Time-sharing at the top…

October 20, 2006

gulf.jpegEarlier this week, General Electric (GE) filed this 8-K which seems to have further tweaked the corporate jet policy for top executives. As the filing notes, it entered into a time-share agreement with Vice Chairman Lloyd Trotter that requires him to pay for

actual expenses of each specific flight to the maximum extent permitted under Federal Aviation Administration rules, which expenses include and are limited to: (a) fuel, oil, lubricants and other additives; (b) travel expenses of the crew, including food, lodging and ground transportation; (c) hangar and tie down costs away from the aircraft’s base of operation; (d) insurance obtained for the specific flight; (e) landing fees, airport taxes and similar assessments; (f) customs, foreign permit and similar fees directly related to the flight; (g) in-flight food and beverages; (h) passenger ground transportation; (i) flight planning and weather contract services; and (j) an additional charge equal to one hundred percent (100%) of the expenses listed in clause (a) above.

That’s different from the deal that GE spelled out in this 8-K that was filed back in June 2005. While that 8-K spelled out the same expenses as outlined in the more recent filing, top executives were only required to pay when their usage exceeded $200K a year. According to the 8-K, that was a change from an earlier policy that allowed vice chairman unlimited access to the corporate jet. Back when GE put this in place, I remember reading several articles about this change, but can’t seem to find any of them this morning.

Maybe this clamping down has something to do with the cost-cutting at NBC Universal earlier this week. Then again, maybe not. But when a company like GE applies additional brakes on an executive’s use of the corporate jet, it’s worthy of a rare footnoted.org gold star.

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