I agree. It's one thing for the CEO of a large, profitable company to be flying private, but for a small, loss-making company, it feels off.
The guy is already ultra-rich...he might as well pay for those flights himself to show solidarity with shareholders. But it's up to Canoo shareholders to decide that, not me.
He is effectively paying for these flights by buying Canoo stock. This whole structure is set up to allow him to maximize the tax efficiency of his compensation. The jet travel is realized as a business expense and offsets future potential profits at the company, he also avoids paying the ~60% (federal and state income tax, as well as payroll tax paid by employer) tax that you incur paying high wage w2 employees.
> Aquila Commits Misappropriation Of Solera Assets And Resources
> After execution of the Separation Agreement and Omnibus Agreement, Solera confirmed that prior to his separation from the Company, Aquila had misappropriated Solera’s resources and money by fraudulently claiming that certain flight and hotel expenses were for Solera business, when in fact, Aquila incurred these expenses solely on personal, non-Solera business—including fundraising for his intended new investment venture.
> Specifically, Aquila used a private jet chartered by Solera (Gulfstream IV- SP-N910AF) solely for Aquila’s personal business, but nevertheless charged the flights to Solera, between November 2018 and May 2019—i.e., when Aquila was still Solera’s President and CEO. For example, Aquila had Solera pay over $700,000 for 45.8 hours of flight time for Aquila’s trips to, among other places, Austria, Switzerland, Germany, Bulgaria, Qatar, Kuwait, and France, as well as thousands of dollars for certain hotel expenses associated with certain of these trips. These trips were not for Solera business. Aquila traveled for personal purposes, including in connection with his position as the Chairman of the Board of Sportradar and to fundraise for his new “Founders Select” venture.
> Solera is continuing to investigate Aquila’s pre-separation activities with respect to any further instances of fraud, theft, misappropriation, or other actions of Aquila giving rise to claims that are not released under the Separation Agreement.
It’s actually not fraud because it’s happening in the open with board approval. And, no not every share holder is an equal. A share holders relevance is proportional to their voting power. While you can’t outright fleece a shareholder, it’s not the case that a single share held is worth the same as is given the same rights as someone holding 51% of all shares. At that point they effectively own the company. The company still has residual responsibility by law and regulation to all shareholders but it not nearly as broad as you seem to paint. This structure described is absolutely ok. Further the fact it’s publicly disclosed almost entirely insulates them - if you don’t like it, vote your shares or sell it on the public market.
>He is effectively paying for these flights by buying Canoo stock.
If a CEO is intentionally creating a situation to make a company unprofitable and paying it back by buying shares, that is 100% securities fraud and I'm stunned anyone disagreed with that assertion.
I'm not saying the company is committing securities fraud, I am saying that if the company created a scheme as described by the commentor I was replying to, then that would be securities fraud.
The politicians play us with "eat the rich" and "fair share". Meanwhile they increase taxes on 400k in HCOL areas making it painful to succeed.
Why isn't the slogan "stop the loopholes" (The one in this thread)? Because politicians play us against each other instead of fixing laws they benefit from.
The board chooses the CEO and his salary; if the board wants to give some of the salary in the form of jet reimbursements it's not really any concern beyond them and the shareholders.
It is a concern for the tax payers if company is paying it as expense and deducting it from taxes instead of paying it as (taxed) salary and him doing what he wants with his money. Don't you have rules what can be expensed in the US?
And personal use is accounted for (if paid by the company) and remanded as salary/perks.
I even got affected by that at a restaurant I worked at; they fed us and we got a small "virtual" payment that would show up on our taxes for that meal.
My recollection (I’m not checking) is that congress passed a law restricting the deductibility of private air flights, but that there’s widespread fraud in the form of “security consultants” advising boards that such flights are necessary for security purposes and so they are deducted anyway.
It’s pretty unreal when you think about it that our culture has not small cadres of credentialed, professional liars for hire. Not just for CEOs either, think about the fake service pets for another example.
The guy is already ultra-rich...he might as well pay for those flights himself to show solidarity with shareholders. But it's up to Canoo shareholders to decide that, not me.