Featured: Albert Benchimol, CEO, Axis Capital
Originally published: May 25, 2012
Back when Occupy Wall Streeters were gathering in lower Manhattan, one of the common complaints I heard around the camp was that, fresh out of college, it's impossible to get an apartment on what most jobs pay.
This has long been a complaint in a lot of big cities. And in this economy, it's one of the factors hurting job hunters -- who can't always afford to go where the jobs are.
Of course, that's a problem One-Percenters don't have.
Axis Capital ( AXS ) provided a great reminder of this recently when it revealed the contract for new CEO Albert Benchimol, who moved up to the top slot from his job as finance chief in early May.
In addition to receiving more than $20 million in pay -- which is a lot for a chief at a relatively small, $4.4 billion market-cap company -- the incoming CEO also gets a supersweet housing perk: That's a $25,000-a-month housing allowance. And this isn't just any housing subsidy.
Like many other insurance companies, Axis is based in Bermuda. This means Benchimol's housing perk will fund comfy digs on a sunny resort island that many travelers hope to visit just once in a lifetime.
So for getting $300,000 a year -- about six times the average yearly U.S. household income -- for his Bermuda home, we're making Benchimol our "One Percenter of the Week."
The pay breakdown
Most of his $20 million in pay for 2011 was in the form of restricted stock that vests over several years. But judging by the company's history, he'll continue to get $7 million to $9 million a year in new pay, as that restricted stock vests, since this is what his predecessor got.
Benchimol was also given a few other sizable perks, including up to 30 hours of personal use of the company aircraft each year. And he gets his moving expenses from the U.S. paid, as well as moving expenses back to the U.S. after he's done as CEO.
As it turns out, Axis is no stranger to handing out island housing allowances to well-paid execs. Last year, the insurance company gave $765,000 in Bermuda housing allowances to its top four execs, whose allowances ranged from $180,000 to $225,000.
These execs seem to make enough to pay for their own housing. Subsidies went to former CEO John Charman, who the company reports made $7.9 million last year; Chairman Michael Butt, who made $7.4 million; Insurance Chairman John Gressier, who made $3.4 million; and Benchimol, who, as finance chief, made $4.7 million last year.
Axis declined to comment on the record for this report, and no photo of Benchimol was available.
The pay critics
These allowances -- which by definition offer no incentive for execs to work harder, because they get the money regardless of how well the company does -- are no doubt part of the reason Axis gets a "D" for pay-for-performance from Glass, Lewis & Co., which does corporate governance analysis and advises investors on how to vote at annual meetings.
"The company paid more than its peers, but performed moderately worse than its peers," says a Glass, Lewis report on Axis. The report also states that the subpar stock performance in 2011 was due in part to a series of natural disasters and that pay had been aligned with performance in prior years. So it recommended shareholders vote in favor of the company's pay package, which they did.
Since early July 2002 through last week, Axis stock is up 58%, compared with a 36.6% gain for the Standard & Poor's 500 Index ( $INX ) over the same period.
That is some nice outperformance. But even at companies with the best-performing stocks, it's pretty uncommon to see execs get housing allowances worth five or six times what the average family makes in a year -- on top of already huge pay. At Axis, though, it's par for the course.
