The $65 Million Perk for CEOs: Personal Use of the Corporate Jet Has Soared
Company spending on the benefit has climbed 50% since before the pandemic
5 min
One of the flashiest executive perks has roared back since the onset of the pandemic: free personal travel on the company jet.
Companies in the S&P 500 spent $65 million for executives to use corporate jets for personal travel in 2022, up about 50% from prepandemic levelsthree years earlier, a Wall Street Journal analysis found. Early signs suggest the trend continued last year.
Overall, the number of big companies providing the perk rose about 14% since 2019, to 216 in 2022, figures from executive-data firmEquilar show. The number of executives receiving free flights grew nearly 25%, to 427.
Most companies report executive pay and perks in the spring.
Meta Platforms spent $6.6 million in 2022 on personal flights for Chief Executive Mark Zuckerberg and his then-lieutenant, Sheryl Sandberg—up about 55% from 2019, the Journal found. Casino company Las Vegas Sands spent $3.2 million on flights for four executives, more than double its annual expense in any year since 2015. Exelon, which owns Chicago’s Commonwealth Edison utility, more than tripled its spending on the perk since 2019.
Company jets have long symbolised corporate success and, to critics, excess. Companies typically say flying corporate is safer, healthier and more efficient. Some companies—including Cardinal Health, Raymond James Financial and Hormel Foods—added or expanded the perk in 2020 or 2021, citing pandemic health and safety concerns. Most spending growth came at companies already paying for personal flights in 2019.
Palo Alto Networks began subsidising personal flights for CEO Nikesh Arora in the year ended July 2022, spending about $650,000. That total rose to $1.8 million in its most recent fiscal year, plus a further $286,000 to cover his tax bill for the perk, the cybersecurity company said in an October securities filing.
The company said in filings that its board requires Arora to fly corporate in response to a security consultant’s report. “There was a bona fide, business-related security concern for Mr. Arora and credible threat actors existed with both the willingness and resources necessary for conducting an attack on Mr. Arora,” it said.
Companies report spending on flights they can’t classify as business-related, including trips to board meetings for other companies or commuting from distant residences. Some give executives a fixed personal-flight allowance in hours or dollars, and require reimbursement beyond that.
The sums have little financial impact on most giant corporations, even when annual flight bills exceed a million dollars. Critics say the free flights indicate directors too eager to please top executives.
“The vast majority of S&P 500 companies do not offer this perk,” said Rosanna Landis Weaver, an executive-pay analyst at As You Sow, a nonprofit shareholder-advocacy group that has produced annual lists of CEOs it considers overpaid.
The Journal’s analysis reflects what companies disclose in securities filings, typically in footnotes to annual proxy statements. Federal rules generally require companies to itemize the perk for each top executive if it costs the company $25,000 or more in a year.
PepsiCo spent $776,000 on personal flights for five executives in 2022, double what it paid for the perk in 2019. Two-thirds of the spending subsidized flights by CEO Ramon Laguarta, who is required to use company aircraft for personal flights for safety and efficiency reasons. In an interview last spring, Laguarta said he sometimes ended business trips to Europe by flying to visit his mother in his native Barcelona. She died later in the year, in her 90s.
A PepsiCo spokesman said the company jet allows executives to reach remote facilities.
Personal jet use can draw investor and regulatory scrutiny. It contributed to the ouster of Credit Suisse’s chairman in 2022.
In June, tool maker Stanley Black & Decker settled Securities and Exchange Commission charges that it failed to disclose $1.3 million in perks for four executives and a director, mostly their use of company aircraft, from 2017 through 2020. In 2020, Hilton Worldwide Holdings settled SEC charges that it didn’t disclose $1.7 million in perks over four years, in part by underreporting costs for CEO Christopher Nassetta’s personal flights by 87%in two of those years. Hilton paid a $600,000 penalty.
Both companies settled without admitting or denying wrongdoing.
Stanley Black & Decker said it raised the errors with the SEC and settled without a fine. In 2022, Stanley Black & Decker reported spending nearly $143,500 on personal flights for former CEO James Loree and his successor, Donald Allan Jr., primarily to fly to outside board meetings or from second homes to work.
Hilton cited higher fuel prices in reporting about $500,000 in flights for Nassetta in 2022.
Spending on executives’ personal travel outpaced overall growth in business-jet traffic. Takeoffs and landings are up by about 19% since 2019, after dropping sharply in 2020, Federal Aviation Administration data show. Corporate spending on the perk rose 52%, the Journal found.
Higher fuel costs in 2022 contributed to the increase in spending, and there is little indication of a slowdown last year. Of the 15 S&P 500 companies that have reported spending on the perk in fiscal years ended in the second half of 2023, 10 said they increased spending, including three that didn’t report the perk a year earlier, securities filings show.
Sixteen companies that started paying for personal flights during the pandemic have since stopped. An additional 31 continued spending into 2022, with a median of $124,000. Accenture, Palo Alto Networks and concert promoter Live Nation Entertainment reported spending more than $500,000 apiece.
In 2020, Julie Sweet’s first full year as CEO, Accenture capped annual spending for her personal flights at $200,000, then doubled it the next year. Accenture raised the cap to $600,000 in its year that ended Aug. 31, when it spent about $575,000 on Sweet’s personal flights, the company said in a December securities filing.
In its filings, Accenture said it encourages Sweet to use company aircraft for personal travel, citing a security study the company commissioned.
Companies that provided the perk already in 2019 accounted for most of the recent growth in spending, the Journal found.
Meta, for example, spent nearly $11 million on Zuckerberg and Sandberg’s personal flights from 2015 through 2019, and a further $13.3 million over the next three years. Zuckerberg’s company-paid travel included trips on an aircraft he owns, which Meta charters for business, paying $523,000 in 2022. The Facebook owner stopped paying for Sandberg’s personal flights when she stepped down as a company employee in September 2022. She remains on Meta’s board.
Spokesmen for Meta and Sandberg declined to comment beyond Meta’s securities disclosures.
CEOs incurred most of the personal flight spending, making up half the executives receiving the perk in 2022 and two-thirds of the overall cost, Equilar’s data show.
At some companies, other executives are making up a bigger share of the cost. Four Norfolk Southern executive vice presidents accounted for just over half its roughly $370,000 in spending on personal flights in 2022, securities filings show. CEO Alan Shaw accounted for the rest. By contrast, the railroad reported subsidising flights only for then-CEO James Squires in the five years through 2020.
Shaw may take as many as 60 hours of personal flights on company aircraft before reimbursing Norfolk Southern, the company said in its filings. Personal use of company aircraft by executives other than the CEO was infrequent, it added. Norfolk Southern didn’t respond to requests for comment.
—Jennifer Maloney contributed to this article.
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
The 28% increase buoyed the country as it battled on several fronts but investment remains down from 2021
3 min
As the war against Hamas dragged into 2024, there were worries here that investment would dry up in Israel’s globally important technology sector, as much of the world became angry against the casualties in Gaza and recoiled at the unstable security situation.
In fact, a new survey found investment into Israeli technology startups grew 28% last year to $10.6 billion. The influx buoyed Israel’s economy and helped it maintain a war footing on several battlefronts.
The increase marks a turnaround for Israeli startups, which had experienced a decline in investments in 2023 to $8.3 billion, a drop blamed in part on an effort to overhaul the country’s judicial system and the initial shock of the Hamas-led Oct. 7, 2023 attack.
Tech investment in Israel remains depressed from years past. It is still just a third of the almost $30 billion in private investments raised in 2021, a peak after which Israel followed the U.S. into a funding market downturn.
Any increase in Israeli technology investment defied expectations though. The sector is responsible for 20% of Israel’s gross domestic product and about 10% of employment. It contributed directly to 2.2% of GDP growth in the first three quarters of the year, according to Startup Nation Central—without which Israel would have been on a negative growth trend, it said.
“If you asked me a year before if I expected those numbers, I wouldn’t have,” said Avi Hasson, head of Startup Nation Central, the Tel Aviv-based nonprofit that tracks tech investments and released the investment survey.
Israel’s tech sector is among the world’s largest technology hubs, especially for startups. It has remained one of the most stable parts of the Israeli economy during the 15-month long war, which has taxed the economy and slashed expectations for growth to a mere 0.5% in 2024.
Industry investors and analysts say the war stifled what could have been even stronger growth. The survey didn’t break out how much of 2024’s investment came from foreign sources and local funders.
“We have an extremely innovative and dynamic high tech sector which is still holding on,” said Karnit Flug, a former governor of the Bank of Israel and now a senior fellow at the Jerusalem-based Israel Democracy Institute, a think tank. “It has recovered somewhat since the start of the war, but not as much as one would hope.”
At the war’s outset, tens of thousands of Israel’s nearly 400,000 tech employees were called into reserve service and companies scrambled to realign operations as rockets from Gaza and Lebanon pounded the country. Even as operations normalized, foreign airlines overwhelmingly cut service to Israel, spooking investors and making it harder for Israelis to reach their customers abroad.
An explosion in negative global sentiment toward Israel introduced a new form of risk in doing business with Israeli companies. Global ratings firms lowered Israel’s credit rating over uncertainty caused by the war.
Israel’s government flooded money into the economy to stabilize it shortly after war broke out in October 2023. That expansionary fiscal policy, economists say, stemmed what was an initial economic contraction in the war’s first quarter and helped Israel regain its footing, but is now resulting in expected tax increases to foot the bill.
The 2024 boost was led by investments into Israeli cybersecurity companies, which captured about 40% of all private capital raised, despite representing only 7% of Israeli tech companies. Many of Israel’s tech workers have served in advanced military-technology units, where they can gain experience building products. Israeli tech products are sometimes tested on the battlefield. These factors have led to its cybersecurity companies being dominant in the global market, industry experts said.
The number of Israeli defense-tech companies active throughout 2024 doubled, although they contributed to a much smaller percentage of the overall growth in investments. This included some startups which pivoted to the area amid a surge in global demand spurred by the war in Ukraine and at home in Israel. Funding raised by Israeli defense-tech companies grew to $165 million in 2024, from $19 million the previous year.
“The fact that things are literally battlefield proven, and both the understanding of the customer as well as the ability to put it into use and to accelerate the progress of those technologies, is something that is unique to Israel,” said Hasson.
This stylish family home combines a classic palette and finishes with a flexible floorplan
Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.
