An internal review at Boeing Co (NYSE:BA) revealed that Chief Executive David Calhoun and other top executives took personal trips exceeding $500,000 on the company's private jets, misclassified as business travel.
Following a review commenced by the company in 2023, the company found certain items, primarily aircraft and ground transportation costs, for certain executives during 2022 and 2021 that were not previously classified as perquisites but should have been classified as such in accordance with SEC rules and guidance.
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, the media report noted, citing people familiar with the matter.
The pandemic and remote work have complicated discerning between personal and business travel. The use of corporate jets for personal travel triggers tax implications. The IRS plans audits on executive jet use. Reporting requirements from the SEC and IRS differ for personal flights.
Boeing's board mandates CEO Calhoun to use private jets for both personal and business travel due to security concerns. Recent leadership changes followed a midair incident and production issues.
Other executives, including finance chief Brian West, have also utilized Boeing's private jets for personal trips, with revised disclosures including flights on charter, leased, or commercial aircraft.
In response to prior scrutiny, Boeing reiterated compliance with laws and regulations regarding executive aircraft use, the report noted.
As per the WSJ report, CEO Calhoun defended the travel patterns, expressing the importance of executives visiting company operations.
Boeing reported $514,000 in personal flights for Calhoun in 2023, part of his $33 million compensation. Revisions adjusted figures for 2022 and 2021.
Price Action: BA shares are trading higher by 0.05% at $173.44 in premarket on the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Tada Images On Shutterstock.com
