After hearing an earful from lawmakers, General Motors dumped its corporate jets last year while in bankruptcy after flying top executives to Washington to ask for a federal loan. Well, GM’s brand new CEO Ed Whitacre still flies private thanks to his former employer, AT&T.
Whitacre, 68, negotiated a sweet lifelong deal with AT&T before he retired in 2007 that allows him to fly free on AT&T corporate jets for 10 hours a month – and that’s on top of his $158 million package deal. The free 10 hours are equivalent of two round-trip flights between his home in San Antonio and his apartment in Detroit.
The 10 hours of corporate jet flight time for Whitacre costs AT&T a hefty $20,000 a month, according to a filing with the U.S. Securities and Exchange Commission. The perk is now being seen as potential image problem for AT&T and GM.
Whitacre gets about $9 million at his job at GM, including an annual salary of $1.7 million. The Detroit automaker said he does not use AT&T jets for GM business.
David Lewin, a professor at the Anderson School of Management at the University of California, Los Angeles, says that the benefit should be suspended until Whitacre leaves GM.
“It’s more than a perception problem. If I was an AT&T shareholder or executive, I’d put up a stink about this,” Lewin said.
Source: Detroit News
– By: Omar Rana