At least once a year, executives from Ciena Corp. spend a day at Johns Hopkins Hospital getting poked and prodded as they undergo tests for a barrage of potential ailments, from anemia to prostate cancer.
They aren't necessarily feeling ill or showing any symptoms.
In fact, the executives of Linthicum-based Ciena are often healthy — and their company wants to keep it that way. The $2,000-per-person prices for these full-body examinations are considered an essential corporate expense. Ciena and other companies with "executive health" perks say it's in their best interest to keep the top ranks well.
"They need to monitor their health on a regular basis so they're there to lead and direct the company," said Randy Harris, chief human resources officer at Ciena.
While the special care for executives is sometimes criticized by shareholders and workers who say the health plans offered to rank-and-file employees should be just as good, corporate pay experts say the health perks are less controversial — and in some cases less costly — than incentives such as private jets and country club memberships.
And corporate chiefs point to Apple Inc. as an example of what can go wrong.
Last month, chief executive Steve Jobs, who co-founded the company and has been credited with its success, made headlines when he announced he would take another medical leave after a six-month absence to undergo a liver transplant two years ago. In both instances, jittery investors worried about the direction of the company sent Apple shares plunging. (Apple doesn't have a separate executive health program.)
Medical problems among the executive ranks — particularly the CEO — can cause concern about the stability of a company. When Baltimore-born Reginald F. Lewis died of brain cancer in 1993, there was concern that his company, TLC Beatrice International Holdings, would be taken over.
And historically, some companies have even tried to hide the illness of executives to protect the business. In 1988, AT&T kept secret that CEO James Olson was suffering from colon cancer, which eventually killed him, according to news reports at the time. Company officials revealed the illness only after questioning from reporters who had heard rumors about his health.
A number of health care providers have tailored programs to provide concierge and specialized services for the busy executive. And companies are signing up.
Executive physicals and other wellness programs have been one type of perk that has remained in the past couple of years even as other compensation came under scrutiny, especially during the recession, by shareholders and cost-cutting companies. Other perks include reimbursement for out-of-pocket health expenses and gym memberships.
Last year, 32 Fortune 100 companies paid for executive physicals for their CEOs, according to Equilar, an executive compensation data firm. That was the same number as the year before. Included in that list was the CEO of Bethesda-based Lockheed Martin. The company did not disclose the cost of that annual exam in financial filings.
Hopkins Hospital tailored its program to cater to harried executives who might travel frequently or find it hard to break away from meetings and the everyday grind to see a doctor.
About 1,200 patients come through the program a year. The program has expanded beyond CEOs of large companies to small-business owners and other individuals who pay for the service themselves. A UPS truck driver recently took the physical at Hopkins, said Bimal Ashar, who heads the program.
The day starts with collecting the executive's medical history, followed by blood tests, a chest X-ray, an eye examination, an EKG to test heart condition and nutrition counseling. The patients also undergo a hearing test and a pulmonary function exam to check for emphysema, bronchitis and other respiratory diseases.
Ashar said they have diagnosed pancreatic cancer, liver disease and prostate cancer in patients who have come through the program. They have also performed bypass surgery and inserted stents in patients discovered to have heart disease.
Constellation Energy Group pays for optional annual exams for their executives through the Hopkins program. Five executives, including Chairman and CEO Mayo A. Shattuck III, chose to have the exams last year.
"The board sees value in providing an extra inducement for the officers in the company to not put physicals off and to regularly get a comprehensive checkup," said Lawrence McDonnell, director of corporate communications at Constellation. McDonnell said the management team is a "vital asset to the company."
Financial services company Capital One, with 2,000 employees and 130 branches in Maryland, offers its executives optional physicals through Hopkins and two other institutions as a way for them to "stay healthy and support their effectiveness," according to a company spokeswoman.
Cheryl Heller, vice president of bank operations at Capital One who lives in Maryland, began getting the physicals in 2008, but before that didn't get regular checkups. "Being able to get blood screenings and everything checked out all at the same time appeals to me because of the convenience of it," Heller said.
Spice maker McCormick & Co. said the company aims to keep all employees healthy, offers free preventive care and encourages them to join a gym.
"We want to make the people who are unhealthy healthy and make sure that the people who are currently healthy stay healthy," said James Downing, senior manager of corporate benefits strategy at Sparks-based McCormick.
Regulatory filings show that McCormick executives also have an allowance and reimbursements for wellness issues. CEO Alan D. Wilson received $5,185 in reimbursements and an allowance to pay for financial planning and wellness services, according to the filing.
"The executives are crucial and vital to the sustainability of the company and the future of the company," Downing said.
Hampstead-based Jos. A. Bank also reimbursed executives last year up to $2,500 for medical expenses. But the company said it tries to keep equity between health plans for executives and workers, who all choose from the same insurance benefits packages.
"We understand there are a number of companies that put a premium on the CEO or executive health plan, and we felt that we are all in this together and we all have one benefit package and we want to understand what each other's needs are and meet them mutually," said Bob Hensley, an executive vice president at the company who heads human resources.
Executives-only health programs have been criticized along with other corporate perks. "Perks are not viewed terribly well by shareholders," said Steven Hall, managing director of Steven Hall & Partners, an executive compensation consulting firm that advises compensation committees for large companies.
But such perks aren't as likely to be cut because they don't receive the same scrutiny as others, some compensation experts said. Moreover, the perks can provide tax benefits for a company and be a more cost-effective way of sweetening a pay package.
"With these gold-plated health plans, I don't think they're a significant enough dollar value to cause as much scrutiny as things such as corporate jet use," said Michael Faulkender, an assistant professor of finance at the Robert H. Smith School of Business at the University of Maryland who follows compensation issues.
Harris of Ciena said most of the company's 40 executives get the annual physical. It is particularly popular among executives who work overseas and spend a limited time in the U.S.
"We don't have many perks here," Harris said. "The only things we really offer are the physical and tax- planning assistance, and the physical definitely has higher usage."
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