Rise of the Corporate Plutocrats
The morning sun glints off the sleek steel contours of the Cessna Citation X, a private jet gracing the tarmac at Santa Monica's airport. Inside are eight wide leather seats, equipped with individual DVD players and served by a well-stocked snack bar. It's undoubtedly a fine way to fly: The Citation's prosperous passengers don't have to deal with crowded parking garages, incompetent ticket clerks or getting their shoes X-rayed. They step aboard and are whisked from Los Angeles to New York in fewer than four hours.
"You sure get used to it," says Glenn Hinderstein, vice president of Netjets Inc., whose company supplies these private aircraft to executives at General Electric, Prudential and many other corporations. "It's a drug there's no Betty Ford for."
Not so long ago, use of a company jet was a rare privilege reserved for top corporate officials--the chief executives, presidents and chairmen whose skyrocketing pay has been well-documented in recent years. (A generation ago, the average chief executive at a big corporation made about 40 times what the average worker did; today it's nearly 400 times as much, says vice dean of faculty Kevin J. Murphy of USC's Marshall School of Business.)
Increasingly, however, those plush leather seats are being occupied by vice presidents, general managers and other second- and third-tier execs. The spreading around of private jet rides is among the more obvious emblems of a profound development in corporate America over the last 20 years: the enormous swelling in pay and privileges for a burgeoning stratum of executives, and their concomitant distancing from the people who work under them. Today, it's not just the boss, but those second, third or fifth in command who pull down seven-figure salaries, own multiple homes and stay in hotels where rooms cost more than most mortgage payments.
Mehdi Eftekari, general manager of the Beverly Hills Four Seasons Hotel, can tell you all about it. He estimates that some 80% of his clientele are corporate officials whose companies pay for their $700- to $3,000-a-night suites. The most modest come with a DVD player, a giant flat-screen TV, a living room with a wet bar and televisions in each of the two bathrooms. Frequent guests can store extra clothes or toiletries at the hotel to lighten their luggage. A staff VIP liaison tracks their personal preferences, so that when they arrive, their rooms are stocked with favorite drinks, snacks and magazines, as well as bathrobes monogrammed with their initials. The hotel even makes sure the bed is equipped with their preferred pillows.
