Michael Laphen makes really nice money as president and COO of Computer Sciences Corp. over in El Segundo. Understand that I've never been quite sure what CSC does (there have been rumors about the company's involvement in top-secret government programs and they've worked with the IRS for years). Anyway, its Web site goes over stuff like front-end consulting and systems integration, and how it has hundreds of commercial and government clients worldwide. It's a big important company, in other words, and much of what it does is considered none of our business. But that creates a little problem because CSC also happens to be a publicly held company, and there are some things that it simply must report to the government. Financial type things. Which gets us back to Laphen, whose compensation last year totaled was $4.5 million. Now, you can do lots of things with that kind of dough, including pay for your family's travel. But as many of you know, senior execs don't like doing that if they don't have to. So here we have CSC agreeing to give Laphen's family access to the company's corporate jet. Our friend at footnoted.org, Michelle Leder, came across this telling passage in the employment agreement:
“It being recognized that some of Executive’s personal travel using the Company’s aircraft may be required for purposes for security and/or ensuring Executive’s availability for the demands of the Company’s business, the Company shall permit the use of the Company’s aircraft at the Company’s expense for reasonable personal use by Executive and accompanying family members.”
Leder finds it kind of strange that according to the most recent proxy, Laphen didn’t use the corporate jet for personal use at all. So what's up with that? Planning that vacation in Aruba? And while perks don't necessarily have anything to do with performance, it is worth mentioning that CSC recently announced that it discovered accounting errors between 1997 and 2007. Those boo-boos could mean a charge of as much as $200 million and has pretty much messed up all its recent filings (something about income taxes and the foreign currency exchange rate). I realize that accounting errors probably don't have much to do with family trips on the company plane, but the juxtaposition doesn't look very good. In case you're wondering, CSC had a 52-week high on July 10 of $63.76 a share. The stock closed today at $54.52.