From Corporate Jets to Home Theaters, Fired Executives Lose More Than Their Jobs
This story first appeared in the Oct. 11 issue of The Hollywood Reporter magazine.
When a major studio chief recently overhauled his office, he took advantage of an unusual perk. His staff of assistants received new clothing budgets to ensure that their attire would color-coordinate with the fabric and upholstery of the revamped suite.
Though there was no contractual obligation to do so, the studio footed the bill as just another line-item expense. But such sweeteners and swag -- the mainstay of top-level Hollywood brass -- disappear once an executive is shown the door. After the inevitable dismissal, execs also have to learn to make do without access to private jets, home security guards and chauffeurs.
For years, studio chiefs and division heads have been able to negotiate perks that would make execs in other businesses jealous, including hours on the corporate jet, which one lawyer dubs "the holy grail of the executive contract." Also woven into typical agreements, say those who have negotiated them, are access to drivers, particularly for New York-based execs, and private security guards for the home, though the latter has become less customary in recent years. Some have language that requires the agency to fund a big-budget Oscar bash annually.
But even more commonplace are the unwritten extras, which range from country club memberships to unfettered access to the corporate box at L.A.'s Staples Center to elaborate home movie theaters. One lawyer says he helped a top executive client get a newly constructed addition to the home with a separate entrance to accommodate a home theater. Plum parking spots and the size of office couches also are important pecking-order indicators, but they typically are agreed upon verbally rather than contractually.
"These kinds of things are rarely written into the contract because the studios don't want to have some funky thing on their books," explains a lawyer who has drafted several such deals. "The studio pays it if it's a genuine business expense. For everything else -- like private school tuition -- they would rather just pay a higher salary." For instance, Disney chief Bob Iger's contract simply states under the perks section that he gets "such perquisites as are generally provided to other senior officers of the company in accordance with the then current policies and practices of the company."
In today's corporatized studio world, perks have become less perky than ever before. Disney recently did away with a program that allowed executives to select a GM car, which was gassed up and washed on the lot for free. A free gas-up-on-the-lot program at Universal was abandoned years ago.
One lawyer recalls an awkward incident where a studio chief sat in first class on a flight while the boss of the corporate parent sat in business class. The corporate parent's policy stipulated no first-class travel companywide.
Nevertheless, there are still some freebies to be had. Studios will pay mammoth relocation budgets for executives switching coasts or continents, as Universal's Jeff Shell is doing from London for his new L.A. job. One Europe-based exec who moved to Los Angeles scored a new home as well as a driver until he gets accustomed to the freeways.