Walgreens Paid $1.2M for High-Flying Exec's "Honor Bar"
Walgreens (WAG) paid $1.2 million to fly president of health & wellness Hal Rosenbluth around in his personal private jet in 2009 and 2010, according to an SEC disclosure. The executive once referred to the plane as his "flying honor bar." The flights occurred even though Walgreens told the SEC that "The Company's policy is not to pay for any personal use of chartered aircrafts." All other Walgreen's executives flew on United Airlines, the company's proxy form states.
The arrangement is even more unusual because Rosenbluth owns the jet and the company pays him for the privilege of using it, the company said.
Rosenbluth came to Walgreens when it acquired his company, Take Care Health Systems, in 2007. The 358 walk-in clinics in 18 states are now part of Walgreens. Per the proxy:
A critical consideration in the acquisition was the retention of Take Care's Chairman, Hal Rosenbluth ... Mr. Rosenbluth, now President, Health and Wellness, travels extensively in connection with his duties, frequently on a private aircraft that is owned by him.
Walgreens pays two companies, Talon Air and World Link Jet Charter, to operate Rosenbluth's jet, and those companies in turn pass a cut to "an entity controlled by Mr. Rosenbluth," who owns the plane:Walgreens' private jet expenses:
- Talon Air : $845,000
- Of which pocketed by Rosenbluth entity: $531,000
- World Link: $345,000
- Of which pocketed by Rosenbluth entity: $298,000
- Total spent by Walgreens: $1.19 million
- Total taken by Rosenbluth entity: $829,000
... the truth is, he often flies to several cities in one day and doesn't have time to wait in airport security lines.
... "There are usually 10 of us on the plane," he says. "In the morning, it's like a flying office; on the way home, it's a flying honor bar."The proxy does not make clear why Rosenbluth has to do so much traveling when his colleagues do not. Indeed, in 2009, Rosenbluth's flying was relatively modest, per the Walgreens proxy of that year:
In fiscal year 2009, the Company paid Talon Air approximately $230,000 for the charter of Mr. Rosenbluth's aircraft for his business travel, and Mr. Rosenbluth, in turn, received approximately $126,000 from Talon Air.At other companies that allow executives to use private jets costs tend to be less than $100,000 per year. Rosenbluth will retire from Walgreens in April, the company said in February.
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