Using the corporate jet is one of most common reasons cited by the report for tax 'gross-ups'

Many American companies are playing fast and loose with new requirements that they disclose how they calculate and why they are giving their CEOs and senior executives their huge compensation packets.

However, the new disclosure rules are revealing the plethora of outlandish perks that CEOs and their ilk receive.

Last year the Securities and Exchange Commission introduced rules that forced companies, in their annual filings, to state how much they pay their top executives as well as how they reached, for instance, bonus targets.

Many of the country's largest companies have been filing those statements in recent weeks and analysis by The Corporate Library, a corporate governance research firm, of 489 large companies, fewer than a third – 32.72% – disclosed performance targets as well as metrics. The researcher expects the SEC to crack down on these omissions this year.

There has been intensified activism by shareholders, who are increasingly disgusted at compensation plans that bear no resemblance to company performance.

Perhaps the most bizarre compensation a CEO receives is assistance paying their income tax on their pay and perks. A new report from The Corporate Library delves into the increasingly common practice of "grossing up".

In a nutshell that means the company picks up the income tax liabilities a CEO faces on his perks, and sometimes even his pay and bonuses. The Corporate Library, in examining 3,297 proxy statements filed between February 2007 and February 2008 found that 20% of CEOs (more than 650 individuals) receive tax gross-ups on part of their income.

"The sight of Angelo Mozilo [then CEO of troubled Countrywide Financial] defending his request to the board to have the income tax due when his wife travelled for free on the corporate jet paid by the shareholders gave me pause for thought," said Paul Hodgson, the report's author.

"I decided to find out how common this kind of practice was. Jaded though I am, I have to admit to being surprised at the extent of what I like to call the grossest perk."

Using the corporate jet is one of most common reasons cited by the report for tax "gross-ups". That personal use of the company plane is a form of compensation to the executive, so it generates a tax liability. But rather than making the CEO pay the tax on that benefit, dozens of companies pick up the bill from the IRS.

The Corporate Library report names and shames Chad Dreier, CEO of homebuilder Ryland Group as the executive who received the biggest gross-up. Dreier was one of 30 executives who received "gross-ups" on earnings not just perks. In the fiscal year 2006 he received over $5.75m (£2.92m) in "tax assistance" on the vesting of $6.5m of restricted stock.

In total Dreier received $5.82m of tax assistance in 2006 when his total compensation was almost $49m. And in a new proxy for 2007, Ryland revealed it provided Mr Dreier with $4m in gross-ups, as part of a pay package that totaled $12m.

"We are sure that many US workers would be grateful if their employers also paid their income tax obligations," commented Hodgson.

Perhaps not surprisingly the pay of executives in the building and mortgage industries are being most scrutinised by increasingly agitated shareholders, who have seen the value of their stock plummet.

A shareholder revolt at Toll Brothers just failed to stop the company introducing a new bonus plan for its CEO. Robert Toll didn't make a bonus under the old plan in 2007 so the company decided to change the metrics to ensure that didn't happen this year. Shareholders have watched the value of their stock halved since it peaked at $55.81 in mid-2006.

Aside from gross-ups, CEOs and other executives receive perks galore and now they have to be revealed in the filings. Michelle Leder, founder of the website Footnoted.org takes guilty pleasure in revealing all even though she admits "even the zaniest perks rarely have a material impact on a company's financials".

Thought-provoking examples include why does Macy's chairman and CEO Terry Lundgren suddenly need a special car and a driver who is a trained security specialist at a cost of $87,000 a year? His car cost only $9,900 in 2006.

Why can't CEOs do their own taxes and financial planning like everyone else? Time Warner's chairman Dick Parsons, who earned $18.6m in 2007 also received $100,000 in company-paid "financial services".

Kraft Foods spent $52,000 on financial counselling for Kraft International head Sanjay Khosla, who earned about $3m and Steven Loranger, head of defence contractor ITT Corporation, whose earned $13.7m, last year needed $37,000 from the company to help him keep his finances in order.

Obviously people need to eat but does Playboy's Hugh Hefner really need $400,000 to provide food, housing and "personal benefits" to his three live-in girlfriends, Holly, Bridget and Kendra?

There are signs that some companies are beginning to listen to their aggravated shareholders. Progress Energy, an electricity provider, said it is no longer providing its top nine executives with perks such as complimentary country club fees, personal and spousal travel on the corporate jet, airline club memberships and event tickets that are not related to business.

And at struggling clothing retailer, Charming Shoppes, where there are efforts to oust CEO Dorrit Bern, the company announced it was stopping – after 10 years – paying her apartment's rent. Oh, and the $1m bonus for simply staying on and being the CEO and chairwoman. Forget that.