Boeing executives got extra $500k in private jet perks
An internal Boeing review found that Chief Executive David Calhoun and other top executives took personal trips worth more than $500,000 on the company’s private jets and other planes that were improperly recorded as business travel.
The review and correction, which Boeing disclosed in a securities filing, was prompted by a Wall Street Journal investigation last year into the executives’ use of the company’s fleet of private jets, people familiar with the matter said.
Boeing’s review found that some flights by the executives in 2021 and 2022 “were not previously classified as perquisites by the company but should have been classified as such in accordance with SEC rules and guidance,” the company said in its proxy filing on April 5.
Executives may dart between their residences, work sites and personal destinations such as vacation spots with portions of the trips being officially counted as personal or business trips.
In general, a private jet flight taken for commuting purposes may be considered a perquisite, and thus a taxable event, while flights between two company offices may not be. The pandemic and more time spent working from home have complicated the matter.
When executives use a company jet for personal travel, it typically counts as taxable income. The Internal Revenue Service said earlier this year it will begin auditing dozens of companies over the personal use of corporate jets by executives.
The Securities and Exchange Commission and IRS have different reporting requirements for personal jet flights.
Boeing’s executive flightoperations unit and its board of directors scrutinize personal use of company aircraft, the Journal previously reported. Boeing said in its proxy that flights to attend outside board meetings or speaking engagements may count as perquisites under SEC rules.
Boeing’s board requires Calhoun to use the company’s private jets for personal travel, not just business, for security reasons. The company recently said the CEO was stepping aside, part of a shake-up after a Jan. 5 midair blowout and production problems.
Other executives in the revised disclosure—finance chief Brian West; recently departed commercial chief Stan Deal and defense chief Ted Colbert —may also use Boeing’s fleet of private jets for personal trips. For these executives, the revisions include some personal flights on charter, leased or commercial aircraft.
Last year, Boeing said the company followed all laws and regulations when it came to classifying executives’ aircraft use: “As it relates to the tracking and categorization of flights, we have professionals and subject matter experts who help us strictly comply.”
In the September 2023 article, the Journal reported that Calhoun and other executives hadn’t relocated to the plane maker’s headquarters in Arlington, Va. Instead, flight records suggested the CEO flew from his two homes to the main office and other Boeing locations via the company’s fleet of private jets.
Some other company executives have worked out of offices near their homes, the Journal reported. Boeing opened a small new office near the Connecticut homes of West and treasurer David Whitehouse.
Calhoun addressed the Journal’s article at an internal meeting with employees in November, saying he wanted executives to travel and spend time visiting its operations.
“I don’t want anybody, by the way, to misinterpret a silly article that got published in
The Wall Street Journal about me traveling a lot,” Calhoun said, according to a recording of the meeting the Journal reviewed. “That’s my objective. That is what I want to do. That is what I want everybody at the enterprise level to do.”
In its proxy filing, Boeing reported $514,000 in personal flights on company aircraft for Calhoun in 2023, part of his total compensation of $33 million that year.
The revisions concerned the prior two years. The revised 2022 tally for Calhoun’s personal flights came to about $332,000, an increase of $93,000 from the company’s calculation last year, according to securities filings. For 2021, the tally increased by $49,000.