June 10, 2009— -- As hordes of Americans watched their retirement savings disappear and their home values plunge after the economic crisis started in September, many corporate CEOs rode high, literally.
"Equilar's most recent research suggests a reluctance on the part of companies to eliminate or reduce aircraft perks," the report said.
So how much do these fancy jets cost each company? In 2008, the median value of CEO travel for the year was $141,477, up from $109,743 a year earlier. Equilar notes that high fuel prices might have contributed to part of that increase.
But apparently, more CEOs took advantage of the jets last year. Equilar said 79.2 percent of those Fortune 100 CEOs got jet benefits last year, up from to 74.7 percent in 2007. Some companies have since announced plans to cut back on jet use.
Some CEOs used their jets more than others. According to Equilar's review of Securities and Exchange Filings, the top 10 users, according to 2008 value of jet expenses, were:
These big companies often argue that it is necessary to fly executives and their families around on private jets. This is not a lavish perk, they say, but a safety and security requirement as well as a time-saving tool for the busy leaders.
Companies Change CEO Jet Travel Policies
As the economic crisis has grown worse, some companies changed their policies.
GMAC, whose CEO travel expense was more than four times higher than the next closest company, said that once it took government TARP dollars "all personal and business travel on company aircraft ceased." Before that, the company had leased usage on GM's corporate aircraft, a spokeswoman said.
MetLife also changed its policy, saying at the end of March that "the company's policy that previously required the chief executive officer to use the Company's aircraft for all travel, personal as well as business, was revised. The company's policy no longer requires the chief executive officer to use the company's aircraft for all personal and business travel."
Pepsi and Sears made similar cutbacks in corporate jet use and reimbursement by their CEOs.
But the efforts to trim travel expenses have been a bit murky for several big companies, the auto companies in particular.
An April 3 filing with the SEC revealed that in December 2008 Ford ended its own in-house private jet facilities as part of a process to sell its corporate jets. However, company policy still doesn't allow CEO Mulally to fly with the rest of us on commercial airlines, "due to security concerns." So instead, Ford charters a private jet for his use.
"First, the policy is intended to ensure the personal safety of Mr. Mulally, who maintains a significant public role as CEO of Ford," the company said. "Second, use of private aircraft ensures his availability and maximizes the time available for Ford business."
General Motors had also required former CEO Rick Wagoner and now current CEO Fritz Henderson to use corporate aircraft for personal as well as business travel. The decision was the result of "the recommendations by an independent third-party security study."
GM would also pay for their spouses to travel with them. However, after taking money from the federal government, the now-bankrupt company changed its policy.
As of Jan. 1, 2009, Wagoner, Henderson and others "are now permitted" to fly first class on commercial airlines. The company would also pay for their membership at private airport lounges, also for security reasons. Nothing in the new policy prohibited private-jet travel but just allowed them to fly commercially as part of a plan to divest ownership in private jets.