Cisco's Chambers gets corporate jet benefits but will he use them?

Cisco chief John Chambers finally received one of the elite perks a CEO of a highly successful organization can get - private jet reimbursement from the company.

Until recently Chambers paid for his own corporate jet use but Cisco's board put an end to that stating in the company's most recent proxy:

"In September 2008, the Board of Directors adopted a travel policy whereby the Company's Chairman and Chief Executive Officer, John T. Chambers, is generally required to utilize a private airplane for business travel because his responsibilities on behalf of Cisco entail substantial national and international travel. Mr. Chambers will be reimbursed for expenses incurred in the operation of his private plane when used solely for Cisco business provided such expenses do not exceed the market rate charged for equivalent commercial charter travel. To date, there have been no reimbursements made to Mr. Chambers under this policy."

The use of corporate jets by executives has been a nagging issue for public companies for years - an issue Cisco has avoided until now, apparently. Maybe it felt it was dissing its chief because in 2006, almost 80% of Fortune 100 companies indicated that their CEO used corporate owned, leased, or chartered aircraft for personal use up from almost 70% in 2005, according to compensation research firm Equilar. In that same study Eqilar found that executives a median of $109,743 worth of flight hours on corporate jets, down from about $121,600 in 2006.

Still, according to the USA Today, CEO use travel on the corporate dime is widespread and expensive. Among the heaviest users of this perk: American Electric Power CEO Michael Morris got $289,865 worth of travel subsidized by shareholders; American Express CEO Ken Chenault racked up $323,884 on the corporate jet; Coca-Cola CEO Neville Isdell enjoyed $341,849 in subsidized flight time; Deere CEO Robert Lane got $324,825; and IBM chief Samuel Palmisano received $406,235 worth of travel on the company plane.

In the end though, it's not clear how much Chambers will use this new -found benefit because he sees videoconferencing, particularly Cisco Telepresence technology as the way to cut corporate travel. At the Gartner conference last week Chambers said Cisco has cut travel by 30%, saving about $150 million, through the use of its TelePresence technology. In ComputerWorld coverage of the show, Chambers said Wi-Fi services and other types of Internet connections on planes will let travelers hook up devices to the Web - potentially moving in-flight Internet access well beyond mere entertainment options. Chambers said he sees such capabilities becoming available within 18 months or so.

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