The number of Irish firms offering their chief executives a company car has fallen dramatically over the past six years, a new survey has found.
When companies were asked if they supplied their CEOs with a car, only 44 per cent said they did. In 1998, 85 per cent of CEOs drove a company car, a figure that dropped to 51 per cent last year in the Irish Management Institute's survey of executive pay packets.
The decline in companies offering the company car perk is most likely due to stricter benefit-in-kind rules, introduced at the start of the year. From January 1st last, Revenue required PAYE and PRSI be applied to benefits-in-kind for the first time.
Before the new rules, the onus had been on the employee to declare any benefits-in-kind, with the Revenue reducing personal tax credits accordingly. It is believed thousands of taxpayers ignored the tax or did not inform Revenue of the full value of their benefits. Now, it seems, the new rules have made a company car a decreasingly attractive option.
Further down the chain of command also, company cars are also becoming more and more rare. Only 37 per cent of employees classed as "Head of Function" were driving company cars this year, compared to 42 per cent last year and 78 per cent in 1998.
Middle managers were driving courtesy of the boss in 25 per cent of cases this year, compared to 31 per cent in 2003, and 45 per cent in 1998. Only 10 per cent of first line managers drive company cars, according to the survey, a figure which has remained constant since 1998.
Most chief executives with company cars (31 per cent) were given vehicles worth between €50,000 and €60,000. Some 21 per cent were given cars worth less than €50,000. Nineteen per cent drove cars worth between €60,000 and €70,000, 14 per cent between €70,000 and €80,000 and 15 per cent of chief executives were given cars worth more than €80,000.
Companies favoured BMWs for top posts. Where firms supplied cars to chief executives, he or she was given a BMW in 32 per cent of cases, Mercedes-Benz in 24 per cent of cases, followed by Audi (13 per cent), Saab (5 per cent) and other makes (26 per cent).
At middle management the most popular cars were Volkswagen (22 per cent), Audi (17 per cent), Volvo (12 per cent), Saab (10 per cent) and other makes (39 per cent). Other makes were most commonly either Peugeot, Toyota, Ford or Renault, the survey said.
In two-thirds of cases where a car was supplied, the company covered the bill for insurance, road tax, servicing and repairs. Some 14 per cent of companies paid for petrol used in the course of business, while the remainder supplied all petrol.
