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.
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Continued stagflation and cost of living pressures are causing couples to think twice about starting a family, new data has revealed, with long term impacts expected
2 min
Australia is in the midst of a ‘baby recession’ with preliminary estimates showing the number of births in 2023 fell by more than four percent to the lowest level since 2006, according to KPMG. The consultancy firm says this reflects the impact of cost-of-living pressures on the feasibility of younger Australians starting a family.
KPMG estimates that 289,100 babies were born in 2023. This compares to 300,684 babies in 2022 and 309,996 in 2021, according to the Australian Bureau of Statistics (ABS). KPMG urban economist Terry Rawnsley said weak economic growth often leads to a reduced number of births. In 2023, ABS data shows gross domestic product (GDP) fell to 1.5 percent. Despite the population growing by 2.5 percent in 2023, GDP on a per capita basis went into negative territory, down one percent over the 12 months.
“Birth rates provide insight into long-term population growth as well as the current confidence of Australian families,” said Mr Rawnsley. “We haven’t seen such a sharp drop in births in Australia since the period of economic stagflation in the 1970s, which coincided with the initial widespread adoption of the contraceptive pill.”
Mr Rawnsley said many Australian couples delayed starting a family while the pandemic played out in 2020. The number of births fell from 305,832 in 2019 to 294,369 in 2020. Then in 2021, strong employment and vast amounts of stimulus money, along with high household savings due to lockdowns, gave couples better financial means to have a baby. This led to a rebound in births.
However, the re-opening of the global economy in 2022 led to soaring inflation. By the start of 2023, the Australian consumer price index (CPI) had risen to its highest level since 1990 at 7.8 percent per annum. By that stage, the Reserve Bank had already commenced an aggressive rate-hiking strategy to fight inflation and had raised the cash rate every month between May and December 2022.
Five more rate hikes during 2023 put further pressure on couples with mortgages and put the brakes on family formation. “This combination of the pandemic and rapid economic changes explains the spike and subsequent sharp decline in birth rates we have observed over the past four years,” Mr Rawnsley said.
The impact of high costs of living on couples’ decision to have a baby is highlighted in births data for the capital cities. KPMG estimates there were 60,860 births in Sydney in 2023, down 8.6 percent from 2019. There were 56,270 births in Melbourne, down 7.3 percent. In Perth, there were 25,020 births, down 6 percent, while in Brisbane there were 30,250 births, down 4.3 percent. Canberra was the only capital city where there was no fall in the number of births in 2023 compared to 2019.
“CPI growth in Canberra has been slightly subdued compared to that in other major cities, and the economic outlook has remained strong,” Mr Rawnsley said. “This means families have not been hurting as much as those in other capital cities, and in turn, we’ve seen a stabilisation of births in the ACT.”
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