NAFA member, Stewart H. Lapayowker, Esq., President of Lapayowker Jet Counsel, P.A., shares his recent article regarding personal use of corporate aircraft.
The tragic homicide of Brian Thompson, CEO of UnitedHealthcare, has highlighted critical vulnerabilities in the safety and security of corporate executives. This event was a grim reminder that high-ranking executives often face unique security risks due to their prominence and visibility. This heartbreaking incident underscores the urgent need to rethink how security measures are reported and prioritized in disclosures mandated by the Securities Exchange Act of 1934, and whether it is equitable to continue to tax executives for personal use of corporate aircraft mandated by the Board for his or her safety and security.
Specifically, this article advocates for creating a "security measures" category within “All Other Compensation” in executive compensation tables, thereby largely eliminating the inclusion of “personal use of corporate aircraft” within the “perquisite” category, to enhance transparency and better reflect modern corporate realities.
A Shift in Perspective: Corporate Aircraft as a Security Tool
Traditionally, the personal use of corporate aircraft by executives has been framed as a luxury or perk (i.e., a personal benefit not generally available on a non-discriminatory basis to all employees that is not integrally and directly related to the performance of the executive’s duties). However, in light of escalating security threats, this perspective is outdated; executives’ safety and security is essential to their ability to perform their duties. Corporate aircraft offer a secure, safe and controlled mode of transportation that significantly reduces executives' exposure to risk.
Public travel increases the likelihood of executives being tracked, confronted, or targeted by individuals with malicious intent. Corporate aircraft eliminate these vulnerabilities by providing a secure, private, and direct mode of transportation.[1] Additionally, these aircraft can be equipped with enhanced security measures tailored to the specific risks executives face, including real-time threat assessment systems and secure communication tools.
This article was originally published by Lapayowker Jet Counsel, P.A. on Lexology on February 27, 2025.