Air Travel Heads List Of Perk Cutbacks For CEOs -NYSE Survey
May 18 2009 - 2:38PM
Dow Jones News
More than a quarter of CEOs have seen reduced access to
corporate jets and other high-end travel options, according to a
survey conducted by the NYSE Euronext (NYX).
Executives said the largest cut in "benefits and perks" over the
past yearwas in air-travel expenses, closely followed by club fees
and memberships.
Corporate-jet use has provided a focus for growing public and
political disquiet over executive compensation, notably in the
U.S.
The exchange group's survey of more than 270 global CEOs found
26% cited lower flight expenses as the main clamp on perks,
compared with 21% for membership fees and just 7% for stock
options. The survey was conducted in March and April.
The infamous use of private jets by U.S. auto executives seeking
federal aid on a visit to Washington D.C. last year triggered an
outcry. Other bailout recipients including Citigroup Inc. (C)
backtracked on plans to expand private jet use.
The public mood has coincided with a sharp drop in demand for
business jets as companies trimmed spending, forcing manufacturers
to shed staff.
The aerospace sector has lobbied hard to reverse the negative
perception, and Dave Cote, CEO of Honeywell Inc. (HON), signaled a
mood change was under way.
Honeywell supplies a number of business-jet manufacturers.
"There's been a lot less bashing," he said on an investor call
Monday, noting that critics in Congress and the union movement had
tempered criticism when considering the 1.2 million U.S. jobs tied
to the sector.
"I'm saying the sentiment has started to change [though] it
still makes people uncomfortable," said Cote.
Other executives have been unabashed about a perk they maintain
is essential to maximize productivity when covering geographically
disperse businesses. Joe Sanderson, the plain-speaking CEO of
poultry producer Sanderson Farms Inc. (SFM), noted last week that
combining an executive role with use of a corporate jet made him
feel as popular as Attila the Hun.
The NYSE Euronext survey also found the attractiveness of the
CEO role is expected to wane as expense reduction remains a lasting
theme beyond any economic recovery.
Respondents also anticipated keeping a tight leash on debt and
maintaining high liquidity as other defenses in what is expected to
be a long slog out of recession.
About 90% of CEOs surveyed described the U.S. economy as "poor,"
and less than half saw a recovery by the end of 2010.
Possible silver linings include improved merger and acquisition
opportunities, and a streamlined regulatory system, particularly in
the U.S.
-By Doug Cameron, Dow Jones Newswires; (312) 750 4135;
doug.cameron@dowjones.com; and Jacob Bunge, Dow Jones Newswires;
(312) 750 4117; jacob.bunge@dowjones.com