$ 17 Million – And He Can’t Buy a Plane Ticket?

$ 17 Million – And He Can’t Buy a Plane Ticket?

In the wake of the merger of American Airlines and US Air, the CEO’s of both airlines made out quite well, thank you.

US Air CEO Doug Parker will receive stock worth approximately $16 million at today’s value. He will continue as the CEO of the combined airline.

American CEO Tom Horton doesn’t get to run the new airline, and will instead retire, so he received a his own going away gift – a package worth $17 million, plus free airline tickets for life for himself, his wife and “eligible dependents” (whatever that means).

The next time you find yourself merged into an airline coach seat the size of a sardine can, you can probably imagine that Horton’s free tickets are up there in the front of the plane, where leg room, wider seats and fawning service live on.

As irritating as this is, it is the “new normal”, as Directors shower their CEO’s with these outrageous perks. When Sam Palmisano retired as CEO of IBM, the company announced earlier this year that they were providing rent and administrative support in an outside office space for him. The kicker is that they were also spending over a million dollars to renovate said space — that’s quite an office for a guy who no longer works for the company, and has untold millions in compensation in the bank.

Merrill Lynch encountered a firestorm of criticism  when they spent $1.2 million to renovate John Thain’s office at Merrill Lynch, when he ascended to the CEO position. The spending was seen to be egregious because it came at the time of the financial crisis, when Merrill’s value was tanking fast.

But this type of spending is egregious no matter when it happens — and it is a sad commentary on the money-grubbing sense of entitlement of too many CEO’s, and the lack of sense displayed by the Directors of these corporations, who are supposed to be looking after the interests of shareholders.