Tech Companies Throw Away (Your) Money On Security!
Everyone wants to live in a safe world. That is natural and it is a healthy instinct. However, there is a pretty broad line that separates healthy concern for one’s wellbeing and outright paranoia. Unfortunately, the latest Securities and Exchange Commission documents and Hay Group analysis indicate that the tech sector may be plagued by paranoia. Many large Internet and IT companies are spending exorbitant amounts of money on personal security for executives which, arguably, they do not need.
The Hay Group analysis revealed that over thirteen percent of the surveyed companies paid for personal security for their executives. What is astonishing about this – other than the fact that one company spent almost two million dollars simply to protect their executives – is that the executives in the tech sector have a fear not backed by any credible threat. In searching for data on executives who have been kidnapped, which is the most prominent listed concern for which personal security for executives is utilized, there is astonishingly little outside urban legends to find. In simple terms, executives in the United States are not commonly abducted and held for ransom. Thus, these technology companies like Oracle, Zynga, and Hewlett-Packard are spending millions of dollars to protect executives who are not in any clear or present danger.
Why should you, as a consumer, care? Consumers – and especially stockholders – ought to care because personal security write-offs for executives are an expense we bear. If you purchase a product or service from Hewlett-Packard or Oracle, the cost of that product is higher in order to pay for the security. Investors in Facebook, for example, have a real reason to be concerned. Unnecessary expenses like executive security that the company pays for deflate the profits and lower the value of the company and the stock. Moreover, if the company you are investing in has such an obvious wasteful expenditure, who knows what other corporate waste they have buried in their ledgers?
To be fair, not every tech sector company provides personal security as part of the executive compensation package. Some CEOs and high-ranking executives have to pay for their personal security out of their own pockets. And there are several nations on Earth where kidnappings of politicians and executives do routinely happen. However, the State Department has warnings about travel to each of those nations. It is especially arrogant of executives to laugh in the face of such well-documented danger by traveling to those dangerous places and then sticking their consumers and stockholders with the bill.
There has never been an executive in the tech sector kidnapped and held for ransom in the United States; the closest the tech sector has had to deal with was irate stockholders lobbing pies at Bill Gates almost fifteen years ago. The last executive abducted within the United States was in the financial sector, almost a decade ago and the situation was so quickly resolved that, outside the New York Times, the media barely covered it. In other words, many leaders in the tech sector are unduly afraid and they are making you pay for it!
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