Here at Fool World Headquarters just outside Washington D.C., we cover not only corporate events like earnings season, macroeconomic issues like bank and auto bailouts, and general market participant freakout episodes, but the stupider side of business, as well.
And one story that qualifies for that last came across my desk a short time ago.
"I personally don't understand it"
According to Disney
Embattled bank JPMorgan Chase, the recipient of $25 billion in TARP funds, is going ahead with a $138 million plan to buy two new luxury corporate jets and build "the premiere corporate aircraft hangar on the eastern seaboard" to house them, ABC News has learned. ...
But on March 11, the chairman of JPMorgan Chase, Jamie Dimon, said he could not understand why corporate America has such a bad image. "When I hear the constant vilification of corporate America I personally don't understand it," Dimon said. Dimon, whose 2008 compensation package, according to SEC documents, was worth more than $19 million in salary, stock and options, declined to speak with ABC News about the proposed plans.
A Fool's roundtable
Well after sending that around, my inbox started filling up. Here's a sampling of what I got in return, something that evolved into an interesting discussion on corporate short-sightedness:
Cindy Embleton, Fool editor: "AAAAGGGGGGGHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"
Alex Dumortier, Fool writer: "These stories about office remodelings and corporate aircraft are mostly distractions that are meant to provoke emotional reactions and sell newspapers, etc. At $19 million a year, assuming a 70-hour workweek, Dimon's compensation comes down to $5,200/hour. At that rate, if I were a JPMorgan Chase shareholder, I wouldn't want him hanging out in airports waiting for commercial flights... even Warren Buffett has said that corporate executives shouldn't be vilified for using private jets. "
Jim Mueller, Fool editor: "[Alex], your point is well taken. However, the company already has four corporate jets at that airport (two of which would be replaced) and there's nothing wrong with chartering, or going in on NetJets or something similar for the short term. Certainly better for PR than to allow something like another firestorm to be lit, especially if spun correctly by the company."
Selena Maranjian, Fool writer, added: "[And] for what it's worth, note also that Buffett named his own private jet 'The Indefensible.'"
David Williamson, Fool editor: "I have no complaints with executives flying privately, but during these extraordinary times did they really need to build 'the premiere corporate aircraft hangar on the eastern seaboard' to house them?"
Ilan Moscovitz, Fool editor: "Even if it's true that Dimon is going to take full advantage of that one extra hour of work ... it's hard to believe the $138 million price tag (at $5,200 per hour) will save an additional 26,538 hours of work."
Andy Louis-Charles, Fool writer: "What's sad is that major shareholders (mutual funds, pension funds, etc.) don't seem to be researching, scrutinizing, or challenging how management spends shareholder capital. If there is a debate over private ownership vs. fractional ownership vs. first class vs. coach for business travel… who's having this debate? I have yet to hear a news story about vigorous board debate, or of a large institutional shareholder which is known for actively monitoring these type of 'corporate culture' decisions. You can't just rely on some Institutional Shareholder Services (ISS) rating as your due diligence. True stewards of shareholder capital seem to be few and [far] between."
Wall Street, meet Main Street
As a nation, we've always believed in rewarding excellence. So, it's not that executives shouldn't fly in private jets. After all, as both Alex and Selena mentioned, Warren Buffett uses a private jet when he's out and about on Berkshire Hathaway
And it's not that people who contributed to the success of a business don't deserve bonuses. But when a company manages to lose $62 billion in one quarter, while at the same time taking tens of billions of money from the government, as AIG
Our country, if not the world, is in (if you'll pardon the expression) a world of hurt right now, thanks in large part to the reasons why the U.S. government is shoveling a lot of money into companies like Bank of America
Well, frankly, I'm thinking about putting my money into companies that make torches and pitchforks. If only to benefit from the mob.
Please leave your thoughts on mobs, corporate jets, and capital mismanagement in the comment field below.
Fool editor Jim Mueller owns shares of Berkshire Hathaway, but no other company mentioned in this article at the time of publication. He'd like to thank Anders Bylund for the title. Disney and Berkshire are both recommendations of Stock Advisor and Inside Value, and the Fool owns shares of Berkshire. JPMorgan Chase is a former Motley Fool Income Investor recommendation. The Fool is all about (sometimes angry) investors writing for (other angry) investors.