foreclosures

Staggering numbers of foreclosures and layoffs have made company executives the target of hate and this has led to escalation of their security expenses.

Threats of the executives and spending for their protection are nothing something new to the industry and the economy. In bad economic weather this intensifies. Associated Press has reported that Kurt Hellstroem CEO of Ericsson (wireless equipment maker) received a death threat by mail together with a bullet cartridge in 2001 when he laid off 17,000 workers.

Firms are not expected to disclose any spending on security that did not exceed $50,000 till 2006. Research shows that expenses of personal and residence securities of CEO are increased by 23% and 54% in 2005 and 2006 respectively. FedFex has said that the spending on its CEO Fred Smith will drop by 23% in 2009. It will go down from $595,875 in 2008 to $461,405. Most of the firms are reluctant to disclose their spending on security for the CEO’s right now.

From general trends it seems that the spending is unlikely to level off yet. The security industry sits on $10 billion. It too is not spared by recession and does not expect growth in the current year said Mark Visbal of Security Industry Association. But those firms that specialize in protecting the rich and famous are going through a bonanza period. The business of 360 Group has gone up by 50% since the last 12 months said its CEO Bill Kirkpatrick. He reasons that people lose their senses when they lose jobs and vents all their anger on the CEO’s.

There is no detailed way of counting the actual number of threats because the firms very rarely speak about it – not even to the law enforcing bodies like the police. Tim McKineey of ADT Security Services (electronic security giant) said his company deals with 5 million clients in the commercial, governmental and residential sectors. He confirmed that over half of the Fortune 500 firms agree that there is talk in the market about a spike in the number of threats to CEOs. But there are no definite “figures to substantiate it.”

In USA there have been rare instances of CEOs being actually attacked or abducted in the last few decades. In Columbia, South Carolina, the picture is totally different. Even those who report to the CEOs are given round the clock protection.

The security factor comes with a huge price tag. But kings have to be protected. It will require $1 million for someone with a yacht and many homes who require round the clock protection.

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