Is an executive’s personal use of the company plane a perk?

For purposes of the proxy statement filed with the SEC, is an executive’s personal use of the company plane a perk?

It’s a perk.

Companies justify providing this “corporate jet” benefit as providing a level of security for executives and their family and as a means to increase travel efficiency. Protect their health. But it’s clearly a perk – it was even identified as such in the SEC’s 2006 adopting release when it overhauled its executive pay rules.

And this is the largest disclosed value of all perks. The biggie. For executives at some of the larger companies – they report over $150k worth of personal flying time annually. Flying private is expensive.

Not only is it big for the executive’s personal use of the company plane – but when the executive brings a partner, the kids or any guests – that’s all personal use too that is considered a perk – even though the incremental cost might be de minimus.

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