David Letterman’s recent on-air admission that he had carried on affairs with employees and as a result, subjected to an extortion attempt is not the first problem he’s had with his inner circle. On several occasions, insiders have caused problems for Letterman, bringing his private life into the spotlight.

In 2005, a man working as a painter on Letterman’s ranch in Montana plotted to kidnap his son. In that case, a thorough background investigation of temporary staff may have revealed that the man was already under state supervision for a previous crime. Years earlier, Letterman was targeted by a stalker, Margaret Ray, who called herself “Mrs. Letterman” and broke into Letterman’s house on a number of occasions.

In the current case, Stephanie Birkitt, Letterman’s mistress, had recently lived with Robert Halderman, the man who attempted to extort Letterman, and who also happens to be a longtime, Emmy-winning CBS journalist on the true-crime series 48 Hours. Letterman has a reputation of guarding his privacy tightly and keeping a close inner circle, but he serves as an example of how difficult it can be for prominent public figures to protect their privacy and keep out of the headlines. Whether a more rigorous background screening process for insiders would have kept his privacy intact in any of these cases is uncertain; it’s simply not reasonable to every vet employees’ significant others or screen every single transient worker.

Either through bad judgment or bad fortune, or both, Letterman demonstrates how personal information and knowledge in the wrong hands can be extremely damaging; sadly, he also demonstrates how difficult it can be to properly protect that information.

Don’t Become the Next Erin Andrews: Tips for a Safe Hotel Stay

A Few Simple Steps Can Make Your Next Hotel Stay a lot Safer

By SCOTT MAYEROWITZ

October 6, 2009

Hotels often offer a sense of security and comfort when on the road, but when ESPN reporter Erin Andrews checked into the Nashville Marriott at Vanderbilt University last September, that was the last thing she got.

Insurance salesman Michael David Barrett allegedly traveled from his home outside Chicago to Nashville and specifically requested — and got — a room next to the sportscaster at the Nashville Marriott, according to court documents. He then allegedly used a cell phone to record video of Andrews changing while in her room.

It apparently wasn’t the first time Barrett learned the specific hotel Andrews was staying in and recorded her. According to a 35-page criminal complaint filed in a California federal court, in July 2008 he called 14 Milwaukee area hotels until he learned that Andrews would be at the Radisson Airport Hotel. He allegedly got a room there, altered a peephole in Andrews’ room and then proceeded to record her.

Other Celebs Victimized

Andrews is hardly the first well-known person to have a guest stalk her or try to steal items from a hotel room.

In March, a homeless man tried to force his way into actor Jamie Foxx’s room at the AKA Rittenhouse Square hotel in Philadelphia. He allegedly first attempted to get into the hotel by claiming that he was singer Beyonce Knowles’ producer.

In 2003, rapper Nelly had more than $1 million in jewelry stolen from his room at the then Aladdin hotel-casino on the Las Vegas strip. Singer Michelle Branch, who also was staying at the Aladdin for an awards show, reported that computer equipment was stolen from her room.

And while the ease Barrett apparently had in pinpointing Andrews’ hotel and actually getting a room next to Andrews might seem shocking, several security experts said it came as no surprise to them.

Erin Andrews Video Incident Avoidable?

Christopher Falkenberg, a former special agent with the U.S. Secret Service and now president of Insite Security, said getting such information is easy.

“What I suspect happened: He called around and found out where she was staying and said, ‘Oh what room is she in, can I have the room next to her?’ Or said something like: ‘I’m with her party therefore I want to be next to her,’” Falkenberg said.

Computer records of Barrett’s reservation state at the Nashville Marriott, according to the court documents include a line: “INFO GST RQST RM NEXT TO [Andrews.]“

Stephen P. Davis, a former New York City Police Department captain and now head of Davis Investigative Group, said that when an unaffiliated party requests an adjacent room, “That should have set off a question as to why are you asking.”

Davis said the hotel industry is now likely to revisit its security procedures in the reservation process.

The Nashville Marriott — which is not owned or managed by Marriott international — refused comment, instead referring questions to Marriott’s corporate headquarters.

“Our company takes the security and privacy of its guests seriously and we have been cooperating with authorities during the investigation,” John Wolf, Marriott International’s senior director of public relations said in an e-mail to ABC News.

Radisson said in a statement that: “Guess privacy and security are top priorities for Radisson Hotels and Resorts. The property involved in this alleged incident was a franchised hotel which left the Radisson system in September, 2008. As this issue is currently part of a criminal trial, we are unable to provide additional comment at this time.”

The general manager at the hotel, now the Ramada Conference Center Hotel at the Milwaukee Airport, did not return calls seeking comment.

Simple Safety Steps

Most hotel guests probably aren’t going to have people following them on vacation. But even non-celebrities can take a few simple steps to protect themselves and their belongings on a trip.

Joseph A. McInerney, president and CEO of the American Hotel & Lodging Association, said that the industry probably isn’t going to be able to stop people from calling around to hotels to see if somebody has checked in. Most times, you are going to want such calls to go through to your room.

But he said hotels should not be honoring requests to stay next to certain guests unless they know of a connection.

“There’s no reason to do that,” McInerney said.

Hotel Safety Tips for Celebrities Work for Everyone

Guests should always use a chain lock, in addition to the deadbolt, to lock the door and protect the hotel room from people who might have master keys. Security experts advise using that extra lock at all times in the room, even when sleeping.

McInerney also said that if you ever question the identity of somebody knocking on your door, call down to the front desk.

But overall, he said, hotels are safe places to stay.

“In light of this incident, people should feel very comfortable in hotels. The guests and the employee safety is the number one priority of hotels and hotel companies,” McInerney said. “We don’t know all the allegations on this and what might have broken down, but we have roughly a million-and-a-half people every night staying at hotels. The incident level might be very, very, very minuscule.”

Camera Recording Equipment Easy to Find

Safety starts in the lobby. When checking in, make sure that the front-desk clerk doesn’t announce your room number.

“The lobby itself is a great place to commit a crime but is also a place where it’s difficult to have your normal antenna up to be sensitive to crime,” Falkenberg said. “Be really aware of people who are around you. You don’t want other people in the lobby finding out what room you are in.”

Just with that little bit of information, somebody could use a lobby phone, call your room and say the management is about to bring up a welcome gift, then knock on your door minutes later and have a gun in your face.

Today, stalkers can easily buy all sorts of tiny cameras and listening devices Falkenberg said.

For his corporate clients or celebrities worried about spying he suggests switching hotels or at least switching rooms frequently. For high-target clients, his staff will often book the adjacent room for added security. Never stay in rooms with connecting doors unless you know the person in that room, he suggested.

“The Erin Andrews case is an example of how easy it is to pull off crimes that previously had been in the era of James Bond,” Falkenberg said. “It’s not as though Barrett had access to NSA level equipment. He didn’t. You can buy a large variety of items on the Internet. They’re very, very small.”

Stay on Higher Floors, and Carry a Flashlight

Davis, of Davis Investigative Group, said guests should also take precautions against hotel staff. Many hotel employees have pass keys that give them access to any room. The use of those keys can be traced, but that is often too late.

Consider the recent case of a housekeeping manager at the upscale Jumeirah Essex House hotel in New York who allegedly tried to rape an investment executive as she slept, and then stabbed and strangled her when she apparently fought back.

Davis said that somebody trying to break down a hotel door in a hallway is probably going to be noticed. But if it is an adjoining room, they have all the time and the privacy in the world.

When traveling overseas, Falkenberg said guests should worry about something else: hotel design.

International building codes and fire standards are not the same as in the United States. Try to pick a modern hotel with sprinklers. He said it’s better to be high enough off the ground that people can’t easily break in but not so high that fire truck ladders can’t reach you.

Finally, he said, always carry a flashlight.

Countering Threats: Insite Security shields its clients against kidnappers and other criminals who prey on the wealthy.

BUSINESS MANAGEMENT – PRACTICE DEVELOPMENT

SEPTEMBER / OCTOBER 2009

By CAREN CHESLER

It remains one of the most horrific kidnappings in history. In April 1992, Exxon executive Sidney Reso was kidnapped in his own driveway in wealthy Morris Township, N.J. Bound and gagged, he was put in a six-by-three-and-a-half foot wooden box, which was left in a metal storage room without ventilation or electricity. The 57-year-old father of five was left there for four days, lying in his own waste and given little more than water and vitamins. On the fifth day, his kidnappers returned to find him dead. Yet they continued to demand $18.5 million in ransom for eight weeks before finally being apprehended.

Reso wasn’t the first wealthy executive to be abducted and he certainly won’t be the last, which is why some of the country’s wealthiest families have hired New York City-based Insite Security Inc.

The firm’s CEO, Chris Falkenberg, a former Secret Service agent and litigator, counts celebrities, such as Martha Stewart and Ralph Lauren, as well as movie stars and hedge fund managers among his clients. The firm has so many clients in hedge-fund heavy Connecticut, it opened a four-person office in Greenwich. Falkenberg founded the firm in 2002.

“I think the most important thing we do is prevent kidnappings and respond to them,” Falkenberg says. “It is the number one threat because it is exactly the type of crime focused against our client base. Our clients have an enormous amount of money and, therefore, they are attractive to kidnappers.”

His firm, which employs law enforcement veterans who formerly worked for the Secret Service, the Federal Bureau of Investigation and the U.S. Marshals Service, as well as several police departments, has about a dozen clients for which it provides security services on a retainer basis.Monthly fees range from $8,000 to $12,000. The firm also performs discreet services, such as installing home security systems, which could cost $40,000 to $60,000.

The range of services Insite provides varies, depending on the client’s level of risk. An executive with a company that does animal testing or sells fur, for instance, faces a higher risk, as do executives who have received a lot of publicity because of their wealth or been involved in a high-profile termination of an employee, according to Falkenberg.

Kidnapping, however, is a threat to anyone with a lot of wealth. Kidnappings are on the rise internationally, experts say, partly due to organized crime activity in countries such as Brazil and Russia, and the drug trade run out of countries such as Mexico, where kidnapping has become a lucrative criminal activity. That’s made border states like Arizona, Texas and California greater security risks, says Falkenberg.

Apparently, Connecticut has its risks as well. In 2003, billionaire hedge fund manager Eddie Lampert was kidnapped at gunpoint while leaving work. Several ex-convicts found Lampert, who at the time owned the $9 billion private investment fund ESL Investments Inc., by going into the prison law library in jail and typing in “richest guy in Connecticut,” Falkenberg says. They nabbed him at work after seeing that he went in every Saturday and parked in the same spot that had his name on it. He was held for ransom for two days before talking his way out of it.

Falkenberg feels one of the benefits his firm brings to clients is the ability to respond to such situations on a moment’s notice. Law enforcement agencies, in contrast, may not act with urgency until they’ve established whether a kidnapping has occurred, he says.

To help prepare for kidnapping situations, Falkenberg recently hired the FBI’s former lead hostage negotiator, Christopher Voss. Experts say the first 24 hours of a kidnapping are considered the most crucial, in terms of keeping the victim alive, Falkenberg notes. The presence of Voss will assist the firm when it needs to act quickly, he adds.

“Given that so many of our clients are U.S.-based, and so many [domestic] kidnappings result in homicides, we just can’t not have that capability in house,” Falkenberg says.

Voss says kidnappings are like Russian roulette. Most of the time, victims are unharmed. But when something does go wrong, the results can be disastrous. In the U.S., he feels victims face heightened risk because kidnappers are more concerned about covering up their tracks.

“In the U.S., we have an extremely robust law enforcement community, and kidnappers are afraid they’re going to get caught. And they’re not only going to get caught they’re going to do an extremely long time in jail,” Voss says. “Outside the U.S., they’re pretty sure they won’t get caught.”

The firm hasn’t yet had to deal with a kidnapping, but Falkenberg believes it may have prevented one. He had a client in New York whose child may have been a potential target. According to school officials, a man was asking questions about the client’s child. But once Falkenberg’s firm put the man under surveillance, he disappeared.

“There can always be an innocuous excuse for behavior, but we didn’t think that was the case here. So we increased security, and the surveillance ended,” Falkenberg says. “One of the frustrating things about selling these services is that, unlike an investment advisor, we can’t prove a negative.”

Aside from kidnapping, the biggest issues clients face are home invasions and confidence games perpetrated by the people around them, Falkenberg says. For example, the firm had two ultra-wealthy clients whose college-aged sons were preyed upon by women who wanted their money. The parents had grown suspicious of the women, but their sons, who were so flattered by the women’s interest, refused to end the relationships.

Falkenberg’s firm discovered that both women had created a web of lies, about their identities, their college majors, and various other basic facts. The men ultimately terminated the relationships.

The women likely found the men in one of the college yearbooks created for entering freshmen, Falkenberg says. In general, he says, the less information that’s available about his clients, the safer they are.

“These days, there’s so much information out there about people, specifically the wealthy, that it creates security issues for them,” Falkenberg says. “Even if they make huge efforts not to draw attention to themselves, like those who vociferously guard their privacy and don’t talk to the media or take credit for their charitable foundations, they still end up in media reports on the very, very wealthy, like the Forbes list.” Some of the biggest breaches in security occur when people voluntarily give up information, he notes.

Falkenberg, who served on the security detail for the first President George Bush and then for President Bill Clinton during his 1992 presidential campaign, recommends that the wealthy keep public information about themselves vague, business-oriented and impersonal. The wealthy should be guarded about where they live, whom they know and what they do for hobbies, he says. The firm also does thorough background checks on anyone working for his clients, from nannies to landscapers.

Many of his clients, particularly hedge fund managers who have acquired enormous amounts of wealth early in life, find they and their children are living in a bubble. One of the firm’s challenges is allowing clients to live somewhat normal lives while looking out for their security.

“They’ll have a security infrastructure, but they don’t want to see or have to worry about it,” Falkenberg says. “It’s not so easy to do that.”

What makes it even harder is when clients are resistant to his security efforts. He once had an interior designer balk at the prospect of putting smoke detectors on the ceilings of each room, suggesting instead that they be put in closets. The wife of one of his clients asked that the unsightly surveillance cameras in the backyard be tucked away so far into the bushes that it rendered them useless.

The most resistant family members, he says, are children, who are warned not to put intimate details on social networks such as Facebook and MySpace. Many simply refuse to comply.

Risks don’t just occur at home, he notes. The ultra-wealthy have to be careful, perhaps even more careful, when they travel.

“When you show up and get off a Global Explorer – a $15 million private jet – people look at you differently,” he says. What predators see, he says, is opportunity.

Falkenberg had a client whose five-member family was traveling through one of the former Soviet republics 18 months ago and was detained at an airport by border officials who were apparently looking for a payoff. After six hours of detention, Falkenberg says the family was freed after his firm “negotiated” with the officials.

“We used contacts we developed in advance of the trip,” Falkenberg says, adding, “And maybe there was some payment of compensation to someone. And maybe not.”

Falkenberg says he’s seen an increase in requests for security services related to overseas tourism and business travel. It’s not surprising. Security experts say Americans traveling internationally face increased risks today to not just their safety but also their health. For that reason, Falkenberg’s firm recently partnered with a company called WorldClinic to provide emergency medical care to its clients. With a network of 4,000 doctors outside the U.S., WorldClinic provides around-the-clock medical care to clients who suffer serious illness or injury while traveling abroad.

Falkenberg believes people should hope for the best and prepare for the worst. Anne G. Donohoe, who works for Falkenberg’s public relations firm, KCSA Strategic Communications, can vouch for that. She was recently preparing for a trip to the Tuscany region of Italy when she received a call from Falkenberg, who told her to become acquainted with the plane’s exit routes and to wear sneakers on the flight, in case she has to run. He told her not to take the sneakers off until the plane is at cruising altitude, and because she was staying in a 200-year-old villa, he warned her to locate all of the exits in the building in case there was a fire.

“I told him, ‘You’re scaring me.’ And he said, ‘Great. Have a nice trip,’” Donohoe says. “Now when I travel, I keep a flashlight on me, in case there’s a power outage.”

The attack on Silvio Berlusconi reveals some weakness in Carabinieri security. First is the importance of distance. Distance equals time in an attack, and there wasn’t much distance between Berlusconi and the attacker on the rope line where he was accosted.

A more important issue is the crowding around the car and the apparent difficulty of getting the protectee into the car safely. A number of questions come to mind—was this an impromptu event? Was any security advance conducted? Was there any screening of the people in the rope-line area waiting to shake hands?

Assuming the statuette that was used as a weapon was non-metallic, it is possible that a screening process would have detected the assailant by sensing his affect. Media reports indicate the subject is mentally ill—were there signs of this illness that could have been observed by an attentive screener? How would the subject have responded to a question about his mood, his reason for being there or his attitude towards the prime minister?

I think the lesson is that effective security is concentric and redundant, relying on anticipation of emergencies and multiple layers of preparation and protection in order to prevent them.

For more than 4 years I was one of the most highly trained personal body guards in the world. Serving as a United States Secret Service Special Agent. It was our job to ensure that the President of the United States (POTUS) was protected from any and all physical threats.

When I was guarding President Clinton it would have been crazy for him to carry a weapon on his person, or to have an untrained member of his inner circle carry a gun. The President of the United States is arguably the most valuable individual in the entire world, and his employer, the Government of the United States, is mandated to protect this highly-valued, very public, employee and not leave it up to him to protect himself.

Reading the stories about Gilbert Arenas carrying multiple firearms into his workplace or remembering back to the Plaxico Burress incident where he accidentally shot himself at a night club, it struck me as insane that the owners of NFL, MLB or NBA teams do not, as a matter or course, provide highly professional protection services to their players when off the court/field. Owners spend tens if not hundreds of millions on their players each year and do a fabulous job of protecting their athletes (investments) and fans at sports stadiums and fields, but once their players leave “the office” the teams cease to provide protection.

Sure most teams have training seminars for athletes on how to protect themselves, their loved ones and property. But, for the most part, teams leave it up to the athletes to protect themselves. How many do this is either through hiring personal “body guards” from their close knit group of untrained friends or by buying and carrying a weapon (usually legally). These posse-based security solutions rarely solve the problem. A security professional is trained to help avoid dangerous situations, to diffuse conflicts and to keep their protectees away from danger. Having your best friend from home carry a Glock is a recipe for trouble.

Exxon/Mobile provides 24-hour security for its CEO, Rex Tillerson, why wouldn’t the New York Giants provide the same type of security for Plaxico, or the Washington Wizards for Arenas?

CEO security-tabs fall at Google, FedEx and Disney

Starbucks pays more to protect CEO Howard Schultz

By Matt Andrejczak, MarketWatch April 12, 2010, 2:34 p.m. EDT

SAN FRANCISCO (MarketWatch) — Executives at Kodak and Deere are now paying for their own home-security systems, a sign that executive-security is one perk corporate board’s are scrutinizing more closely.

Indeed, other companies cut back on security expenses, too — especially those known to spend big bucks on protecting their CEO, according to a MarketWatch review of proxy statements filed so far this year by Dow 30 components and larger S&P 500 companies.

The security tab for Google CEO Eric Schmidt fell 42% to $233,542 last year. The bill for FedEx CEO Fred Smith dropped 23% to $461,405, while the cost for Disney CEO Bob Iger dipped 9% to $589,102.

Since 2007, Google (NASDAQ:GOOG) has paid $1.1 million in personal security expenses for Schmidt, FedEx (NYSE:FDX) has paid $1.5 million for Smith, and Disney (NYSE:DIS) has paid $1.9 million for Iger.

Compensation consultant Todd Gershkowitz of Farient Advisors said CEO security is not an egregious perk compared to goodies like country-club memberships, chauffeurs or taxes companies pay on super-sized severance packages for axed CEOs.

But company-provided security “becomes an invasion of privacy, some CEOs don’t want it, some accept it,” said Gershkowitz, who considers CEO security expenditures more of an issue about risk than one of executive perks handed out by directors.

He said he’d like to see more detailed disclosures about CEO security in proxies.

Deere (NYSE:DE) and Kodak (NYSE:EK) won’t pay the bill for residential security anymore, according to their yearly proxy statements filed with the Securities and Exchange Commission.

Starting this year, Deere said eight executives will have to reimburse the company for security services that had included “drive-by surveillance and response to security alarms” for certain executives by Deere’s corporate security staff.

This perk cost Deere less than $19,000 last year, but the exact number is unknown since the tractor maker lumped the cost in with spouses attending company events.

Kodak paid a one-month bill of $876 for five executives, before dropping the perk in February 2009. Long-struggling Kodak, which lost $210 million last year, will still pick up the tab for CEO Antonio Perez, however.

At Citigroup (NYSE:C) , the bank won’t be paying for personal bodyguards and armored vehicles for Roberto Hernandez Ramirez, a Mexican-based banking executive who stepped off Citi’s board last spring. Since 2007, Citi had paid $5.4 million for his security, office space and airplane use.

The emphasis corporate boards put on CEO security expenses can vary vastly depending on their culture. IBM (NYSE:IBM) , Dupont (NYSE:DD) and Procter & Gamble (NYSE:PG) require their CEOs to use the corporate jet even for personal travel.

Compare that to UPS (NYSE:UPS) . UPS CEO Scott Davis and other top execs fly commercial when traveling for business.

Terry Lundgren, CEO at Macy’s (NYSE:M) , is provided a car and driver to shuttle him around New York City. That cost more than $261,000 in 2009. Intel (NASDAQ:INTC) CEO Paul Otellini drives himself to work from his San Francisco home to Silicon Valley when he is in town.

Since proxies from S&P 500 companies are still trickling out, it’s too early to determine if the nation’s 500 largest companies cut CEO security perks as they slashed other operating costs during the so-called Great Recession.

CEO security tabs had been on the rise from 2006 through 2008 at Fortune 100 companies, according to Equilar, an executive compensation research firm.

The security tab for Starbucks CEO Howard Schultz has climbed in each of the past three years. It rose 25% to $640,000 in 2009 due to “increased personal security details” and upgrades to Schultz’s residential security systems.

Coke (NYSE:KO) paid more to protect Jose Octavio Reyes, its top executive in Mexico, where drug violence worsened last year. His security bill, which comes with bodyguards and 24-hour residential security, rose 36% to $488,719.

SEC disclosure rules changed in 2007, forcing companies to illuminate perks valued over $10,000. Before then, companies used studies from boutique security firms to justify the costs as business expenses for federal tax reporting purposes.

The costs to hire bodyguards or armored vehicles, or install home-security systems, pop up in proxy statements of publicly-traded companies, revealing what companies are willing to pay to keep the CEO and their families safe. The SEC deems such costs a perk and the tab is part of the “all other compensation” column in executive compensation tables.

For a larger home, the cost to install a home security system runs from $7,000 to $10,000 and typically includes fire alarms, smoke detectors and sprinkler systems, according to Tim McKinney, group director of the custom home unit at ADT, the home-security firm.

That compares to the set-up cost of $400 to $600 for a regular home, McKinney said.

Executive security is not limited to CEOs of public companies.

Hedge fund managers are concerned, too, said former U.S. Secret Service agent Christopher Falkenberg, whose firm Insite Security has set up an office in Greenwich, Conn., the New York City suburb that is home base for many hedge funds.

Falkenberg, who once protected President Bill Clinton, said he’s been developing family security plans for the spouses and children of hedge fund managers. The aim is to make their families harder targets to would-be criminals.

3M (NYSE:MMM) and Caterpillar (NYSE:CAT) got a scare last year when factory bosses in France were held hostage by laid-off workers who demanded higher severance pay outs.

During the recession, Jeff Sexton, a former United Nations security adviser, said his firm was hired to ensure the safety of human-resource managers and other executives when manufacturing or corporate office workers were about to be laid off.

In some cases, he said, the factories were in small towns and the company was the biggest employer, making it a delicate situation. “It can be really trying and emotional time,” said Sexton, who runs Fairfax, Va.-based Sexton Executive Security.

Starbucks (NASDAQ:SBUX) , which closed 1,000 stores during the economic downturn, has run up a security-tab of $1.6 million for Schultz since 2007.

The coffee giant pays the bill because of the risks associated with his status as a “high-profile founder” of a large, multinational company, the coffee chain said in its proxy.

Schultz “is closely identified with Starbucks brand and the board firmly believes his vision and leadership are critical components of Starbucks success,” the proxy added.

The same could be argued for Apple CEO Steve Jobs. But Apple (NASDAQ:AAPL) lists no security costs for Jobs in its proxy statement. The company couldn’t be reached for comment. Recently, Jobs stopped by Apple’s Palo Alto, Calif. store with his wife and daughter the day the much ballyhooed iPad went on sale.

Microsoft (NASDAQ:MSFT) doesn’t list any security costs for CEO Steve Ballmer, either. The software giant has had at least one incident of note: Former CEO Bill Gates got hit in the face by a cream pie during a 1998 visit with European Union antitrust officials.

Oracle CEO Larry Ellison and Dell CEO Michael Dell are among the most-protected U.S. tech executives — at least according to security costs listed in regulatory filings.

In the past three years, Oracle has paid $4.6 million for a residential security program that includes security guards at Ellison’s residence. Dell (NASDAQ:DELL) has paid $3.2 million for bodyguards and home-security for its founder. Dell is known to send advance security detail teams to scout out certain locations where the CEO will be.

The boards of both tech companies call it an appropriate business expense. Ellison owns 23% of Oracle (NASDAQ:ORCL) . Dell owns 13% of his namesake personal computer maker.

As part of an executive severance agreement, Whirlpool (NYSE:WHR) is still on the hook to the pay for the cost of a car and driver for Paulo Periquito, its former head of Latin America who lives in Brazil. He resigned at the end of 2009 and he keeps the car and driver through April 2012, according to a regulatory filing.

The cost of the car and driver was $104,352 in 2009.

Here are some other examples found in recent proxy statements:

• 3M ponied up $35,864 to “complete several projects improving the personal security” of its CEO George Buckley and his family “at their residences.” That paid for monitoring service fees, installation services and materials.

• Former Schering-Plough CEO Fred Hassan was protected with personal bodyguards, home-security system, and a car and driver. The drug maker explained that its executives had received threats from animal rights activists and others because of the products it sells. Since 2006, Schering-Plough had paid $442,196 for those services. Hassan stepped down from Schering-Plough after its merger with Merck (NYSE:MRK) in November 2009.

• Ford Motor Co. (NYSE:F) paid $1.2 million in security costs for its executive chairman Bill Ford, Jr. last year. In 2008, this expense was not listed because Ford (the great-grandson of Henry Ford) didn’t meet the definition of “named executive” under SEC rules. Meanwhile, home-security expenses for CEO Alan Mulally were $43,447, down from $112,114 in 2008.

• Inter-Con Security Systems does work for some Fortune 100 companies, including Wal-Mart Stores (NYSE:WMT) and McDonald’s (NYSE:MCD) . Inter-Con CEO Enrique Hernandez, Jr. also is popular with corporate boards. He is a director at Chevron (NYSE:CVX) , Wells Fargo (NYSE:WFC) , McDonald’s, and Nordstrom (NYSE:JWN).

Copyright © 2010 MarketWatch, Inc. All rights reserved. http://www.marketwatch.com/story/ceo-security-tabs-fall-at-google-fedex-and-disney-2010-04-12

Starbucks pays more to protect CEO Howard Schultz

SAN FRANCISCO (MarketWatch) — Executives at Kodak and Deere are now paying for their own home-security systems, a sign that executive-security is one perk corporate board’s are scrutinizing more closely.

Indeed, other companies cut back on security expenses, too — especially those known to spend big bucks on protecting their CEO, according to a MarketWatch review of proxy statements filed so far this year by Dow 30 components and larger S&P 500 companies.

The security tab for Google CEO Eric Schmidt fell 42% to $233,542 last year. The bill for FedEx CEO Fred Smith dropped 23% to $461,405, while the cost for Disney CEO Bob Iger dipped 9% to $589,102.

Since 2007, Google (NASDAQ:GOOG) has paid $1.1 million in personal security expenses for Schmidt, FedEx (NYSE:FDX) has paid $1.5 million for Smith, and Disney (NYSE:DIS) has paid $1.9 million for Iger.

Compensation consultant Todd Gershkowitz of Farient Advisors said CEO security is not an egregious perk compared to goodies like country-club memberships, chauffeurs or taxes companies pay on super-sized severance packages for axed CEOs.

But company-provided security “becomes an invasion of privacy, some CEOs don’t want it, some accept it,” said Gershkowitz, who considers CEO security expenditures more of an issue about risk than one of executive perks handed out by directors.

He said he’d like to see more detailed disclosures about CEO security in proxies.

Deere (NYSE:DE) and Kodak (NYSE:EK) won’t pay the bill for residential security anymore, according to their yearly proxy statements filed with the Securities and Exchange Commission.

Starting this year, Deere said eight executives will have to reimburse the company for security services that had included “drive-by surveillance and response to security alarms” for certain executives by Deere’s corporate security staff.

This perk cost Deere less than $19,000 last year, but the exact number is unknown since the tractor maker lumped the cost in with spouses attending company events.

Kodak paid a one-month bill of $876 for five executives, before dropping the perk in February 2009. Long-struggling Kodak, which lost $210 million last year, will still pick up the tab for CEO Antonio Perez, however.

At Citigroup (NYSE:C) , the bank won’t be paying for personal bodyguards and armored vehicles for Roberto Hernandez Ramirez, a Mexican-based banking executive who stepped off Citi’s board last spring. Since 2007, Citi had paid $5.4 million for his security, office space and airplane use.

The emphasis corporate boards put on CEO security expenses can vary vastly depending on their culture. IBM (NYSE:IBM) , Dupont (NYSE:DD) and Procter & Gamble (NYSE:PG) require their CEOs to use the corporate jet even for personal travel.

Compare that to UPS (NYSE:UPS) . UPS CEO Scott Davis and other top execs fly commercial when traveling for business.

Terry Lundgren, CEO at Macy’s (NYSE:M) , is provided a car and driver to shuttle him around New York City. That cost more than $261,000 in 2009. Intel (NASDAQ:INTC) CEO Paul Otellini drives himself to work from his San Francisco home to Silicon Valley when he is in town.

Since proxies from S&P 500 companies are still trickling out, it’s too early to determine if the nation’s 500 largest companies cut CEO security perks as they slashed other operating costs during the so-called Great Recession.

CEO security tabs had been on the rise from 2006 through 2008 at Fortune 100 companies, according to Equilar, an executive compensation research firm.

The security tab for Starbucks CEO Howard Schultz has climbed in each of the past three years. It rose 25% to $640,000 in 2009 due to “increased personal security details” and upgrades to Schultz’s residential security systems.

Coke (NYSE:KO) paid more to protect Jose Octavio Reyes, its top executive in Mexico, where drug violence worsened last year. His security bill, which comes with bodyguards and 24-hour residential security, rose 36% to $488,719.

SEC disclosure rules changed in 2007, forcing companies to illuminate perks valued over $10,000. Before then, companies used studies from boutique security firms to justify the costs as business expenses for federal tax reporting purposes.

The costs to hire bodyguards or armored vehicles, or install home-security systems, pop up in proxy statements of publicly-traded companies, revealing what companies are willing to pay to keep the CEO and their families safe. The SEC deems such costs a perk and the tab is part of the “all other compensation” column in executive compensation tables.

For a larger home, the cost to install a home security system runs from $7,000 to $10,000 and typically includes fire alarms, smoke detectors and sprinkler systems, according to Tim McKinney, group director of the custom home unit at ADT, the home-security firm.

That compares to the set-up cost of $400 to $600 for a regular home, McKinney said.

Executive security is not limited to CEOs of public companies.

Hedge fund managers are concerned, too, said former U.S. Secret Service agent Christopher Falkenberg, whose firm Insite Security has set up an office in Greenwich, Conn., the New York City suburb that is home base for many hedge funds.

Falkenberg, who once protected President Bill Clinton, said he’s been developing family security plans for the spouses and children of hedge fund managers. The aim is to make their families harder targets to would-be criminals.

3M (NYSE:MMM) and Caterpillar (NYSE:CAT) got a scare last year when factory bosses in France were held hostage by laid-off workers who demanded higher severance pay outs.

During the recession, Jeff Sexton, a former United Nations security adviser, said his firm was hired to ensure the safety of human-resource managers and other executives when manufacturing or corporate office workers were about to be laid off.

In some cases, he said, the factories were in small towns and the company was the biggest employer, making it a delicate situation. “It can be really trying and emotional time,” said Sexton, who runs Fairfax, Va.-based Sexton Executive Security.

Starbucks (NASDAQ:SBUX) , which closed 1,000 stores during the economic downturn, has run up a security-tab of $1.6 million for Schultz since 2007.

The coffee giant pays the bill because of the risks associated with his status as a “high-profile founder” of a large, multinational company, the coffee chain said in its proxy.

Schultz “is closely identified with Starbucks brand and the board firmly believes his vision and leadership are critical components of Starbucks success,” the proxy added.

The same could be argued for Apple CEO Steve Jobs. But Apple (NASDAQ:AAPL) lists no security costs for Jobs in its proxy statement. The company couldn’t be reached for comment. Recently, Jobs stopped by Apple’s Palo Alto, Calif. store with his wife and daughter the day the much ballyhooed iPad went on sale.

Microsoft (NASDAQ:MSFT) doesn’t list any security costs for CEO Steve Ballmer, either. The software giant has had at least one incident of note: Former CEO Bill Gates got hit in the face by a cream pie during a 1998 visit with European Union antitrust officials.

Oracle CEO Larry Ellison and Dell CEO Michael Dell are among the most-protected U.S. tech executives — at least according to security costs listed in regulatory filings.

In the past three years, Oracle has paid $4.6 million for a residential security program that includes security guards at Ellison’s residence. Dell (NASDAQ:DELL) has paid $3.2 million for bodyguards and home-security for its founder. Dell is known to send advance security detail teams to scout out certain locations where the CEO will be.

The boards of both tech companies call it an appropriate business expense. Ellison owns 23% of Oracle (NASDAQ:ORCL) . Dell owns 13% of his namesake personal computer maker.

As part of an executive severance agreement, Whirlpool (NYSE:WHR) is still on the hook to the pay for the cost of a car and driver for Paulo Periquito, its former head of Latin America who lives in Brazil. He resigned at the end of 2009 and he keeps the car and driver through April 2012, according to a regulatory filing.

The cost of the car and driver was $104,352 in 2009.

Here are some other examples found in recent proxy statements:

• 3M ponied up $35,864 to “complete several projects improving the personal security” of its CEO George Buckley and his family “at their residences.” That paid for monitoring service fees, installation services and materials.

• Former Schering-Plough CEO Fred Hassan was protected with personal bodyguards, home-security system, and a car and driver. The drug maker explained that its executives had received threats from animal rights activists and others because of the products it sells. Since 2006, Schering-Plough had paid $442,196 for those services. Hassan stepped down from Schering-Plough after its merger with Merck (NYSE:MRK) in November 2009.

• Ford Motor Co. (NYSE:F) paid $1.2 million in security costs for its executive chairman Bill Ford, Jr. last year. In 2008, this expense was not listed because Ford (the great-grandson of Henry Ford) didn’t meet the definition of “named executive” under SEC rules. Meanwhile, home-security expenses for CEO Alan Mulally were $43,447, down from $112,114 in 2008.

• Inter-Con Security Systems does work for some Fortune 100 companies, including Wal-Mart Stores (NYSE:WMT) and McDonald’s (NYSE:MCD) . Inter-Con CEO Enrique Hernandez, Jr. also is popular with corporate boards. He is a director at Chevron (NYSE:CVX) , Wells Fargo (NYSE:WFC) , McDonald’s, and Nordstrom (NYSE:JWN).

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