The number of business owners using corporate jets for personal travel has jumped 50% since the pandemic, but the free perks are costing companies millions of dollars.
S&P 500 companies spent $65 million in 2022 for their senior executives to fly on corporate jets for personal travel. According to the Wall Street Journal.
Early signs suggest the trend will continue in 2023, although executive compensation and perks are typically not reported until spring, according to a Wall Street Journal analysis.
Private jet charter companies say operating a private jet is expensive, costing the company between $1,100 and $1,900 per flight hour, not including maintenance, storage and crew costs. Luna Jets.
Despite the high charges, the number of large companies offering this benefit has increased by about 14% since 2019, the Journal reported.
As of 2022, 216 companies listed on the S&P 500 will provide corporate jets for the personal use of executives, according to figures from the executive data firm. Equivalent show.
The number of executives receiving free flights also increased by approximately 25% year-on-year to 427 in 2022.
Among the companies that spent big on corporate jets, Meta Platforms topped the list in 2022, with CEO Mark Zuckerberg and his then-deputy Sheryl Sand The newspaper reported that Mr. Berg spent $6.6 million on personal flight benefits.
This number is a 55% increase from 2019.
Mr Zuckerberg has been criticized for the carbon footprint of his company jets, but Mr Mehta said private jets were needed to “keep Mark safe and allow him to go about his daily life with minimal disruption”. said it was necessary.
Casino giant Las Vegas Sands had the second-highest bill, spending $3.2 million on flights for four executives, more than any other year since 2015, according to the Journal. It has more than doubled.
Additionally, utility company Exelon, owner of Chicago's Commonwealth Edison utility, has more than tripled its spending on executive prize tickets since 2019.
Aerospace company Lockheed Martin, Modelo S-Special's parent company Constellation Brands, and Tyson Foods have also pledged $2.1 million, $1.9 million, and $1.8 million, respectively, for personal flights on the company's Soa aircraft in 2022. The magazine reported that he paid a large sum of $1,000.
These so-called “personal flights” reportedly include trips that the company cannot classify as business-related, such as flights to other companies' board meetings or commuting from distant residences.
According to the magazine, some companies give executives a fixed allowance in hours or dollars (typically $25,000 per year) for these flights, and then demand reimbursement if they exceed that threshold. That's what it means.
PepsiCo is one company using this model.
The New York-based food and beverage company spent $776,000 on personal flights for five executives in 2022. That's double what it paid in 2019, but two-thirds of its 2022 trips were covered by CEO Ramon Laguarta's subsidies, the newspaper reported.
However, the paper said this amount would have little financial impact for most large companies. For reference, Meta's revenue in 2022 was $116 billion, meaning Zuckerberg and Sandberg's $6.6 million worth of flights accounted for less than 1% of the profit.
Only one company in the Journal's analysis cut corporate jet spending to $0 in 2022. Match Group has been struggling with a decline in paying users and appointed a new CEO earlier this month.
Tinder, the company's most popular subsidiary, has seen customer defections in each of the past four quarters, hurting revenue.
