Though we rarely devote two posts to the same filing, one of our tipsters pointed us to something else in Dell’s (DELL) proxy: Michael Dell’s expensive flying habit, which cost the company over $4 million last year. That’s a 42% increase over the $2.8 million that Dell (the company) reimbursed Dell (the CEO) for personal use of a corporate jet that Michael Dell owns. Here’s how the company describes this expense in the filing, which is not included in the summary comp table where a reasonable person might expect to see this disclosure. Instead, it’s at the bottom of p.42 under related party transactions. Here’s a snip:
Prior to July 2008, certain of our executive officers owned private aircraft, either outright or through fractional share ownership arrangements. Under our executive travel policy, which was approved by the Leadership Development and Compensation Committee of the Board, Dell reimbursed certain executive officers for the cost of using their private aircraft while traveling on Dell business. The reimbursement covered variable costs, plus a pro rata portion of the management fees, attributable to the executive’s Dell business travel, but did not cover any depreciation or other reimbursement for capital costs or purchase price. Mr. Dell continues to own his own private aircraft and the company will continue to reimburse him for the covered variable costs, plus a pro rata portion of the management fees attributable to his business travel.
While the $4 million is by far the biggest number we’ve seen this proxy season — only Abercrombie & Fitch’s (ANF) Michael Jeffries came close — it brings up an interesting question about just how real the numbers are that companies listed for personal use of the corporate jet this proxy season. We’ve seen all sorts of numbers and all sorts of disclosures about those numbers, which makes it pretty difficult to compare. Some companies for example, listed $125 in personal use — a number that may come close to covering the bottled water bill on a flight, instead of actually allowing someone to fly anywhere.
Perhaps, as the SEC is thinking about additional pay disclosures (as the WSJ reported today), they’ll add getting a better number for all of that Gulfstream travel to their list.
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