By:  Cydney Posner

Today's New York Times has an article thatdiscusses recent increases in personal use by executives of corporate jets and the resulting increased costs to shareholders. In many cases, these increased costs include tax gross-ups for executives and use of the jet even following retirement The renewed SEC focus on use of an incremental valuation model, as opposed to the cost for tax purposes that many companies had incorrectly used in the past, may help explain some of the increase reflected in proxy statements. New IRS rules have reduced the extent of the write-off available to companies for personal travel using corporate aircraft. The article also questions the legitimacy of the "security" rationale, quoting one academic who likens the insistence by Boards that executives use corporate jets for security purposes to requiring that executives eat at a five-star restaurant for their own nutrition. The heavy use by lawmakers of corporate fleets for fund-raising purposes may explain in part the absence of any legislation that could have the effect of curbing the use of the travel perk.

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