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Study: US CEOs still fly in style despite economy

Published 06/09/2009, 04:05 PM
Updated 06/09/2009, 04:16 PM
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By Martha Graybow

NEW YORK, June 9 (Reuters) - Many highflying U.S. corporate chiefs are still enjoying the perks of personal travel on the company jet, even amid the global financial turmoil.

Throughout Corporate America, many companies require top executives to use company planes for all travel, including vacations. They argue it is a safety requirement for high-profile business leaders rather than a perk, and that private flights are more efficient for busy executives who don't have time to waste waiting in airports.

Some companies have stopped underwriting these personal flights in recent years amid shareholder scrutiny of executive pay practices, but overall CEO aircraft perks are showing no signs of fading, according to a study released on Tuesday by executive pay consultant Equilar.

The report found that the value of CEO airplane perks in 2008 was at the highest level in the last five years, with the median value for CEOs in the Fortune 100 -- the biggest 100 corporations -- jumping nearly 29 percent to $141,477 from $109,743 a year earlier.

Also last year, 79.2 percent of the Fortune 100 reported allowing personal use of corporate aircraft, up from 74.7 percent in 2007, Equilar said.

Equilar examined the imputed income derived from an executive's personal use of company aircraft. Business use was excluded.

Rising fuel costs in early 2008 may, in part, explain the increase in the cost of these perks last year, Equilar said.

But the pay consultant said its research "suggests a reluctance on the part of companies to eliminate or reduce aircraft perks."

The corporate aircraft has long been a lightning rod of criticism for company shareholders, and with the economy in turmoil, many lawmakers and average Americans also are expressing their fury.

Auto industry executives were lambasted last November after they flew by private jet to Washington to plead for U.S. government bailouts. The next time they headed back to Congress from Detroit, they traveled in hybrid vehicles.

The Equilar study cited both General Motors Corp , now in bankruptcy protection, and Ford Motor Co as two companies that are eliminating or reducing CEO aircraft perks.

After the intense criticism in Washington at the end of last year, GM said it would divest any interest in private aircraft. Ford said it would sell its corporate aircraft, though it said it would pay the costs of charter flights for CEO Alan Mulally's business and personal travel. (Reporting by Martha Graybow; Editing by Richard Chang)

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