September 12, 2012
How Common Are “Personal Use of Aircraft” Policies (And What Is In Them)?
– Broc Romanek, CompensationStandards.com
Recently, Ruth Wimer of McDermott, Will taped a podcast with me on personal use of aircraft. Since Ruth wrote out her answers to some of the questions, I thought I would share them since they are so useful. Below is one answer:
I believe that most public companies have some sort of aircraft policy, but there are still many that do not. Often what I see is a description of the amount of personal use, and sometimes business use, in an executive’s employment contract. In Chapter 3 of “The Corporate CEO,” the author provides that an Aircraft Use Policy, should be a simple, relatively short document that provides the central repository for: How the aircraft is to be used, Who can use it, How the aircraft is scheduled, Special cases, and Operating restrictions.
However, in drafting policies, I like also to describe, using the company’s actual information, examples showing the tax effect to the executive for his own or that of his guests, personal travel, the tax effect to the company, and if it is a public company, a description of the SEC reporting obligations concerning the travel. By covering not only the procedural aspects of the airplane travel, but also the legal effects for the company and the executive, the executive can make more informed decisions about his choice of travel.