Why the jets.....(GM, Ford, etc.)

[Aviation Pro]

When someone rises to the position of CEO in a major corporation there is an assumption that that individual is of a certain monetary value to the organization. This position is known as a "key man" in the corporation and the stock value of the organization is tied to that person. Thus, the board of directors, acknowledging that the loss of that individual would adversely affect the value of the company, prohibits that individual from doing certain activities. Those activities may include, but are not limited to, piloting their own private aircraft, skydiving, SCUBA diving, or flying commercially (there is also a very large insurance policy placed in that person's name with the corporation assuming the role of the beneficiary).

Thus, corporations invest into assests such as corporate aircraft in order to transport their key man around.

(Frankly, I think corporations should rethink this idea and adopt another one: the graveyards of the world are filled with indespensible men and women).

[madrchsod]

1. don`t blind people with the truth......

the whole corporate jet thing was bullshit and everyone fell for it.back in the 60`s every corporation had a jet or a turbo prop...

[Occam Bandage]

2. I wasn't aware that private aircraft had a better safety record than commercial aviation does.

That's an interesting claim.

[ProdigalJunkMail]

5. the word you are looking for is 'false'

it is a false claim...private jets are a convenience and a luxury...some would say the cost of doing business...but a costly cost!

sP

[FormerDittoHead]

18. hmmm. Somehow I remember CEOs using HELICOPTERS too?

I support unions, but the OP has to give his rationalizations for CEO compensation a REST.

What I don't get is why the unions aren't at this time, actively calling for the CEO's to adjust their pay to ratios exercised everywhere else in the world.

As unions are at the forefront for fighting for worker pay, safety and benefits, why don't they take this opportunity when all of us are listening, to speak out on CEOs compensation and benefits?

The only thing I've heard from the hardcore union supporters here is the same right wing rationales for CEO compensation that we've heard since Reagan, and it simply doesn't ring true.

If you want to know what I think is WRONG with unions, it's the one-sided thinking which the OP demonstrates.

[Aviation Pro]

21. Not rationalizing, explaining....

...check out the last line of the OP.

[FormerDittoHead]

22. Oh for Pete's sake. Sorry.

I DID skip the last parenthetical sentence which negated the entire premise of the message up to that point and assumed it context on that and the many messages which followed.

Please take my message as a further negation of the argument which you refuted.

[ColbertWatcher]

3. The entire mindset behind the "king" of the corporation is outdated.

And, quite frankly, the "little king" CEO mindset enables the sociopath behavior.

There is no justification for their obscene salaries, bonuses, perks, etc.

It's time corporations get with the times and it's time for the stock holders to stop rewarding them.

[phusion]

25. BINGO

Why does a corporation need men like this at the "head" of the organization? It is a "little king" type of mindset. Seems to me that most corporations need to be radically restructured to respond to their real owners (stockholders) in a more egalitarian fashion.

[Aviation Pro]

28. The shareholders....

...and face it, the majority of shareholders are institutions, will continue to give a giant nod and wink to CEO compensation as long as stock values increase. Note that shareholders are starting to pull out there long knives during this period.

[90-percent]

4. Safety records private vs commercial

I may be out to lunch here, but I recall the safety record of small private aircraft compared to commercial aircraft is abysmal.

per travel miles, private planes are about as safe as a car. commercial aircraft have a statistically much much better safety record, statistically.

please, let somebody that really knows chime in.

[Aviation Pro]

6. You're not out to lunch when you compare General Aviation....

...to Commercial Operations. However, when you compare Business Aviation to Commercial the safety record in comparable. Some Bizjet operations operate under Part 125 and some under Part 91, which is a difference in level of maintenance and surveillance, but nearly all bizjet operations are run like a commercial operation.

For more information go to Professional Pilot magazine: http://www.propilotmag.com/

[Occam Bandage]

10. "Their safety record is comparable" is not a very good argument to defend the OP's assertion.

[Aviation Pro]

11. The language of aviation is different.....

...words like "comparable" and "equivalent level of safety" come to mind. If you compare this language to other technical skills that use esoteric verbiage (the medical profession for one) you'll see the same diagnostic characteristics: a common vocabulary that emphasizes the clinical as opposed to using hyperbole.

[TWiley]

7. They can't take a bus a their pay rate.

It is too expensive to travel any other way. The cost of a jet is likely offset by the amount of time wasted waiting around airports. They also travel with others and use the time for meetings.

[alarimer]

8. Flying commercially is very safe.

He is, however, in danger of dying in a car accident on the way to the airport.

The whole safety argument is just a bullshit excuse to continue living lavish lifestyles and sticking it to the little guy. Fuck those CEOS and their airplanes. I want their heads on a pike.

[goclark]

9. That was the one time they should have been smart enough

to think,"Maybe this would not look good to the public."

[The Velveteen Ocelot]

12. Many large corporations have a flight department if they can afford it.

There will be at least one small jet, like a Gulfstream or a Citation, available for the use of executives. Sometimes the plane is leased, but they will usually employ their own pilots. It's a pretty good job if you can get it. The reason for having their own airplanes is for convenience, especially if the execs regularly go to places that don't have frequent scheduled air service. You just get in the jet and go. For companies whose execs have to do a lot of traveling it can even be cost-effective (depreciation and operating costs being tax-deductible). However, when times are tough the flight department is usually the first thing to go. That's why it seemed so ridiculous that those guys took their corporate jets to Washington -- the car manufacturers have been hemorrhaging money for a long time, so even if it made sense to have a flight department at one time, it's stupid that they haven't cut back on that by now. And DTW is a major airline hub, so it's not like they were in Podunk and stuck having to take Southwest with three connections.

[Aviation Pro]

13. There is in fact an equation about efficiency levels of executives....

...who have access to their own aircraft. The value added multiplier is .75 when executives are on travel in company owned aircraft.

[tabasco]

23. LOL.

Lemme guess - a corporate executive put that equation together.

[Aviation Pro]

24. Actually, it was NBAA that put that together....

National Business Aircraft Association. Of course they promote the selling of Citations, Gulfstreams, Hawkers and the rest of the BBJ product line.

[Vickers]

14. Can anyone provide a link to a case where the death of the CEO in some

way caused the company's stock to catastrophically and irreversibly nosedive (no pun intended)?

Thanks in advance.

[lostnfound]

15. The problem with flying commercially is the time.

The CEOs time is considered very valuable, and having it wasted by waiting at gates while planes are delayed or waiting to go through airport security isn't useful. If one Fortune 100 CEO is meeting with his major Fortune 100 customer's CEO, they don't want to be two hours late, because the customer's CEO has something else in his schedule for that afternoon.

[rasputin5]

16. That is one small element, yes, but more important is time saving.

I'm a small businessman with my own plane (not a jet--I can't afford one), a twin engine Cessna that cost about as much as a new Cadillac. I can leave my house at 9 AM and be in my associate's office 550 miles away by lunchtime. If I had to fly commercially it would take about 9 hours of traveling.

[Aviation Pro]

20. 310? 414?

Yes, you're right, twins are in a buyers market right now, but even though I'm tempted to purchase right now, my decision not to buy is based more on factors other than initial cost. Now, if someone wants to give me a Cessna 400, I won't complain.

[rasputin5]

26. A 310Q. I looked at some 400 models, I think the 401 is a true joy to fly but

it's not very economical (and engine MOH cost a fortune with the turbos) and I rarely have more than 3 or 4 people with me.

[Aviation Pro]

27. The 310 is sweet....

...especially with the extended range. However, what's not sweet, IMHO, is the annual.

[rasputin5]

29. True but years ago I got an A+P license (not AI inspector) so I can do a lot of the

grunt work myself which I don't mind and my old buddy who I taught to fly 35 years ago is in inspector so...you get the picture. :D

[Aviation Pro]

30. Yep, one of these days....

...I'm going to force myself to get my A+P.

[rasputin5]

31. I'm sure the tests are way different nowadays. Back then it wasn't even called A&P, it was A&E

:D

[Turborama]

17. If they have to go for a private plane, why not one of these...

?

[Aviation Pro]

19. One of the "key man" clauses in nearly all executive contracts....

...states no flying in a single-engine aircraft. The assumption is that the engine will fail at some point and the pilot will have to execute a forced landing.