In 2010, Sotheby's directors took a big whack at their chief executive officer's perks: William Ruprecht's annual allowance for a car and driver was cut to US$25,000 from US$143,000 in 2009 including associated taxes. And the auction house stopped reimbursing him for taxes he was assessed when it paid his country club dues and financial planning fees, and other perks.
As Daniel Loeb, founder and CEO of hedge fund Third Point LLC, pursues a bigger stake in Sotheby's and the departure of Ruprecht, he has made clear his distaste for privileges that "invoked the long-gone era of imperial CEOs".
Ruprecht, whose contract expires next August, earned US$7 million in 2011 and US$6.3 million in 2012. Although he presided over the art market boom, results lately have been mixed. Last year, sales declined 7 per cent to US$5.4 billion. Its rival Christie's sales increased 10 per cent to US$6.2 billion in the same period.
Its results for the first half of 2013 "reflect mixed sales performance", Sotheby's says in a filing. Its auction commission margin - revenue from auction sales - peaked in 2009 at US$20.70 for every US$100 of sales. It was US$16.30 last year.
"Sotheby's was certainly an early adopter of internet technology," says Patrick Meade, US chief operating officer for Bonhams auction house, and a former Christie's senior vice-president of business development. "Christie's didn't even see the relevance of online selling platforms at the time."
Christie's now offers online sales in seven categories, including fine art, wine and jewellery. During the first half of 2013, 46 per cent of buyers at 11 online-only auctions were new to Christie's. Sotheby's allows its clients to bid online but doesn't have online-only sales.