Monday, June 27, 2005
Lifestyles of the Corporate Elite
Gee, guys, we just don't have the money to both adequately fund your pension plan and still keep our business necessities:|
Some of America's largest and best-known corporations have been significantly underreporting the cost of letting their executives use company aircraft on personal trips, a pattern that has come to light through reports the companies have filed with the Securities and Exchange Commission, a recent enforcement case and a warning by a top SEC official.Amazing how extra perqs for the top brass get funded, while employee pension plans do not.
In reports filed with the SEC this year, some companies have put a higher price on past years' flights and disclosed that they were changing the way they determined the value of the benefit.
Bank One last year valued chairman and chief executive James Dimon's 2003 personal use of corporate aircraft at $30,889. Bank One is now part of JPMorgan Chase & Co., which recently reported that under the incremental cost method Dimon's personal aircraft use in 2003 cost the company more than five times that amount, or $160,590.
Invoking security "is a convenient justification" for executives to fly corporate planes on vacation, but one "that I don't think washes," said Vahid Motevalli, director of the Aviation Institute at George Washington University. "In terms of security of air travel itself or safety of it, I think the scheduled airline travel is going to be more secure and more safe."
(Source: Washington Post A Closer Look at Costs of the Corporate Jet, June 27, 2005.)