Thanks to footnoted.org, we have an example of the kind of behavior that gives CEOs a bad name. Except this CEO isn’t feeding at the trough of the company he currently heads, but one he USED to head. Oh, and to top it off, the company is already in the sights of shareholder activists because of the disconnect between its performance (lousy) and its executive compensation practices (generous).
The company is Applebee’s International (APPB) and the miscreant is former CEO Lloyd Hill. Well, you can’t hold him solely accountable, and former SEC chairman Richard Breeden, whose firm, Breeden Partners, which owns 5.3% of Applebee’s stock, doesn’t. He addressed these comments to Douglas Conant, Campbell’s (CPB) CEO and chairman of Applebee’s compensation committee:
On 29 occasions from from April 2006 through January 2007, Applebees’s corporate aircraft flew into and out of Galveston, Texas, where former CEO Lloyd Hill happens to own a beach house. The nearest Applebees’s restaurant is more than 40 miles away. Though Mr. Hill ceased to be CEO in September 2006, company planes continue the Galveston shuttle.
The letter also goes through the gory details of Applebee’s deteriorating performance.
It worth reading the entire post at footnoted.org.
Now the CEO defenders like to dismiss anything regarding benefits as chump change, not worth discussing. And technically, they are right. The cost of these flights is at least two orders of magnitude less than Bob Nardelli’s departure package.
But this was disturbing enough to Breeden’s firm that they bothered obtaining flight records to ferret out the details. And the corporate elite is totally insensitive to the symbolism. The only “little people” who get to run their personal lives through the business are business owners, and even then, the IRS keeps a pretty close eye on the reasonableness of their business expenses. Why do top executives, who have not taken entrepreneurial risk, feel they are entitled to take as much as they can? This is the kind of behavior you expect from the heads of banana republics, not legitimate enterprises.
