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NEW YORK (CNN) -
For Time Warner CEO Dick Parsons and Disney's outgoing chief Michael Eisner, keeping second homes in Los Angeles and New York for business pays quite well.
According to company filings, Parsons, who received $9.5 million in salary and bonus last year, has also been getting $4,000 a month plus maintenance and utility costs for the Los Angeles apartment he has rented since 2002.
Parsons, according to the company's most recent proxy filing, gets the stipend in lieu of reimbursing him for his hotel business expenses when he is in Los Angeles. To date, Parsons has received close to $175,000 for the Los Angeles apartment, which Time Warner (Research) says he uses from time to time.
"It is a valid business expense to pay the rent for Mr. Parsons' Los Angeles apartment. There are benefits in terms of convenience, security, and keeping business transactions confidential," Time Warner said in a statement. Time Warner is the parent company of CNN and CNN/Money.
Parsons is not the only executive who gets a second-home allowance. Several other top media executives -- including Eisner and Bob Iger at Disney (Research), and Viacom (Research)'s Tom Freston and Leslie Moonves -- have received healthy reimbursements for business travel -- even when they stay in homes they already own or rent.
U.S. corporations have picked up the tab for corporate travel and lodging for their top executives for decades, and there is nothing illegal about it. But tougher scrutiny by regulators, disgruntled investors and corporate watchdogs in recent years has prompted companies to be more transparent about how they compensate their executives. This is the first year that Time Warner and Disney have disclosed such reimbursements.
Iger, Disney's president, and Eisner, its outgoing CEO, are both reimbursed for apartments they have owned or rented when they travel from the company's headquarters in Burbank, Calif., to New York City, according to Disney's proxy filing. Eisner, who was paid $8.25 million in salary and bonus in fiscal 2004, receives $10,000 a month for a New York City apartment. Disney says the $10,000 does not cover the full cost of the apartment.
Eisner also received nearly $735,000 in 2004 for security advice and personal protection services, according to the proxy.
The Wall Street Journal reported Friday that the apartment is in New York City's Pierre Hotel, located on Fifth Avenue in Midtown Manhattan, and that it once belonged to Eisner's mother. Disney declined to comment.
Iger, recently named to be Eisner's replacement as CEO of Disney, was also paid a total of $267,000 during fiscal year 2002 in relocation expenses in connection with his maintenance of an apartment in New York between 2000 and 2002.
At the time, he was in charge of Disney's ABC Television network, which is based in New York City.
Iger was paid more than $8.5 million in 2004, according to Disney.
Regarding why Disney decided to begin disclosing the amount it pays its executives for travel reimbursement, spokeswoman Zenia Mucha issued the following statement: "This disclosure occurred in the interest of following suggested guidelines for best practices."
Viacom's proxy statement to the Securities and Exchange Commission discloses that Co-CEO Moonves, who is based in Los Angeles but owns a home in New York, received an additional $105,000 in 2004 as reimbursement for staying in that home rather than a hotel when in New York on business.
Freston, Viacom's other co-CEO, who is based in New York but owns a home in Los Angeles, got $43,100 for staying in that L.A. home while in that city on business.
Both Freston and Moonves were paid about $20 million in salary and bonuses in 2004, according to company filings. Since their recent promotion, the execs at New York-based Viacom have both declined the perk.
"While those allowances were reasonable and customary given they spend a third of their time traveling and it saved the company money in terms of hotels costs, in the context of their new employee agreements they have decided to give up this legacy benefit even though they had it in their contracts," Viacom spokesman Carl Folta said.
(For more on the Viacom story, click here).
The extra pay was recently criticized by Paul Hodgson, senior research associate at the Corporate Library, a corporate governance group that monitors executive pay. He said he's never seen that kind of supplemental pay listed on a proxy before.
"The very idea that someone earning $20 million should need reimbursement for any cost performing their duties as COO is curious enough," Hodgson told CNN/Money. "That they should be reimbursed (for) living in their own house takes it to a different level of absurdity."
From: CNN's Biz-news Senior Editor, Caleb Silver
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