The big boss likes private jets – especially in the United States where the distances justify frequent air travel. Why bother standing around for hours in line at the airport when you can arrive 15 minutes before your own plane leaves, which is generally much more comfortable? The temptation is strong, and the health crisis has provided the perfect justification. Global traffic increased by more than 20% in 2021, and the big players in the sector claim to have increased their customer numbers by 50%.
This is understandable for business travel, with airlines struggling to get back to their pre-Covid traffic, but less so for family trips. However, this is what the Financial Times found in listing companies' private jet expenses for their executives for "personal reasons." Meta, the parent company of Facebook, spent 1.6 million dollars (1.5 million euros) on private jets just to transport the CEO Mark Zuckerberg. James Taiclet, CEO of Lockheed Martin, gets flown to his country home. In total, personal travel expenses paid by companies increased by more than 35% between 2020 and 2021, according to investor advisory firm ISS.
Aerial debauchery
This aerial debauchery will not jeopardize the bank accounts of these flourishing companies, but it is shocking and troubling. With bosses' salaries rising in line with the stock market in 2021, routinely exceeding the 20 million dollar mark in the United States, we might ask ourselves whether these fortunate people also need the company to finance their Florida vacations. Add to this the disastrous carbon footprint of such a practice, and one wonders how much boards of directors know about their own companies' environmental, social and governance commitments.
The private jet is actually a pretty good indicator of corporate management oversight going astray. When the private equity firm KKR learned in 1988 that the CEO of RJR Nabisco was using the company's jet to fly his German shepherd, they knew it was time to sell and dismantle the company.
Since then, shareholders have made this an indicator of good management and integrity on the part of the board of directors. But the boards are letting their guard down. The head of the Norwegian sovereign wealth fund, Nicolai Tangen, stated last May that "corporate greed [is] reaching a level that we haven't seen before." When the jets get back, the wolves of Wall Street can sharpen their teeth.