Revealed: How CEOs use corporate jets like their 'personal taxis'

The chief executives of public companies are regularly using shareholder money to fly to exclusive resorts in luxury aboard private jets, a report has revealed.



A review of Federal Aviation Administration flight records found that dozens of jets operated by publicly traded corporations made 30 per cent or more of their trips to or from resort destinations as CEOs use the planes like personal taxis.



The report found that a number of companies are under-reporting the cost of allowing their executives to commute home and on vacation in style, as shareholders struggle with the weak economy.



Life of luxury: The report found that dozens of jets used by public companies made 30 per cent or more of their trips to resort areas

The Wall Street Journal reviewed the records from nearly every jet flight in the U.S. over a four-year period between 2007 and 2010.



It found that a high percentage of the trips made by some corporate jets were to vacation destinations, suggesting that they were being used by executives to make personal trips.

Computer storage company EMC Corp has five jets that chief executive Joseph is allowed ‘limited’ personal use of.



Over the four years to December, the jets landed 393 times at three resorts where Mr Tucci has vacation homes, in Cape Cod, the New Jersey shore and the Florida keys, according to the report. That is about one trip every four days.



One of the aircraft spent 46 per cent of its flights going to or from these or other vacation spots.



Frequent flyer: Jets used by computer storage company EMC Corp landed 393 times in four years at three resorts where CEO Joseph Tucci has homes

FREQUENT FLYERS: THE COST OF FLYING SOLO

Variable cost per hour, 2010 Boeing BBJ - $5,992 Gulfstream G550 - $4,106 Bombardier Challenger 605 - $3,112 Dassault Falcon 900EX - $3,086 (includes fuel, landing fees, crew expenses and annual maintenance) Source: Conklin & de Decker Aviation Information/WSJ

More than half of the flight by four jets used by New York-based Leucadia National Corp went to or from resort areas.



According to the report, in 2009 alone the jets spent 220 hours flying to or from Jackson Hole, Wyoming and New York’s Hamptons, where chairman Ian Cumming has homes.



Under SEC rules, the cost of personal travel on company planes must be disclosed if it exceeds $25,000 per year or more than 10 per cent of executive benefits.



But the report claimed that some companies are disguising personal trips as business travel.



‘Personal use of corporate aircraft is still underreported,’ Brink Dickerson, an attorney at Troutman Sanders LLP, told the Journal.



Leucadia reported less than $30,000 on personal flying by Mr Cumming in 2009.



But according to estimates by the Journal based on hourly operating-cost, flights made by company jets to the two locations where he has homes alone would have been cost $708,000.



Take a seat: A number of companies are under-reporting the cost to shareholders of allowing executives to commute by plane, according to the report

EMC reported the cost of Mr Tucci’s personal flying at $664,079 over the four-year. But the Journal estimated the cost of flights to and from airports near his homes was close to $3.1 million.



Some of the companies that allow executives to use corporate jets for personal use defended their use.



Yum Brands Inc, which owns KFC and Taco Bell, said that chief executive David Novak and his wife are required to use a company plane for personal and business travel, partly because, ‘Mr Novak has been physically assaulted while travelling’.



A spokesman for EMC told the Journal that the company ‘keeps meticulous corporate aircraft records. Any personal use is reflected accurately in our proxy statement each year.

