By Joann S. Lublin
CEO perks are under pressure, but one keeps flying high:
personal travel on the company plane.
Despite recent curbs on fringe benefits like picking up tax
bills and paying for country-club memberships, more corporate
captains are taking personal trips on corporate aircraft at their
employer's expense--a perk that in some cases can rival salaries in
value.
An analysis by The Wall Street Journal and consulting firm Hay
Group found that CEOs at 142 companies enjoyed such flights in
2013, up from 122 companies in 2012.
One highflier was Kent J. Thiry, the longtime chief executive of
DaVita HealthCare Partners Inc. The Denver-based dialysis
specialist and medical-group operator valued his flights at
$677,113 last year, more than half the value of his salary.
The perk is "part of the larger board-approved pay package, and
it comes in lieu of other compensation," said company spokesman
Skip Thurman. He wouldn't elaborate on the trade-off.
Mr. Thiry gets personal use of a fractionally owned or chartered
corporate aircraft "for a fixed number of hours per year," the
company's proxy filing said. The filing didn't disclose that
number, but said the time on company planes lets the CEO work
longer hours.
Dollar General Corp. adopted a similar approach. The discount
retailer gives Chief Executive Richard W. Dreiling as many as 80
hours a year of personal flights unless the board's compensation
committee approves more, its proxy said. Goodlettsville,
Tenn.-based Dollar General valued those flights--mainly to and from
the CEO's second home in Pleasanton, Calif.--at $481,658 last year,
said spokeswoman Mary Winn Pilkington.
In the wake of the recession, shareholders activists took aim at
executive perks as symbols of excess at a time when cost cutting
was paramount. Many perks atrophied. But companies justify the top
boss's private use of the corporate jet as a time saver and
security measure.
"The perks that continue to thrive are those that have something
to do with the safety, health and well-being of the executive,"
said Irv Becker, Hay's national practice leader for executive
compensation. "It's all about being able to rationalize these to
the shareholder base."
Critics, however, question why well-paid CEOs can't cover their
own air travel.
"CEOs really like the corporate jet and are loath to give it up,
even for personal purposes," said Paul Hodgson, an executive-pay
specialist at governance consulting firm BHJ Partners. "I just
don't see why investors have to pay for it."
Halliburton Co.'s board decided that for security reasons CEO
David Lesar and his family must always travel on corporate
aircraft, according to the Houston oil-field services company's
latest proxy. The perk was valued at $463,329 last year.
Safety concerns arose from "a threat analysis by both an
external security company as well as Halliburton's
corporate-security department, " said Emily Mir, a Halliburton
spokeswoman.
CBS Corp. chief Leslie Moonves logged $533,527 in personal
travel on the corporate jet last year. The New York media company
declined to comment.
The biggest user of the personal-flights perk was Myron "Mike"
E. Ullman III , head of J.C. Penney Co. He took personal trips
valued at $913,488, more than his $810,606 salary.
Mr. Ullman returned as CEO early last year to shore up the
department-store chain following a disastrous turnaround attempt
under former Apple Inc. executive Ron Johnson.
For security purposes, the Plano, Texas, company requires him to
use corporate aircraft for all of his business and personal travel.
In addition, Mr. Ullman has long had a neuromuscular condition that
makes walking difficult. The company's proxy said use of the
aircraft makes him more effective.
Penney spokeswoman Kristin Hays said his personal flights on the
aircraft also reflect the suddenness of his return. He needed "to
fulfill prior commitments while also immediately jumping into his
duties to stabilize and restore JCPenney," Ms. Hays said in an
email.
Write to Joann S. Lublin at joann.lublin@wsj.com
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