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Delayed flights. Lost bags. The shoe dance at the security gate.
There's an easy way to avoid all of these commercial-airline indignities: Befriend, or become, a corporate big shot. The skies get a lot friendlier when you're a CEO.
As commercial flying has become more painful, corporate jets have become a catch-all perk for top executives. CEOs have had access to the company plane for some time now, but these days the jets are being used more than ever to ferry friends and family on mundane trips. All, of course, at the expense of shareholders.
Exhibit A: Edward Mueller, who was appointed the CEO of the telecom company Qwest Communications (Q, news, msgs) in mid-August.
Qwest is based in Denver, and Mueller moved from the San Francisco area to take the job. His stepdaughter wanted to finish high school in California, but that's a long way from Denver. So by late August an amended employment agreement emerged that allows Mueller's stepdaughter and his wife to commute between California and Denver on the company jet through the end of June 2008.
Most corporate-plane usage agreements require the CEO to be on the flight with family members, but Mueller's family can fly whether he's on the plane or not. "Most of us didn't even have a car to get to school, and she has to get a corporate jet?" says footnoted.org's Michelle Leder.
Squeezing shareholders
Given what Mueller makes, you might think he'd be able to afford the cost of the flights on his own. Mueller gets a salary of $1.2 million and a "target bonus" of $2.4 million, plus restricted stock worth $7.5 million and a $5,000-a-month housing allowance, among other perks.Daniel Pedrotty, a corporate-governance expert at the AFL-CIO Office of Investment, wonders why CEOs who are so well paid can't shoulder the cost of private air travel for family members. "That's why we pay them these handsome salaries," he says. "But these CEOs are taking shareholders for every penny they can get. It's almost like there is no shame anymore."
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Pedrotty thinks the money that companies like Qwest spend on private air travel for CEOs and their families should be returned to shareholders as dividends or reinvested in the company for long-term growth.
"Instead, they are squandering it for something that does nothing to help the performance of the company," he says.
Qwest spokeswoman Diane Reberger says the company's employment agreement with Mueller is fair and reasonable. "We would not characterize this usage as commuting," she says. "The purpose is to allow her to use the corporate aircraft, as needed, for occasional visits to Denver during the school year."
Friends and family
Qwest isn't alone in allowing family members free use of the corporate jet for personal travel when an executive isn't along for the ride.A 10-year employment contract made public in late September allows Tyson Foods (TSN, news, msgs) board chairman John Tyson -- whose company is the world's largest processor of chicken, beef and pork -- to put on a flight any "additional passengers" he wants, as long as there is room. That includes friends. The employment agreement makes clear that Tyson "need not be one of the passengers." He's allowed to book 120 hours of this kind of personal use of the company aircraft per year.
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CEO perks gone wildCompensation for top executives includes everything from wardrobes to wine collections.
Once again, it's not like Tyson doesn't have the funds to splurge on plane tickets for friends and family. Last year, he made $1.1 million and had options worth at least $12 million, by the company's estimates. He made more than $5 million in salary, bonus and other compensation in 2005. Tyson, by the way, also gets a car, secretarial support, a home phone and Internet connection, and country-club dues under his new contract.
Continued: 'Unending sense of entitlement'
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