Failure to Heed SEC Reporting Requirements for Aircraft ‘Perks’ May Cost More than Money

Oct. 13, 2025

Non-business use of company aircraft, heightened security procedures and other benefits often granted to CEOs and other high-level executives may run afoul of U.S. Security and Exchange Commission (SEC) reporting requirements for public companies.

The 2025 NBAA Tax, Regulatory & Risk Management Conference delved into the complexities of how the SEC interprets perquisites (“perks”) and methods to properly calculate the costs of those uses.

NBAA Tax Committee Chair Ryan DeMoor, head of aviation tax at MySky, emphasized that the SEC has different priorities than other familiar alphabet agencies. “The FAA’s top priority is safety; the IRS generates revenue for the government,” he said. “The SEC’s top priority is transparency for the investors.”

Applying a critical eye can prevent aggravation and penalties down the line. For example, travel on the company aircraft by the CEO or other named executive officers to a board meeting is usually allowed; a weekly commute to their office in Florida is harder to justify to SEC officials.

Furthermore, computing the correct disclosure cost for such perks is not a simple calculation. The SEC does not accept the standard industry fare level (SIFL) used by the IRS to determine the value of personal use of a business aircraft.

Instead, companies determine the aggregate incremental cost of the flight in question, and “there’s really no specific guidance on what to include,” said Sean Fitzgibbons, lead aviation counsel for Walmart.

Companies might opt to compute the average costs for all flights over a given period, including variables like fuel and catering, and apply that to determine the aggregate incremental cost. Another option is to utilize third-party industry data for the same purpose, and while that is often easier, “I would want to be really careful about that,” Fitzgibbons said. “Make sure you have the data to support that your actual costs [align] with the industry averages.”

That holds true even when the travel perk is due to heightened security requirements for executives following the fatal December 2024 attack on a healthcare company CEO. While changes have been proposed to permit greater flexibility in reporting, DeMoor added, none are yet codified.

Consider the Optics

Failure to properly disclose such uses may result in severe consequences, with criminal charges for extreme violations.

One recent case yielded a $1 million penalty to a company for failure to note that 85% of the $3 million paid to dry lease an aircraft went back to the aircraft’s owner, who was also the company’s CEO. In another example, a company self-reported a $1.3 million discrepancy, with the SEC levying a $75,000 penalty with no admission of guilt. “That basically saved them from the guillotine,” DeMoor said.

However, the greatest hit may not be financial. Fitzgibbons noted enforcement action against one well-known Fortune 500 company revealed use of the company aircraft for “travel to sporting events and personal activities [and] using the executive assistant for activities outside of the business.

“That was a pretty big stain for the company,” he added.

“We all know in this room about the optics of private aircraft usage,” DeMoor said. “Feeding into that narrative is not a great thing. By reporting properly, you’re avoiding another data point that they can use to further their case.”