While U.S. boards have curtailed company-paid perks like hunting lodges and golf club memberships, CEOs 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: Non-business travel expenses rose for the third straight year in 2013, proxy filings show. Gone is the outrage at CEOs 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 Inc., a Redwood City, California-based company that compiles data on executive pay.

General Electric Co. Chief Executive Officer 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.

Companies like Boeing Co. and Halliburton Co. mandate the use of corporate jets for leisure trips. And flying enthusiasts like Ellison, the 69-year-old founder of Oracle Corp., and Google Inc.’s Eric Schmidt are taking it to the next level by renting their own jets to the company.

Oracle paid Wing and a Prayer Inc., 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 CEO himself, flew on his private aircraft in 2013. Schmidt, a billionaire, doesn’t profit from the deal, the company said.

Wynn Travels

Steve Wynn, the billionaire founder of Wynn Resorts Ltd., had one of the biggest bills for personal trips in 2013—$927,829. This year, the 72-year-old CEO 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 Inc. down to postage stamps and phone calls that are personal. The chairman and CEO 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, Nebraska-based company. He has fractional ownership at NetJets, a Berkshire Hathaway unit, and pays standard rates, the proxy filing shows.

Perk Comeback

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 Motor Co.’s Alan Mulally and Rick Wagoner, then at General Motors Co., 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.”

Increased Spending

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.

While Dimon’s use doubled to $125,973, it’s below average. The New York bank 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 JPMorgan spokesman, declined to comment.

The boards of GE and Wynn Resorts, like at Boeing, require their CEOs to use the corporate plane for all travel. Seth Martin, a spokesman for Fairfield, Connecticut-based GE, declined to comment. Michael Weaver, a Wynn spokesman, didn’t comment in an e-mail.

Market Rate

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.

Google’s 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, California-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.

CEO Security

Most companies cite security as the reason they pay for CEOs to take non-business trips on the plane.

Personal jet usage by Facebook Inc.’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 CEO, 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 oilfield-services company, goes a step further. After a threat analysis from a third-party security firm, the board has directed CEO 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.

“There are companies with legitimate security risks,” said Alan Johnson, founder and managing director of the New York-based compensation consultant Johnson Associates Inc. “Having them fly on the company aircraft with more security is probably a really good idea.”

Safety Record

Unlike small jets and turboprop aircraft that are flown by the owner, corporate jets match the safety record of airlines.

Since 2005, there have been no fatal accidents in the U.S. involving company-owned business jets flown by professional pilots, according to the Aircraft Owners and Pilots Association, a Frederick, Maryland-based trade group.

“The safety record compares favorably with the airlines,” said David Kenny, who keeps statistics for the trade group’s Air Safety Institute. “Professionally operated corporate flight departments have a very, very good safety record.”

Not all companies agree with paying for jaunts on the business jets.

Goldman Sachs Group Inc. doesn’t allow executives to use private aircraft for personal use, and Morgan Stanley CEO James Gorman has had an aircraft time-sharing agreement since 2010, under which he reimburses the bank for his own use of the company aircraft. Apple Inc., Microsoft Corp. and Wells Fargo & Co. don’t list personal use of corporate planes.

And beginning in 2013, AT&T Inc. required that CEO Randall Stephenson pay for the cost of his personal use of the company plane. The amount dropped to $124,780 last year from $276,391 in 2012, proxies show.

Topics New York Aviation