DALLAS — While US boards have curtailed company-paid perks like hunting lodges and golf club memberships, chief executives are cranking up personal use of corporate jets.
The boards defend the perk as a tool to guarantee security and reduce wear and tear on globe-trotting executives. The result: Nonbusiness travel expenses rose for the third straight year in 2013, proxy filings show. Gone is the outrage at chief executives flying in high style that peaked during the recession.
‘‘If your CEO is on vacation and you need him or her to come back quickly, you’d much rather have them be able to hop on a plane and fly back for a meeting as opposed for them waiting to catch the next commercial flight,’’ said Aaron Boyd, director of governance research for Equilar, a company based in Redwood City, Calif., that compiles data on executive pay.
General Electric chief executive Jeffrey Immelt racked up $343,121 in personal use of the corporate plane last year and the tally for JPMorgan Chase & Co.’s Jamie Dimon doubled. Meanwhile, billionaire Larry Ellison leased his own aircraft to the company he runs for $1.5 million.
Spending on jet travel rose 61 percent last year among the 10 biggest Standard & Poor’s 500 Index firms that reported such data and 3.1 percent for the top 50, according to proxy filings.
Firms like Boeing and Halliburton mandate the use of corporate jets for leisure trips. And flying enthusiasts like Ellison, the 69-year-old founder of Oracle, and Google’s Eric Schmidt are taking it to the next level by renting their own jets to the company.
Oracle paid Wing and a Prayer, operator of Ellison’s aircraft, a total to $4.3 million over three years. At Google, Schmidt was reimbursed $1.4 million as executives, including the chief executive himself, flew on his private aircraft in 2013. Schmidt, a billionaire, doesn’t profit from the deal, the company said.
Steve Wynn, the billionaire founder of Wynn Resorts, had one of the biggest bills for personal trips in 2013 — $927,829. This year, the 72-year-old chief executive will have to reimburse for ‘‘certain expenses’’ of such trips on the corporate jet, according to the casino company’s proxy filing. Wynn also lost a villa perk and was asked to pay an annual rent of $525,000 for the house he uses as personal residence at Wynn Las Vegas.
At the other end of the spectrum: Warren Buffett, 83, who reimburses Berkshire Hathaway for items down to postage stamps and phone calls that are personal. The chairman and chief executive uses company-owned aircraft exclusively for business purposes. For personal trips, Buffett flies like a regular manager and gives some money back to his Omaha-based company. He has fractional ownership at NetJets, a Berkshire Hathaway unit, and pays standard rates, the proxy filing shows.
Personal use of corporate jets is making a comeback after some corporations took the perk away five years ago following the financial crisis. The outrage peaked when auto chiefs including Ford’s Alan Mulally and Rick Wagoner, then at General Motors, flew on company jets to plead with Congress for bailout money.
The stock market gains of the past two years — the S&P 500 has jumped 34 percent — helped diffuse criticism over some perks, paving the way for more travel on the corporate jet, said David Schmidt, a senior consultant at executive compensation firm James F. Reda & Associates in New York.
‘‘If the company is performing poorly, it’s a red flag and people are going to be upset,’’ Schmidt said. ‘‘If the company is performing wonderfully, who cares.’’
Personal use of the corporate jet at Fortune 100 companies plummeted 35 percent to a median of $92,421 in 2010 from 2008. The average climbed back to $116,292 in 2012, according to Equilar, which hasn’t yet compiled the data for last year.
Companies are required to report any use of $25,000 or more. For the 50 largest S&P 500 companies that reported data, the average rose to $284,682 in 2013 from $276,014 in 2012, according to data compiled by Bloomberg. For the 10 largest, the average jumped to $259,643 last year.
‘‘If the company is performing poorly, it’s a red flag and people are going to be upset.’
While Dimon’s use doubled to $125,973, it’s below average. JPMorgan uses an independent source to calculate the amount of personal use attributed to Dimon that includes fuel, lubricants, landing fees, crew expanse and even catering, according to its proxy filing. Joseph Evangelisti, a spokesman for the bank, declined to comment.
The boards of GE and Wynn Resorts, like Boeing’s, require their chief executives to use the corporate plane for all travel. Seth Martin, a spokesman for Fairfield, Conn.-based GE, declined to comment. Michael Weaver, a Wynn spokesman, didn’t comment in an e-mail.
Oracle pays ‘‘at or below market rate’’ for Ellison’s aircraft and pilots, according to its proxy. Deborah Hellinger, a spokeswoman for Oracle, declined to comment.
Schmidt, 59, is reimbursed at $7,500 per hour for the company use of his aircraft, which is less than operational costs, the search engine said in its proxy.
‘‘Eric does not profit from the use of these aircraft,’’ the Mountain View, Calif.-based company said. Google didn’t return calls and messages seeking comment.
The winners of the rebound in corporate flying are jet makers like Gulfstream, a General Dynamics Corp. unit, and Bombardier Inc. The delivery of large jets including Gulfstream’s G650 and Bombardier’s Global 6000 rose 32 percent to 249 jets last year from 2011, while medium and small planes dropped 15 percent.
Most companies cite security as the reason they pay for chief executives to take nonbusiness trips on the plane.
Personal jet usage by Facebook’s Mark Zuckerberg and his guests totaled $650,164 in 2013 and accounted for 99.5 percent of his total compensation. The 29-year-old billionaire chief executive, who takes a $1 salary, flies on chartered aircraft ‘‘in connection with his overall security program,’’ the social-networking company said in its proxy. Tucker Bounds, a spokesman, declined to comment.
Halliburton, the Houston-based oil field services company, goes a step further. After a threat analysis from a third-party security firm, the board has directed chief executive David Lesar, his wife, and children to use the company’s aircraft for all travel. The personal use of company planes attributed to Lesar was $463,329 in 2013, up 35 percent from the previous year.