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No Free Ride: Unlike Many CEOs, Cephalon Chief Pays Dearly for Use of Private Jet

Did Cephalon (CEPH) CEO Frank Baldino Jr. test his Nuvigil sleep disorder pill on his own jet lag last year? He spent $63,835 using the company's private aircraft for personal use in 2009, according to page 28 of this SEC filing. It didn't do him much good -- the FDA rejected Cephalon's application for jet lag as a new approved use of Nuvigil.

The year before Baldino reimbursed the company for $89,065 spent using the jet for his own vacation time.

The reimbursements highlight an unusual policy between Cephalon and its CEO. At most pharma companies, CEOs are "required" to take the private jet for personal use, often for security reasons (sometimes they are targeted by animal rights activists). That's the case at Pfizer (PFE), for instance, and at Johnson & Johnson (JNJ), where CEO William Weldon was given $62,847 worth of free vacations on the company's jet.

Alternatively, some companies limit top executives use of aircraft for personal reasons. Eli Lilly (LLY)'s management made no use of the jets last year, for example, even though they were available. And Gilead Sciences (GILD) has a no-private-jet policy.

Baldino also took a total pay cut last year, earning $11.1 million in cash, stock and options, down 24 percent from 2008.

The frugality of both Cephalon and Gilead when it comes to jet travel creates doubt around the notion that companies must give their leaders these perks in order to retain talent. That doubt becomes larger when you look at U.S. businesses as a whole: A recent study by the Corporate Library showed that only 40 percent of the S&P 500 companies allow their CEOs on private jets. Related: