For Chief Executive John C. Crean, who earned a $770,098 salary, the payment amounted to $158,116; President Glenn F. Kummer got $139,698 in addition to his $675,711 salary, and Senior Vice President Elden L. Smith topped his $554,981 salary with a $104,548 “other” payment.

* Litton Industries, a Beverly Hills-based conglomerate, lends money to its executive officers at below-market rates. Orion Hoch, who earns $1.1 million annually, pays only 6% interest on a $964,920 loan. Other senior Litton officers have 4% loans.

Other companies, such as Emeryville, Calif.-based Cetus Corp. and Acuson Corp. of Mountain View, Calif., also occasionally lend money to their top officers at below-market rates. In fact, Acuson plans to “forgive” over a seven-year period its $500,000 loan to Vice President John Freund--and pay $266,000 in taxes that will be assessed against Freund as a result.

Los Angeles-based First Interstate Bancorp provides top executives with cars, supplemental life insurance and savings plans, club memberships, financial planning and tax preparation, as well as free physical examinations, stock options and stock grants.

Great Western Bank, based in Beverly Hills, reimburses for health and dental costs in excess of its ordinary health coverage. It also gives low-interest loans, cars and tax and financial planning. Chief Executive James Montgomery got to use the company plane.

Compensation experts acknowledge the irony of providing free benefits to the group best able to afford them. But, like many other elements of executive compensation, perks are a competitive issue that got out of hand, said Fred Whittlesey, senior manager at KPMG Peat Marwick’s Los Angeles compensation-consulting group.

“Perks have become status- and recognition-driven,” Whittlesey said. “If your two biggest competitors are taking the company helicopter to work, there’s a tendency for you to think maybe you should be, too.”