Due to government pressure, TARP-supported companies revamped policies regarding luxury expenditures. TARP, the government’s Troubled Asset Relief Program, includes several banks and the new guidelines referred to expenses involving entertainment, company events, office renovations, and the use of private jets. However, even with the alterations to protocol, many of the executives are still enjoying private aircrafts.
While AIG banned personal use of corporate jets for everyone in the company, Citigroup CEO Vikram Pandit pledged to no longer use the corporate jet for his personal use—all others at Citigroup are allowed in emergency situations though. An ambiguous alteration by Chrysler stated that employees would no longer be flying first-class on “short commercial flights.” However, there was no specification of what “short” entailed and apparently first-class is still available on all other flights. Another minimal change was at PNC, whose policy now states senior executives need to get permission before using the company jet for private use—and once approved for personal use—those executives will need to begin repaying the company.
An even more vague statement regarding private jet usage came from jet-loving Bank of America. The new guideline states that they will continue to encourage the use of corporate jets on business trips because of “safety and efficiency reasons” and that personal use outside of business will be permitted for emergencies. What constitutes an emergency was not addressed.
A head of one of the private-jet companies stated that the use of private jets had recently increased among executives due to their fear of catching swine flu from commercial flights. That surely must be what management had in mind as an “emergency.”