Title:SVP, Business Services Company: JDS Uniphase
| Mar 9, 2011
The answer to this question is both straightforward and uncomfortable. Finance is the keeper of corporate funds in all companies, public or private, so when in doubt, you have to investigate regardless of level/title.
If you have a Code of Conduct, you should follow it. If you don't, you should follow what a Code of Conduct would prescribe.
First, again you have to investigate. You (or the CFO or even general counsel if you have one) should sit down and discuss this with the CEO directly. If that resolves the matter, and it well may, great. If not, you would have to run down the details. Once you establish your findings, I recommend a note to file if it's not material, or escalation to the board/investors or audit committee if material, especially if you work for a public company.
The key here is to follow the investigative and disciplinary process without regard to the fact that person involved is the CEO. In fact, diligence should be top-notch when the subject is a senior officer.
The correct answer 100% depends upon the corporate structure of your firm.
If this is a family owned company with the CEO acting as the founder and/or only shareholder, it is 100% up to him/her how this money is spent. In an ideal world, one would have the ability to confront the CEO about these expenses, but the CEO would also have the ability to say "shutup and go away".
In the alternative, if there are multiple shareholders who should know about these expenses, if you choose to solve the problem directly, you must talk with the CEO. If you choose an indirect route, you can indicate in the monthly summary to the shareholders that there are "unresolved expenditures" in the books. This might start the snowball rolling down the hill in terms of people asking questions. This allows you to put the uncomfortable task of questioning the CEO on others rather just upon your own shoulders.
Wouldn't the IRS disapprove? And if they did, they could attack the treatment by simply disallowing the expenses, or worse by calling them dividends (double slam). Plus there is always the tone that it sets. Do you allow the CEO to commit murder on expenses and make everyone else toe the mark? Double standards never work...at least not that I've seen in my lifetime.
Speaking from experience, I'd recommend taking a direct approach with your CEO if you report directly to him/her. If the report isn't direct, then enlist the aid of the top financial report to the CEO. Using a direct approach, explain to the CEO how the reports appear (which is why you are questioning them) and suggest options for improving them. Preface your comments with your fiduciary responsibility to the Company and its owners. The CEO's reaction will tell you whether any further action is necessary. I'm suggesting this direct approach with just the two of you because you will have to face and work closely with the CEO and at the end of the day, you need the respect of the CEO. The CEO may not appreciate the challenge initially, but he/she will come around afterwards, especially if you don't change your attitude/approach to the CEO after having such a frank conversation. Be as positive and open about this as you can be. Hopefully, you can accomplish this and leave the door open for other options. If the reaction is bad, disengage the discussion by saying something like, "look, I know this comes as a shock and I only have good intentions...perhaps we should finish this discussion after you've had a chance to absorb my stated reasons for bringing it up".
I am assuming that the question is being asked by a Controller or a CFO. Both these positions have the responsibility to protect the assets of the company. If the actions are clearly violating the company travel policy or the IRS requirements, the Controller is required to act in order to protect company assets and protect the company against violation of tax regulations. In addition, if this behavior is known by other employees of the company, looking the other way sets the wrong "tone at the top" and may encourage inappropriate behavior by other employees.
However, it is your first responsibility to make sure that your suspicions are valid. Few T&E policies and no government regulations are able to prohibit reimbursement of "stupid and excessive" expense reports if documentation and management authorization is present. If the company policy allows the reimbursement, a controller may be required to issue the expense reimbursement. That would not prevent the controller from trying to appeal to the responsible nature of the CEO. Such an appeal would probably be ignored, but th job of the controller is to provide sound business advice. In this situation it would not be easy, but it may be necessary.
An obvious question is "Who approves the CEO's expenses" There should be a system of checks and balances so that everyones expenses are independently reviewed and approved for compliance and reaonableness. In the case of the CEO the only logical source of approval would be the Board. If this is not the case, then I would suggest your approach would be to advise the board on a need for accounting controls and procedures to satisfy the audit requirements and exposures, and have them agree to approve the CEos expenses. This would give you the advantage of attributing your logic to the need for controls rather than suspicions of cheating. If the Board alreaday reviews but is not intervening on questionable expenses, or if they do not review properly when you introduce such a policy, you will be back to the face to face option with the CEO.
One other thought, make sure the wording on your expense reimbursement claim form is very specific. If the expense form simply requires a signature, this may be interpreted by the CEO as stating "Yes, these are the expenses for which I am seeking reimbursement" If you make the signature against a statement like "I verify that the above expenses were incurred wholly, exclusively and necessarily for the benefit of the company" then he may have to wrestle with his conscience a bit more!
I joined a company and found one of my subordinates was playing expense games. That's not as tough as your challenge but the issues are the same.
Lots of good comments already. In addition, consider implementing a policy of regular random expense report audits, perhaps a task for the internal audit team. Such a policy is consisent with the trust but verify philosophy. Too often, unless there's a reason to examine or investigate T&E reports, they receive only a cursory (or no) review and are simply approved.
There are many excellent comments and recommendations involving speaking directly to the CEO, so i will not go over those. One other comment referenced using the internal audit department to perform reviews, and depending on the level of concern / nature of the issues you are facing (do they need to be addressed sooner rather than later ?), this could be another good option to pursue. In a former company we had a requirement for an annual internal audit of all exec level management expenses (plus those paid to the Board), with the report going to the Audit Committee. Any non-compliances and related concerns were highlighted (together with remedial actions already taken), and in addition the report also included metrics that highlighted who was spending excessively. The report was always discussed with the CEO and CFO prior to presentation to the Audit Committee, thus you'd not bypass the need for discussion of any concerns that might arise, but you would be doing so as part of a formal required process.
I also very much agree with the comment that doing nothing can have a detrimental impact on employees perceptions of 'tone at the top'.
At my last employer the CEO's driver submitted an expense report for the CEO EVERY Friday for precisely $1000. The CEO's secretary controlled Petty Cash. Poof $50,000 extra in comp, tax free! When we merged with another public company I used it as an opportunity to eliminate the Petty Cash account and the separate Amex cards available only to the CEO and one or two of his closest cronies. I admit I was lucky because as the merger was a merger of equals the other company's BOD and CEO stuck around for a little while and that provided a useful screen. But getting the BOD to adopt a more transparent approach and accept responsibility for reviewing the CEO's T&E made it Somewhat easier but it was still an uncomfortable time. Also discreet side conversations with the outside auditors helped.
1) Mark Hurd, former CEO of HP, resigns, the Board is highly criticized in the press, the company faces reputational damage, and share valuations are lower
2) Employee submits an anonymous tip on the company’s ethics helpline, but the claim is never adjudicated
3) Senior leadership doesn’t want to hear bad news, so lower level management buries the issue
4) Whether in accounting or internal audit, the employee is discriminated against and eventually resigns or is eventually terminated
5) The tone at the top leads to other incidents of fraud and/or misconduct by lower level employees
Warren Buffett makes a bold statement in the Berkshire Hathaway Inc. 2010 Annual Report, “Corporate Culture, not rules, determines organizational behavior.”
What does the CEO’s disregard for rules say about this company’s corporate culture?
Or perhaps your CEO has no interest in sustaining an ethical and productive corporate culture.
To add to Jim Schwartz's comment. A discrete way to bring the subordinate in line with the expense policy would be for the CFO or Controller to assign the responsibility for running and reporting on the internal expense report audit to EXACTLY the member of the finance team who is 'playing games'. It takes one to know one, and it can be a very effective reform school. . .
Many of these answers assume a very hierarchal corporate structure. For many many small to mid-sized business this just isn't the case. There is no internal audit function and the CEO is the President and (partial-)owner.
It comes down to two things, a) taxes/legalities and b) cash flow/bank/investor. Approached in this manner, relating the non-business expenses flowing through the business most (unfortunately not all) CEO's will stop.
I find (B) to be more effective strategy than (A), but they both have worked.
Title:Managing Director Company: Financial Standard LLC
| Mar 31, 2011
Depends if you want the indigestion and being a target of not being a "team player." Having had a little experience on such a topic the General Counsel will side w/ the CEO, the board will do damage control and depending on their so called "independence" will side w/ the CEO. Even the independent auditors will side w/ the CEO. All will be looking for a rationalization, give him a slap on the wrist and ask him to pay the money back no questions asked, or look to ease him out ("resigned for family reasons," "other opportunities" or just plain "retire.") The other alternative (depending on how much) will be to whistleblow to the SEC which has a huge bounty program for corporate graft. But if you want to sustain your career, if you make this to be a big deal, the board is going to target you. I hate to say it, but from first hand experience, that is the way the world works.
Title:Accounting and Human Resource Manager Company: ANS
| Apr 4, 2011
I agree with Mr. Kral. For the most part. I've been in the situation in both big and small companies. First, in agreement with a post above, it depends on the size of the company. Small to midsize, one owner, suck it up. It's their company, it's their money. It's their company culture. If a larger company, with more stockholders, and/or loans, and audits, then it may be a different story. But, I've never seen auditors really care about that, unfortunately. I had one time where the CFO was buying office supplies for his own office as he was getting ready to launch his own business, all at the current business' expense. The AP staffer brought to my attention when she saw it first happen, and then to the auditors attention -- but they dismissed it as immaterial. Frankly, I did not want to get in to the middle of it because I knew I was soon leaving -- and the culture to that point was the CEO loved to use his business credit card and never provided receipts and did not think he needed to. Unfortunately, I have also found that those that do "this kind of thing" -- well, there is usually other unprincipled and dishonest "stuff" going on. It's not isolated. So, weighing all these things in, if you can't go to a higher up (immediate superior), and want to be the whistleblower, then understand the consequences. But understand your company culture first.
It's a tough situation to be in. My heart goes out to you.
I caught a CEO of mine stealing from the company for the few quarters prior to my coming on board (uncovered totally by chance, as it happens, b/c he stopped cold once I arrived). I did a TON of background research before going to the board with it. Yes, I went to the board directly b/c it was clear from the CEO's behavior that he would have done his best to dodge the bullet, including throwing me under the train. Ended up getting the CEO fired and I came out with some VC friends for life b/c I helped them quietly uncover this and move the CEO out.
And BTW, when I presented my case, it was crystal clear. At that moment, the board mobilized, got outside counsel working on it, and moved very quickly. Everyone was on the investor's side, which I was, of course, by bringing this to light. I was not going to sacrifice any part of my career for someone else's wrongdoing. So if your case is strong, this is a possible course of action.
Now, when you go around the CEO like this, someone's going to get fired, without a doubt. Make sure it's not going to be you.
I've had several situations like this in my career and handled the three specific instances differently.
1) One was when my dotted-line boss (CFO) asked me to sign his expense report after a trip to Asia. He had purchased books to read, all new luggage and other questionable items and charged them to the company. I felt that was not acceptable under our written expense policy and I myself had had legitimate requests denied. As I was "sitting in" for my boss, the CEO during a business trip, I sent the CFO's expense report back and told him that I thought it more appropriate if the CEO reviews and signs his expenses. Now, whether or not he was pulling stuff like this all the time, I don't know, as the corporate group's expense reports were filed in a different building. I always seemed to get this guy's expense reports the second the CEO left town...
2) Another example is a CEO of a company I was working for had relocated from southern California to the Bay Area. Well, not really. He left early on Fridays and came in late on Mondays, flying down and back to L.A. to his house. While up in the bay area, he stayed at a (nice) hotel and charged this and all his meals, including cocktails, wine, etc., to the company. He did have a very nebulous relocation agreement in place, but this went on for over 18 months. I asked him the usual who, what, when and where about the agreement and he said that it was supposed to be good until he found a house in the bay area. After outside auditor questions, I was compelled to kick it up and notch. I e-mailed the CEO first and told him that the auditors want a copy of his relo agreement before they sign off on the financials. I told him I had to copy the COB, who called me later to get the full extent of what was going on and how much was spent over this period. After that, the COB decided to have a written agreement drawn up to give the CEO a weekly fixed stipend to stay and eat where he chose, but it had a definite termination clause only allowing for six-months more of any ongoing relo expenses; also, the stipend was much less money, so the company was on the hook for only a set amount of expenese. He finally bought a house up here and that settled the issues in short order.
3) Then there was the case of the spend-thrift (also the founder) CEO who would only eat in fancy resaurants and stayed at four and five star hotels, Ritz, etc. Dinner usually included several $300 bottles of wine. Since this was a start up, I commented to him jokingly that maybe I should choose the wine, since it was nearing our capital expense policy. He laughed, but the next dinner we were at, I went ahead and chose, instead, a $50 bottle of wine that they all loved. Since these Board meetings were a regular occassion, I made a point of giving some weekly cash flow trends to the CEO and Board, which heightened their awareness to the cash situation of the company.
I chose not to go head to head with any of these CEOs, as the attitude was "my way or the highway", especially with a founder-CEO, and this type of stuff had happened to me even in large companies
Answers
Company: JDS Uniphase
The answer to this question is both straightforward and uncomfortable. Finance is the keeper of corporate funds in all companies, public or private, so when in doubt, you have to investigate regardless of level/title.
If you have a Code of Conduct, you should follow it. If you don't, you should follow what a Code of Conduct would prescribe.
First, again you have to investigate. You (or the CFO or even general counsel if you have one) should sit down and discuss this with the CEO directly. If that resolves the matter, and it well may, great. If not, you would have to run down the details. Once you establish your findings, I recommend a note to file if it's not material, or escalation to the board/investors or audit committee if material, especially if you work for a public company.
The key here is to follow the investigative and disciplinary process without regard to the fact that person involved is the CEO. In fact, diligence should be top-notch when the subject is a senior officer.
Company:
The correct answer 100% depends upon the corporate structure of your firm.
If this is a family owned company with the CEO acting as the founder and/or only shareholder, it is 100% up to him/her how this money is spent. In an ideal world, one would have the ability to confront the CEO about these expenses, but the CEO would also have the ability to say "shutup and go away".
In the alternative, if there are multiple shareholders who should know about these expenses, if you choose to solve the problem directly, you must talk with the CEO. If you choose an indirect route, you can indicate in the monthly summary to the shareholders that there are "unresolved expenditures" in the books. This might start the snowball rolling down the hill in terms of people asking questions. This allows you to put the uncomfortable task of questioning the CEO on others rather just upon your own shoulders.
Company: Haines, Isenbarger & Skiba LLC
Wouldn't the IRS disapprove? And if they did, they could attack the treatment by simply disallowing the expenses, or worse by calling them dividends (double slam). Plus there is always the tone that it sets. Do you allow the CEO to commit murder on expenses and make everyone else toe the mark? Double standards never work...at least not that I've seen in my lifetime.
Company: Haines, Isenbarger & Skiba LLC
Speaking from experience, I'd recommend taking a direct approach with your CEO if you report directly to him/her. If the report isn't direct, then enlist the aid of the top financial report to the CEO. Using a direct approach, explain to the CEO how the reports appear (which is why you are questioning them) and suggest options for improving them. Preface your comments with your fiduciary responsibility to the Company and its owners. The CEO's reaction will tell you whether any further action is necessary. I'm suggesting this direct approach with just the two of you because you will have to face and work closely with the CEO and at the end of the day, you need the respect of the CEO. The CEO may not appreciate the challenge initially, but he/she will come around afterwards, especially if you don't change your attitude/approach to the CEO after having such a frank conversation. Be as positive and open about this as you can be. Hopefully, you can accomplish this and leave the door open for other options. If the reaction is bad, disengage the discussion by saying something like, "look, I know this comes as a shock and I only have good intentions...perhaps we should finish this discussion after you've had a chance to absorb my stated reasons for bringing it up".
Company: TFPP - Marinette Operations
I am assuming that the question is being asked by a Controller or a CFO. Both these positions have the responsibility to protect the assets of the company. If the actions are clearly violating the company travel policy or the IRS requirements, the Controller is required to act in order to protect company assets and protect the company against violation of tax regulations. In addition, if this behavior is known by other employees of the company, looking the other way sets the wrong "tone at the top" and may encourage inappropriate behavior by other employees.
However, it is your first responsibility to make sure that your suspicions are valid. Few T&E policies and no government regulations are able to prohibit reimbursement of "stupid and excessive" expense reports if documentation and management authorization is present. If the company policy allows the reimbursement, a controller may be required to issue the expense reimbursement. That would not prevent the controller from trying to appeal to the responsible nature of the CEO. Such an appeal would probably be ignored, but th job of the controller is to provide sound business advice. In this situation it would not be easy, but it may be necessary.
Company: Aargo Inc.
An obvious question is "Who approves the CEO's expenses" There should be a system of checks and balances so that everyones expenses are independently reviewed and approved for compliance and reaonableness. In the case of the CEO the only logical source of approval would be the Board. If this is not the case, then I would suggest your approach would be to advise the board on a need for accounting controls and procedures to satisfy the audit requirements and exposures, and have them agree to approve the CEos expenses. This would give you the advantage of attributing your logic to the need for controls rather than suspicions of cheating. If the Board alreaday reviews but is not intervening on questionable expenses, or if they do not review properly when you introduce such a policy, you will be back to the face to face option with the CEO.
One other thought, make sure the wording on your expense reimbursement claim form is very specific. If the expense form simply requires a signature, this may be interpreted by the CEO as stating "Yes, these are the expenses for which I am seeking reimbursement" If you make the signature against a statement like "I verify that the above expenses were incurred wholly, exclusively and necessarily for the benefit of the company" then he may have to wrestle with his conscience a bit more!
Company: Wabash Financial Strategies
I joined a company and found one of my subordinates was playing expense games. That's not as tough as your challenge but the issues are the same.
Lots of good comments already. In addition, consider implementing a policy of regular random expense report audits, perhaps a task for the internal audit team. Such a policy is consisent with the trust but verify philosophy. Too often, unless there's a reason to examine or investigate T&E reports, they receive only a cursory (or no) review and are simply approved.
Company: Direct Approach Solutions
Expense reports are supposed to be signed off by superiors. i.e.:
person submitting the ER - person signing off:
Controller - CFO
CFO - CEO
CEO - President or member of the Board
Company: In Transition
There are many excellent comments and recommendations involving speaking directly to the CEO, so i will not go over those. One other comment referenced using the internal audit department to perform reviews, and depending on the level of concern / nature of the issues you are facing (do they need to be addressed sooner rather than later ?), this could be another good option to pursue. In a former company we had a requirement for an annual internal audit of all exec level management expenses (plus those paid to the Board), with the report going to the Audit Committee. Any non-compliances and related concerns were highlighted (together with remedial actions already taken), and in addition the report also included metrics that highlighted who was spending excessively. The report was always discussed with the CEO and CFO prior to presentation to the Audit Committee, thus you'd not bypass the need for discussion of any concerns that might arise, but you would be doing so as part of a formal required process.
I also very much agree with the comment that doing nothing can have a detrimental impact on employees perceptions of 'tone at the top'.
Company: Jepsen Consulting
At my last employer the CEO's driver submitted an expense report for the CEO EVERY Friday for precisely $1000. The CEO's secretary controlled Petty Cash. Poof $50,000 extra in comp, tax free! When we merged with another public company I used it as an opportunity to eliminate the Petty Cash account and the separate Amex cards available only to the CEO and one or two of his closest cronies. I admit I was lucky because as the merger was a merger of equals the other company's BOD and CEO stuck around for a little while and that provided a useful screen. But getting the BOD to adopt a more transparent approach and accept responsibility for reviewing the CEO's T&E made it Somewhat easier but it was still an uncomfortable time. Also discreet side conversations with the outside auditors helped.
Company: Anonymous
1) Mark Hurd, former CEO of HP, resigns, the Board is highly criticized in the press, the company faces reputational damage, and share valuations are lower
2) Employee submits an anonymous tip on the company’s ethics helpline, but the claim is never adjudicated
3) Senior leadership doesn’t want to hear bad news, so lower level management buries the issue
4) Whether in accounting or internal audit, the employee is discriminated against and eventually resigns or is eventually terminated
5) The tone at the top leads to other incidents of fraud and/or misconduct by lower level employees
Warren Buffett makes a bold statement in the Berkshire Hathaway Inc. 2010 Annual Report, “Corporate Culture, not rules, determines organizational behavior.”
What does the CEO’s disregard for rules say about this company’s corporate culture?
Or perhaps your CEO has no interest in sustaining an ethical and productive corporate culture.
Company: Tatum LLC
To add to Jim Schwartz's comment. A discrete way to bring the subordinate in line with the expense policy would be for the CFO or Controller to assign the responsibility for running and reporting on the internal expense report audit to EXACTLY the member of the finance team who is 'playing games'. It takes one to know one, and it can be a very effective reform school. . .
Company: SBA * Consulting, LTD
Many of these answers assume a very hierarchal corporate structure. For many many small to mid-sized business this just isn't the case. There is no internal audit function and the CEO is the President and (partial-)owner.
It comes down to two things, a) taxes/legalities and b) cash flow/bank/investor. Approached in this manner, relating the non-business expenses flowing through the business most (unfortunately not all) CEO's will stop.
I find (B) to be more effective strategy than (A), but they both have worked.
Company: Financial Standard LLC
Depends if you want the indigestion and being a target of not being a "team player." Having had a little experience on such a topic the General Counsel will side w/ the CEO, the board will do damage control and depending on their so called "independence" will side w/ the CEO. Even the independent auditors will side w/ the CEO. All will be looking for a rationalization, give him a slap on the wrist and ask him to pay the money back no questions asked, or look to ease him out ("resigned for family reasons," "other opportunities" or just plain "retire.") The other alternative (depending on how much) will be to whistleblow to the SEC which has a huge bounty program for corporate graft. But if you want to sustain your career, if you make this to be a big deal, the board is going to target you. I hate to say it, but from first hand experience, that is the way the world works.
Company: ANS
I agree with Mr. Kral. For the most part. I've been in the situation in both big and small companies. First, in agreement with a post above, it depends on the size of the company. Small to midsize, one owner, suck it up. It's their company, it's their money. It's their company culture. If a larger company, with more stockholders, and/or loans, and audits, then it may be a different story. But, I've never seen auditors really care about that, unfortunately. I had one time where the CFO was buying office supplies for his own office as he was getting ready to launch his own business, all at the current business' expense. The AP staffer brought to my attention when she saw it first happen, and then to the auditors attention -- but they dismissed it as immaterial. Frankly, I did not want to get in to the middle of it because I knew I was soon leaving -- and the culture to that point was the CEO loved to use his business credit card and never provided receipts and did not think he needed to. Unfortunately, I have also found that those that do "this kind of thing" -- well, there is usually other unprincipled and dishonest "stuff" going on. It's not isolated. So, weighing all these things in, if you can't go to a higher up (immediate superior), and want to be the whistleblower, then understand the consequences. But understand your company culture first.
It's a tough situation to be in. My heart goes out to you.
Company:
I caught a CEO of mine stealing from the company for the few quarters prior to my coming on board (uncovered totally by chance, as it happens, b/c he stopped cold once I arrived). I did a TON of background research before going to the board with it. Yes, I went to the board directly b/c it was clear from the CEO's behavior that he would have done his best to dodge the bullet, including throwing me under the train. Ended up getting the CEO fired and I came out with some VC friends for life b/c I helped them quietly uncover this and move the CEO out.
And BTW, when I presented my case, it was crystal clear. At that moment, the board mobilized, got outside counsel working on it, and moved very quickly. Everyone was on the investor's side, which I was, of course, by bringing this to light. I was not going to sacrifice any part of my career for someone else's wrongdoing. So if your case is strong, this is a possible course of action.
Now, when you go around the CEO like this, someone's going to get fired, without a doubt. Make sure it's not going to be you.
Company: Self-employed
I've had several situations like this in my career and handled the three specific instances differently.
1) One was when my dotted-line boss (CFO) asked me to sign his expense report after a trip to Asia. He had purchased books to read, all new luggage and other questionable items and charged them to the company. I felt that was not acceptable under our written expense policy and I myself had had legitimate requests denied. As I was "sitting in" for my boss, the CEO during a business trip, I sent the CFO's expense report back and told him that I thought it more appropriate if the CEO reviews and signs his expenses. Now, whether or not he was pulling stuff like this all the time, I don't know, as the corporate group's expense reports were filed in a different building. I always seemed to get this guy's expense reports the second the CEO left town...
2) Another example is a CEO of a company I was working for had relocated from southern California to the Bay Area. Well, not really. He left early on Fridays and came in late on Mondays, flying down and back to L.A. to his house. While up in the bay area, he stayed at a (nice) hotel and charged this and all his meals, including cocktails, wine, etc., to the company. He did have a very nebulous relocation agreement in place, but this went on for over 18 months. I asked him the usual who, what, when and where about the agreement and he said that it was supposed to be good until he found a house in the bay area. After outside auditor questions, I was compelled to kick it up and notch. I e-mailed the CEO first and told him that the auditors want a copy of his relo agreement before they sign off on the financials. I told him I had to copy the COB, who called me later to get the full extent of what was going on and how much was spent over this period. After that, the COB decided to have a written agreement drawn up to give the CEO a weekly fixed stipend to stay and eat where he chose, but it had a definite termination clause only allowing for six-months more of any ongoing relo expenses; also, the stipend was much less money, so the company was on the hook for only a set amount of expenese. He finally bought a house up here and that settled the issues in short order.
3) Then there was the case of the spend-thrift (also the founder) CEO who would only eat in fancy resaurants and stayed at four and five star hotels, Ritz, etc. Dinner usually included several $300 bottles of wine. Since this was a start up, I commented to him jokingly that maybe I should choose the wine, since it was nearing our capital expense policy. He laughed, but the next dinner we were at, I went ahead and chose, instead, a $50 bottle of wine that they all loved. Since these Board meetings were a regular occassion, I made a point of giving some weekly cash flow trends to the CEO and Board, which heightened their awareness to the cash situation of the company.
I chose not to go head to head with any of these CEOs, as the attitude was "my way or the highway", especially with a founder-CEO, and this type of stuff had happened to me even in large companies