Bank of America Corp., pressured by the Treasury Department to justify executive perks, said it does not need to impose new constraints on employee use of company aircraft.
B of A encourages the use of its corporate aircraft for business travel for "safety and efficiency reasons" and does not plan a new preapproval or reporting process for such transport, the company said on its Web site Friday. "Use outside of reasonable business development or associate safety would be considered excessive and not allowed," the company said.
B of A's stance on company-owned aircraft contrasts with Wells Fargo & Co., which said senior executives had to get prior written consent from chief executive officer John Stumpf. Banks that sold preferred shares to the United States through the Troubled Asset Relief Program had to disclose their policies on luxury expenses by Sunday, according to a Treasury document published June 15 that set a 90-day deadline.
B of A's CEO, Kenneth Lewis, said this year that it does not use corporate aircraft for personal matters, spokeswoman Jennifer Darwin noted. The Treasury is demanding companies that got taxpayer money disclose types of prohibited expenditures and describe any preapproval processes, according to an advisory memo sent in June by Katten Muchin Rosenman LLP, a Chicago law firm.
Congress and the Treasury have pressed banks that received Tarp funds to reduce corporate perks and cut spending on marketing for entertainment events perceived to have a limited business purpose. B of A uses "entertainment or events to drive business and revenue growth, building shareholder value and help[ing] advance our community and philanthropic objectives," according to its policy. Events that do not meet these criteria are prohibited, the policy said.
B of A's policy does not set any specific monetary limits on spending. Other Tarp recipients are taking different approaches; Chrysler Financial Inc. said it had barred country club fees, for example, and set a $5 limit on tips to doormen.
B of A's new policy also addresses spending on office or facility renovations, noting that "anything in excess or beyond reasonable variation of standard and not having senior management approval is considered 'prohibited.' " The existing policy can capture exceptions monthly, it said.
Company-owned aircraft may be used by Wells Fargo senior executives and board members, it said in a corporate governance policy published on its Web site, as long as the cost can be justified. "Senior executives who are not members of the operating committee must obtain prior written approval" from the CEO or a member of the committee, Wells said.