‘Private plane, a fairly good indicator of corporate governance skew’

TheThe big boss loves private jets. Especially in the United States where distances justify frequent air travel. Why bother waiting for hours in queues at the airport when you can arrive a quarter of an hour before your private plane leaves, with greater comfort overall. The temptation is great and the health crisis has made valuable arguments. Global traffic increased more than 20% in 2021 and major players in the sector claim to have increased the number of their customers by 50%.

That’s understandable for business travel, in the face of airlines struggling to regain pre-Covid traffic, let alone going with family. However, this is what financial times, Which lists corporate spending on executives’ private jets for “personal reasons”. Meta, the parent company of Facebook, has spent $1.6 million (1.5 million euros) on private planes just to fly its chief, Mark Zuckerberg. Relocated James Ticklet of Lockheed Martin to his country house. In total, personal travel fees paid by companies increased more than 35% between 2020 and 2021, according to investor advisory firm ISS.

Air debauchery

This air debauchery won’t jeopardize the accounts of these thriving businesses, but it’s shocking and troubling. When the salary of chiefs increases at the rate of stock exchange development in 2021, as salaries typically, in the United States, exceed the $20 million threshold, one wonders if those lucky ones also need the company to fund their own Florida. vacation. If we add the disastrous carbon footprint of such practices, we can question the level of knowledge boards have about their company’s commitments to social, environmental and governance matters.

A private jet is also a fairly good indicator of the stewardship drift of a company’s management. When investment fund KKR learned in 1988 that the president of RJR Nabisco was using the company to travel on a German Shepherd, they realized it was time to sell and break up the company.

Since then, shareholders have made it an indicator of good governance and board integrity. lowers his guard. The head of the Norwegian sovereign wealth fund, Nikolai Tangin, confirmed this last May “Employer greed is reaching unprecedented levels”. When the planes return, the wolves of Wall Street can sharpen their teeth.