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WSJ back on track: Corporate Jet Set: Leisure vs. Business

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New WSJ piece alleges that corporations dramatically under-report personal use of corporate aircraft.

The WSJ has a new article in what is now a series on private jet usage.  Unlike they’re previous unfocussed, class warfare story of the previous article, this one looks at the under reporting of personal usage of corporate aircraft for top execs.  The allegations made here (or at least implied) are serious and could easily result in tax evasion or fraud cases against some involved.  In most, or at least a lot, of the cases, there may be a legitimate difference of opinion as to whether or not flights by executives to vacation destinations constitute business use, but it seems clear that many executives have been under-reporting their income, and companies have been under-reporting the perks they pay to the top execs.

Interestingly, the rate the SEC requires to be expensed for personal use is only the variable portions of the expenses.  Even if you report everything faithfully, that’s a heck of a deal –flying for just the cost of the fuel and catering — depreciation, pilots, training, and cost of capital be damned.   In most cases that’s probably a 50% discount to what that executive would have to pay a third party to receive the same service.

Also, it looks like their private flight database is back online and searchable.  Looks like it’s undergone some upgrades since it was last available.

Corporate Jet Set: Leisure vs. Business (WSJ)

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Written by mojofinance

June 16, 2011 at 5:01 am

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