I agree with your observations that the class envy in this instance is rooted in (legitimate) resentment of these execs for wanting and getting the bailout. Like I have said, I am against the bailouts and always have been, so in that respect I am aligned with a lot of other folks.
Converting time and money is not just the method of accountants, but it is key to making wise decisions. If my time is worth $100 an hour, and I need to do a task that I can pay someone else $15 an hour, it makes sense to hire that person and get the benefit of that deal (+$85 an hour).
The PR problem is indeed a problem, but it’s rooted in a basic class envy. A person who’s time is worthless naturally won’t be sympathetic to a person who’s time is expensive. You can’t ask them to relate - they don’t have the capacity. Like the people who had a problem with the Palin family’s $ 150,000 campaign wardrobe - you don’t ask a person who shops for irregular white tube socks their opinion on it. They just can’t even imagine how it’s not a big deal.
When I was a management consultant years ago I often found that it was the “soft” issues that made the biggest messes. Even when the “hard” data all stacked up.
This Citi private aeroplane could be one such situation. It is fraught with Reputational Risk.
IMO it would be poison for any Board to let that one happen — be it due to class envy or legitimate complaint, there is no way that would fly with an aggrieved Citi shareholder or customer. They would probably prefer to claw out their own eyes with their own chewed fingernails than see their failed executives swanning around on a private jet.
The numbers probably do stack up: these execs aren’t fools and they probably did their sums correctly. It probably is cheaper to have a private jet on hand, rather than flying commercially.
But the proposition is highly toxic from a PR and HR standpoint. All that marketing effort for all those years could be blown away over this single silly issue. And all their efforts to get remuneration to keep step with performance could be blown away, too, by this single decision. Sure, these are soft considerations, but they are jolly important ones!
Their Chairman would have to be pretty brave, brazen or silly to take that business case forward without alot of deep soul searching and good advice.
That’s one of the reasons I used to counsel clients to pay careful attention to the numbers and be guided by them, but don’t be mesmerized by them They are important decisionmaking tools, but they are not the only ones to be considered. Indeed, depending on the circumstance they may not even be the most important tool.
I see Obama has burst into print over the issue: I’m not surprised, how opportune. Citi may find that the aeroplane becomes exceedingly expensive in political capital and future aid. They were silly to present themselves to him as such a large and obvious tempting target. No politician in his right mind would turn that opportunity down.
It will be interesting to see how this plays out.