Some three-fifths of the 100 biggest U.S.-listed companies let their executives fly on corporate aircraft for personal travel
By John Foley and Varada Bhat
NEW YORK (Reuters Breakingviews) - It seems to be de rigueur for U.S. company bosses to complain that capitalism is under attack. Yet most are putting their head in the clouds — literally. Some three-fifths of the 100 biggest U.S.-listed companies let their executives fly on corporate aircraft for personal travel, a Breakingviews analysis shows. It wouldn’t be hard for them to set a better example.
The 59 large companies that let their top brass use company-procured jets for personal travel for free spend an average of $306,000 (all dollars US) a year on it, according to latest available proxy statements. Facebook clocked up the most at $1.5 million for Chief Executive Mark Zuckerberg alone. The social network, like others including Exxon Mobil and Apple , say security dictates certain staff fly privately even outside of work business. Others, like DowDuPont and Mondelez International, say they want the boss available at the drop of a hat.
Yet others manage without such perks. Berkshire Hathaway's Warren Buffett and Charlie Munger don’t use corporate planes for personal travel. Oracle prohibits private trips, but lets business travelers bring guests. Bristol-Myers Squibb is one of several that go commendably further, avoiding benefits for executives that are unavailable to other full-time employees.
There are shades of generosity, even among peers. While JPMorgan Chief Executive Jamie Dimon gets more than $160,000 of jet benefits, counterparts Mike Corbat at Citigroup and James Gorman at Morgan Stanley must reimburse their employers. But in practice that means paying only for the costs the company hasn’t already covered, such as fuel and landing charges. Goldman Sachs is tougher: Boss David Solomon and other executives must fund personal air travel in full, and their guests are charged at least the going rate for a first-class commercial flight.
Meanwhile, it’s not always the biggest companies that are the most generous. IHeartMedia, a recently bankrupt digital-radio company about to return to the stock market, last year gave boss and MTV founder Bob Pittman — plus his family — just over $700,000 worth of private plane travel on the company dime.
These amounts are trifling set against eight-figure salaries and bonuses. That’s precisely why executives should pay their own way for anything other than business trips, even when the company thinks it's a question of security. A leader who doesn’t probably has too much sway over the board. They also risk becoming a target for those who’d like to see the financial elite brought down to earth with a bump.