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| Author: | Yermack, D. |
| Title: | Flights of fancy: Corporate jets, CEO perquisites, and inferior shareholder returns |
| Journal: | Journal of Financial Economics
2006 : APR, VOL. 80:1, p. 211-242 |
| Index terms: | USA chief executive officers executive remuneration compensation shareholders share prices travel |
| Freeterms: | airplanes |
| Language: | eng |
| Abstract: | This paper deals with the perquisites (hereafter as: perqs.) of CEOs, focusing on personal use (here as: p-use) of company planes. There is descriptive statistics for a data set of 237 large U.S. firms during the 1993-2002 period. The sample includes Fortune 500 companies (in 2002) also covered by ExecuComp for at least from 1996 to 2002. For firms having disclosed this managerial benefit, average shareholder returns underperform market benchmarks by more than 4 per cent annually, a severe gap far exceeding the costs of resources consumed. Around the date of the initial disclosure, firms' stock prices drop by an average of 1.1 per cent. No significant associations are found btw. CEOs' perqs. and their compensation or percentage ownership, but variables related to personal CEO characteristics have significant explanatory power for p-use of company aircraft. |
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