Executives are using private jets, so what?

By: ispeculatornew
Date posted: 01.28.2009 (4:00 am) | Write a Comment  (2 Comments)

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I am usually a fairly moderate person and while I would not consider myself to always agree with political right views, I usually do. While I do not usually agree with left wing views regarding the economy, I can usually understand the logic behind them in cases involving unions for examples. I do not often agree, but I can have a conversation with an opponent and get their point. But recently, especially in this financial crisis, I have been increasingly hearing the arguments and accusations towards the high paid executives for using corporate private jets instead of using couch seats on commercial airplanes.

There have been numerous accusations but the most vocal ones have come during the very public hearings of the US auto executives. I will not stand here and say that their actions over the past few years were justified, but to blame them for the taking the trip from Detroit to Washington by corporate jet instead of by driving is ridiculous in my opinion and yet we have very rarely heard any opposite opinion in the media.

However, the calculations seem so easy to understand here. Let’s not argue (at least not right now) on the pay of executives and if it is justified or not. But let’s just take raw numbers. Imagine that an executive has an annual salary of $10 millions. Could be higher or lower but let’s use that number. Ok so imagine that our executive has no vacations, here is the breakdown:

Annual salary: $10,000,000 USD
Weekly salary: $192,308 USD
Daily salary: $38,462 USD

Now let’s just count it down. Is you use your car, it will obviously take a while to go, perhaps half a day, which is worth about $20K. And the same reasoning works for commercial airlines. Even if the flight was to cost $20K, wouldn’t it still be worth it? Personally, I would prefer having that executive, even if paid by the government as in many banks right now, to be working on a recovery plan for his bank than waiting in line in an airport, I would feel that my money is better used if he can actually be productive while working aboard his jet.

Is the executive better than me? I would think not! But is his time worth more thann mine? Economically? Absolutely!! Do you look down on someone paying others to clean their house? How is it different really? I’m not saying there is no abuse but generally I think it is well used…What do you think? Don’t you agree that the (mostly) left wing media often only shows one portion of the story?

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2 Comments

  1. Comment by Chad @ Sentient Money — January 28, 2009 @ 6:48 am

    Obviously, the private jet trips to DC don’t matter very much in the greater scheme of things. However, it’s kind of like wearing a suit to an interview. Wearing the suit really doesn’t matter, as it has no bearing on your abilities, but 98% of employers wouldn’t hire you if you didn’t wear one. Another example; you don’t drive to your friends house in your Mercedes and ask for a handout if he drives a Ford.

    What I will argue about is how valuable an executive’s time is. Based on the massive failure of executives at 90% of our banks and 100% of our auto industry, I would have to say it doesn’t take a very special person to run these companies, as their incompetence knows no bounds. The mistakes they made are mistakes most 1st year finance students wouldn’t make. On top of that Buffett seems to do fine by hiring CEOs for not even half the cost of these guys. Also, he doesn’t give them private jet access. Obviously, CEO/executive skills aren’t that special and the greatest capitalist of our time isn’t concerned with saving their time with private jet access, so their perks are somewhat suspect.

    Concerning the media, I will agree that certain media outlets are biased, but it is by no means limited to the left.

    CNN = left leaning
    MSNBC = very left
    Fox = very right
    NY Times = left leaning
    Wall Street Journal = right leaning
    AM Radio = Almost 100% right

    I’m tired of the argument made that suggests the right has no voice. If you want to argue that it’s wrong to lean either way, I will support that, but the right has plenty of voices. Saying, the “left wing media”, is just a sound bite used by political pundits because it is easy to say, remember, and most people can’t think for themselves…so they just accept it.

  2. Pingback by Linkstuff For Jan 30, 2009 — January 30, 2009 @ 7:13 pm

    […] The Intelligent Speculator wonders so what if executives are using private jets? […]

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