““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Shine a Light on Your Flight Department, or Close It Down
"We like to keep a low profile for our jet use." I can't tell you how many times I've heard variations on that line since I arrived at Business Jet Traveler in 2004. It has been a constant challenge to find business jet owners and passengers willing to be profiled in our pages and companies that will go on the record about their use of private aviation. "The less said the better" seems to be the prevailing philosophy.
Many businesses do more to hide their jet use than just telling their executives to zip their lips. Some companies, for example, employ charter and jet cards largely because they don't want owned aircraft to show up as assets on the balance sheets that stockholders and board members will scrutinize.
In my opinion, all of these companies are making a big mistake. My late father, Chester Burger, spent most of his career advising public relations firms and departments, including those of the military services and government agencies. He was adamant that the only right way to do PR was to deal honestly and openly with the public, shareholders and employees.
If you're doing something wrong, he would tell his clients (and me), admit it as quickly as possible and stop doing it. If you're doing something ethical and justifiable, communicate the reasons and air the facts. Those are really the only two alternatives that make sense, he said. Any other option is an invitation to trouble down the road.
Obviously, there are cases where flying privately does not make sense and cannot be justified as a contributor to the corporate bottom line. If that's the situation at your company but you're employing business jets anyway, then you need to admit the mistake and stop using business aviation, not hide what you're doing.
But as we explained in Business Jet Traveler's "Bizav Advantage" special issue (October/November 2010), the vast majority of companies that rely on private aviation do so because it makes excellent sense for the corporation. It allows highly paid executives to use their time more efficiently, to go places airlines don't go, to conduct business meetings onboard and to do more deals in less time.
If you're reaping benefits like these at your firm, you should not be trying to conceal the fact that you're employing a powerful business tool. Instead, you should forthrightly explain to employees, shareholders and the public that you certainly do use business jets. And you should tell them exactly why.
It either makes sense or it doesn't.