March 6, 2023
The Same Old Story—Another Perks Enforcement Action
I searched this blog for entries about perks, and no fewer than 29 had “perk” and 11 had “enforcement” in the title. In my book, that’s already 29 reasons to beef up your perks disclosure controls and procedures. But the SEC keeps focusing on them, so we keep blogging about them!
It should surprise no one that the latest enforcement action involves a private plane, personal security and travel expenses for the spouses of executives. This time, the private plane was owned by the executive, and there’s a related-party transaction element.
Specifically, the SEC announced it settled charges against a global transportation company and its former CEO for failing to disclose $320,000 in perks. Further, with respect to the related-party transaction, the proxy disclosed that the company chartered the former CEO’s plane from an independent management company and that it paid $3 million for those charters. However, the company failed to include that the CEO received $1.6 million of that amount, and therefore did not disclose the approximate dollar value of the CEO’s interest in the transaction.
To settle the charges, the company and CEO agreed to pay $1 million and $100,000, respectively, in civil penalties.
As a perks refresher this proxy season, check out our “Perks” Practice Area and our chapter on Perks & Other Personal Benefits as part of Lynn & Borges’s “Executive Compensation Disclosure Treatise” posted on this site.
– Meredith Ervine