Air-Travel Perks Remain Constant Among CEOs

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By Che Odom

Jan. 27 — About 40 percent of S&P 500 chief executive officers—including those for Walt Disney Co., Starbucks and Tyco—use company-owned aircraft to get around, according to a Jan. 27 report by Equilar.

The median value of the aircraft perk was $65,316 for all named executive officers in 2014, while the top disclosed aircraft perk was $1 million, the report said. It added that many companies say their CEOs must use the corporate jet for security reasons.

For example, Walt Disney said in a Jan. 15 proxy statement that its CEO, Robert Iger, “is required for security reasons to use corporate aircraft for all of his personal travel.”

Equilar, an executive compensation research firm, found in a review of the proxy statements of S&P 500 companies that the popularity of aircraft perks for CEOs from 2012 to 2014 remained stable, after a dip from 2011 to 2012.

In 2014, 38.6 percent of CEOs in the S&P 500 received an airline or aircraft perk of some value, the Equilar report said.

Starbucks's Schultz

Starbucks Corp. disclosed in its 2016 proxy statement that CEO Howard Schultz reimbursed the company $96,523 for his personal use of company-owned aircraft, in a transaction approved by the audit committee.

According to the proxy statement, Starbucks in 2013 entered into an agreement with an entity owned by Schultz for use of an aircraft, paying $269,297 monthly rent for it.

Starbucks also entered into a hanger-space lease with an entity owned by Schultz, agreeing to pay $282,482 in 2015, the statement said.

Calls to Starbucks for comment were not immediately returned.

Walt Disney, Deere & Co

Among other companies that provide an aircraft perk:

  •  Walt Disney said it paid $277,489 in aircraft travel expenses in 2015 for Iger;
  •  Deere & Co. disclosed that it spent $43,482 for CEO Samuel Allen;
  •  Franklin Resources Inc. paid $54,982 for Chairman and CEO Gregory Johnson;
  •  Qualcomm Inc. spent $21,397 for President Derek Aberle's personal use of corporate aircraft; and
  •  Tyco International Plc. spent $147.873 for CEO George Oliver's air travel.

    Automotive Perks

    Similar to perks involving aircraft, automotive perks for CEOs have remained stable since 2012 after shrinking in popularity in 2011, the Equilar report said.

    According to the report, in 2014, 37.3 percent of CEOs in the S&P 500 received an automotive perk, while the prevalence of this perk for other named executive officers over the last four years has slightly declined, dropping 4.1 percentage points since 2011.

    Jim Kroll, a director in Willis Towers Watson's New York office, said in the Equilar report that when companies were forced to hold say-on-pay votes, they began trimming compensation packages of “low-hanging fruit” that could present potential problems with shareholders. These included automotive perks, he said.

    “[I]f a company were to disclose a benefit that appears large and is not transparently communicated, we may hear a grumble from shareholders or proxy advisors,” Kroll said. “But if a high expense is paid under the terms of a company-wide policy that would soften some of the blow.”

    Kroll could not be reached immediately for comment.

    To contact the reporter on this story: Che Odom in Washington at

    To contact the editor responsible for this story: Yin Wilczek at

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