U.S. executives get additional benefits for business jets under Covid

Major U.S. companies, including Morgan Stanley, Yum Brands and PepsiCo, expanded private jet privileges for senior executives last year due to the Covid-19 pandemic, according to new regulatory documents.

Yum Brands has given its chief executive David Gibbs the authority to approve personal travel on the company’s jet for other executives, and Morgan Stanley has allowed certain executives to use the company’s plane for personal use .

Delivery company UPS gave Brian Newman, its chief financial officer, the use of a private jet for personal reasons due to the pandemic, but said the benefit “shouldn’t be a regular practice.”

Due to the pandemic, the cost of personal travel for PepsiCo chief executive Ramon Laguarta doubled in 2020 compared to the previous year.

Bubble wrap maker Sealed Air has allowed executives to use private jets, including to travel between its North Carolina headquarters and places “where the executive’s family was staying on site.” The policy stopped at the end of 2020.

Although executives’ private jet travel has aroused public ire in the past, the pandemic “is the only time it probably makes sense to do it,” given the limited availability of commercial flights in 2020, David said. Yermack, professor at the Stern. School of Business at New York University which studied private jet travel for executives.

However, spending on planes raises questions about the extent to which jets were used for vacations, he said. “It’s not the plane, it’s the vacation trip itself that I find interesting,” he said. “Why are they going on vacation?”

Dieter Waizenegger, executive director of CtW Investment Group, agreed that the expanded privileges of jets during the pandemic seemed “reasonable,” but said it was disappointing that companies’ concerns for the health of executives did not always extend frontline workers. He pointed to Yum Brands, which this year challenged a CtW shareholder proposal calling for a feasibility study to extend paid sick leave to all its workers.

Yum Brands and Morgan Stanley declined to comment.

UPS did not change policies regarding the personal use of private planes, and only one exception for Newman was approved “at the start of the pandemic due to the significant uncertainty surrounding commercial air travel at the time. The delivery company said.

Business spending on private jets has increased over the past year. The median value of spending by Fortune 100 companies on private jets rose to $ 125,796 for companies with fiscal years end August 31, 2020, according to Equilar, a salary data company. The figure was up 9% from 2019 and in line with $ 128,075 spent in 2018, Equilar said, adding that expense totals vary due to changing jet fuel costs.

US disclosure rules require companies to report various benefits that companies give to their executives that total $ 10,000 or more. In addition to private jet travel, companies disclose payment for executive club memberships or financial planning.

Overall, private jet flights fell during the pandemic. Teterboro Airport, which is close to Manhattan and is one of the busiest private jet landing points in the United States, saw flight departures drop 50% in 2020 year-on-year previous, according to Argus International, an aeronautical rating agency.

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