[Pen-l] Golf and Corporate Jets

[michael perelman <michael@xxxxxxxxxxxxxxxxx>]

In light of the furor regarding corporations on the dole spending money 
on gold tournaments, I thought that I would post a part of my discussion 
of golf from my book: The Consfication of American Prosperity.

David Yermack of New York University's Stern School of Business produced 
a paper with the delightful title "Flights of Fancy: Corporate Jets, CEO 
Perquisites, and Inferior Shareholder Returns," in which he investigated 
the relationship between this particular luxury and corporate 
efficiency.  He found that the cost of corporate jets for CEOs who 
belong to golf clubs far from their company's headquarters is twoâthirds 
higher, on average, than for CEOs who have disclosed air travel but are 
not longâdistance golf club members (Yermack 2004).

Yermack's paper reported that "more than 30 percent of Fortune 500 CEOs 
in 2002 were permitted to use company planes for personal travel, up 
from a frequency below 10 percent a decade earlier."  Since Yermack's 
study, the problem has continued to escalate.  Between 2004 and 2005, 
the reported value of personal use of corporate aircraft increased 45 
percent, according to government filings of the 100 largest public 
companies (Fabrikant 2006).

more at:

http://michaelperelman.wordpress.com/2009/03/01/golf-and-corporate-jets/

--
Michael Perelman
Economics Department
California State University
Chico, CA
95929

530 898 5321
fax 530 898 5901
http://michaelperelman.wordpress.com
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