Few elements of CEO compensation get investors' and employees' blood boiling more than personal use of private jets, helicopters and other corporate aircraft. Generally, such expenses are only a minimal portion of CEO pay, but they loom large in the minds of critics because, by definition, personal time in the private jet is a luxury that does nothing productive for the company.
Here are the 12 CEOs from the world of pharmaceuticals who spent most personal vacation time on company-paid-for private aircraft, according to SEC filings. They are ranked by cost of airtime.
DrugAir's Frequent Fliers:
- Mylan: Robert J. Coury, $535,590
- Abbott Labs: Miles D. White, $176,560
- Pharmaceutical Product Development Inc.: David L. Grange, $136,832
- Amgen: Kevin W. Sharer, $126,478
- Johnson & Johnson: William Weldon, $89,796
- Pfizer: ex-CEO Jeff Kindler $86,536
- CVS Caremark: Thomas M. Ryan, $71,872
- Pfizer: current CEO Ian Read, $67,982
- Talecris: Lawrence D. Stern, $29,375
- Merck: Richard T. Clark, $6,805
- Cephalon: current CEO J. Kevin Buchi, $1,519
- Warner Chilcott: Roger M. Boissonneault, $808
You have to ask, where is the CEO going? It's very hard to rack up that much if you flew commercially. How could you spend that much on personal use? Where has the CEO been?There are two justifications that drug companies give for allowing their CEOs to take free jet trips: It's a perk they need to attract and retain leadership talent; and it's for security reasons (drug CEOs are often targeted by animal rights protesters). The security policy sometimes extends to the executives' families, such as in the case of Pfizer (PFE), which requires its chiefs loved ones to go on vacation via Pfizer's fleet of nine different aircraft.
The problem with this argument is that security is generally stronger at commercial airports -- due to the actual threat of terrorism -- than it is at small private airfields. And most companies do not believe that a private jet is a required tool of the job. Here's a list of drug companies that do not pay for their CEOs to fly private for personal reasons:
Grounded! Pharma's No-Jet Club:
- Akorn Inc: Raj Rai
- Allergan: David Pyott
- Amylin: Daniel M. Bradbury
- Apricus: Bassam B. Damaj
- BioMarin: Jean-Jacques BienaimÃ©
- Bristol-Myers Squibb: current CEO Lamberto Andreotti
- Bristol-Myers Squibb: ex-CEO James M. Cornelius
- Forest Labs: Howard Solomon
- Gilead: John C. Martin
- Hospira: Christopher B. Begley
- Impax Labs: Larry Hsu
- Integra LifeSciences: Stuart M. Essig
- Eli Lilly: John Lechleiter
- Medicis: Jonah Shacknai
- Par Pharmaceuticals: Patrick G. LePore
- Pozen: John R. Plachetka
- Seracare Life Sciences: Susan L.N. Vogt
- Valeant: J. Michael Pearson
- ViroPharma: Vincent J. Milano
- Walgreens: Gregory D. Wasson
- Watson Pharmaceuticals: Paul M. Bisaro
Unsolved Mysteries of the Air:
- Walgreens: President of health & wellness Hal Rosenbluth has a sweetheart deal with his employer in which Walgreens pays $1.2 million in charter fees for the Hawker 900 that he owns and uses for business trips and as his "flying honor bar."
- Cephalon: former CEO Frank Baldino, Jr.: Reimbursed the company $79,188 for personal use of the jet last year, per a company policy that allows executives to use the jet for vacations as long as they pay for it out of their own pockets.
- Medco: CEO David B. Snow Jr. uses the corporate aircraft but not for personal use; Medco does not disclose value of his business use of private aircraft.
- Charles River Labs: No dollar measurement given. CEO James C. Foster uses private jets on "infrequent occasions," the company says. "Mr. Foster is permitted to utilize the Company-leased aircraft for non-business purposes. Mr. Foster reimburses the Company for the full incremental costs of such usage."
- LabCorp: CEO David P. King can use the corporate jet "for both business and personal trips; however, personal use of the corporate jet is strongly discouraged ... in 2008, 2009 and 2010 none of the named executive officers had any personal use of the corporate jet."
- Walgreens Paid $1.2M for High-Flying Exec's "Honor Bar"
- Frequent Flyer: Mylan Paid $536K for CEO to Use Private Jet for Personal Reasons
- DrugAir Why Pfizer Execs Are Addicted to Their Fleet of 9 Private Aircraft