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I think the real issue here is that a CEO who nobody has heard of and is doing a bad job running the company claims that he needs to fly private as a business e
by TRDRVR 2y ago
I think the real issue here is that a CEO who nobody has heard of and is doing a bad job running the company claims that he needs to fly private as a business expense.
It's one think for Zuck or Tim Cook to claim that flying commercial would be dangerous and a waste of time, but the way that attitude has filtered down to very small companies is astounding (especially given the outsized negative impact private jet travel has on the rest of us).
Any reasonable board for a public company that size and a CEO that unrecognizable should at most reimburse first class fare and if the CEO wants to fly private, the delta can come from personal funds.
- blackhawkC17 2y agoI agree. It's one thing for the CEO of a large, profitable company to be flying private, but for a small, loss-making company, it feels off. The guy is already ultra-rich...he might as well pay for those flights himself to show solidarity with shareholders. But it's up to Canoo shareholders to decide that, not me.
- bombcar 2y agoThe board chooses the CEO and his salary; if the board wants to give some of the salary in the form of jet reimbursements it's not really any concern beyond them and the shareholders.
- blackhawkC17 2y agoAlso agreed. If shareholders don't want that, they're free to vote him out, or keep him if they're okay with the private flights.
- yread 2y agoIt is a concern for the tax payers if company is paying it as expense and deducting it from taxes instead of paying it as (taxed) salary and him doing what he wants with his money. Don't you have rules what can be expensed in the US?
- bombcar 2y agoYes, and corporate travel can be expensed.
- ghaff 2y agoCertainly there are rules. I would speculate that deducting a private jet flight used for business probably doesn't run afoul of those rules however.
- bombcar 2y agoAnd personal use is accounted for (if paid by the company) and remanded as salary/perks. I even got affected by that at a restaurant I worked at; they fed us and we got a small "virtual" payment that would show up on our taxes for that meal.
- bradleyjg 2y agoMy recollection (I’m not checking) is that congress passed a law restricting the deductibility of private air flights, but that there’s widespread fraud in the form of “security consultants” advising boards that such flights are necessary for security purposes and so they are deducted anyway. It’s pretty unreal when you think about it that our culture has not small cadres of credentialed, professional liars for hire. Not just for CEOs either, think about the fake service pets for another example. Is this what the kids call late stage capitalism?
- 0xB31B1B 2y agoHe is effectively paying for these flights by buying Canoo stock. This whole structure is set up to allow him to maximize the tax efficiency of his compensation. The jet travel is realized as a business expense and offsets future potential profits at the company, he also avoids paying the ~60% (federal and state income tax, as well as payroll tax paid by employer) tax that you incur paying high wage w2 employees.
- happytiger 2y agoExactly. Strangely this is actually tax efficient for both parties.
- Jochim 2y agoNot a good thing.
- KRAKRISMOTT 2y agoSays the temporarily embarrassed millionaire
- Jochim 2y agoPermanently embarrassed if we're being realistic.
- mlrtime 2y agoThis slogan is boring. The politicians play us with "eat the rich" and "fair share". Meanwhile they increase taxes on 400k in HCOL areas making it painful to succeed. Why isn't the slogan "stop the loopholes" (The one in this thread)? Because politicians play us against each other instead of fixing laws they benefit from.
- TRDRVR 2y agoMy friend, that is not how public companies work. Every common shareholder is an equal, you don't get to launder jet travel the way he's doing - that's securities fraud.
- deleted 2y ago[deleted]
- throwawaymaths 2y agoit's also sucky because we're in a rightfully very negative EV environment. Fisker Ocean sucks, Cybertruck is good? but rusting?, nobody buys the Lucid, Rivians are great but lose ~80k USD per unit for Rivian, BYD and Evergrande EV cars are filling up junkyards in china... Canoo is one of a few EV companies that on paper should make it. They have an order book that takes them to profitability. They have alpha vehicles that work (aka the product is not science fiction). Since they're selling these primarily as fleet vehicles, it's pretty valid to believe that the typical consumer EV concerns (range anxiety, nonfunctional/overbooked chargers, I live in an apartment, etc) should apply, their customers have the capital to spend, and can even easily calculate depreciation and expected benefit over existing fleet inventory. 100% of the risk in the company is manufacturing risk + not fucking up the finances e.g. by going too far into debt where the product payout doesn't make sense. That's a pretty nice place to be for being an EV company in the market now.
- hakfoo 2y agoI actually took a punt on them this week (280 shares), mostly because they're selling something so different from the rest of the market. It seems like the mainstream American EV manufacturers are very blinkered-- bigger, heavier, longer range, more luxury. Those products might appeal to buyers in the US, Canada, maybe Australia, but for the rest of the world, you're going to have to compete with manufacturers like BYD. I could see the Canoo product selling in a lot of markets that you'd never sell a Lucid Air or Rivian R1T in. Once they've got a stable base on fleet orders, I could see them acquiring a quirky street cred among consumers-- sort of like Volkswagens of the '60s and '70s.
- andy99 2y agoThere is a lot of overhead to commercial air travel, even when it's first/business. You're probably right that it's more reasonable for flying overseas. But for local travel, limitations on timing, connections, and airports served turn into a big waste of time. It's an analysis that has to be made about the value of the CEO or whoever's time, but it's not black and white, and a couple million bucks vs a few 100k for way better scheduling could easily be worth it.
- spfzero 2y agoMaybe he's anticipating making a quick getaway?
- hn_throwaway_99 2y agoLet's dispense with the fiction that there is some "need" or "business reasons" for 99% of CEOs except a very small number of examples like you mentioned to fly private. They do it simply because they can. Private jets are probably the last frontier of conspicuous consumption, and small time CEOs flying private lets them feel big and important.
- tim333 2y agoThere's quite an interesting youtube interview / chat with him out recently 'Canoo Tony Aquila Fireside' Chat https://youtu.be/AlTG8S0F_fo https://youtu.be/AlTG8S0F_fo It sounds like he's actually doing quite a good job as CEO. The vid from minute 3 to 7 gives much of his strategy and how he got into it. He was a billionaire investor with a background in car parts and servicing that looked at 12 or so EV companies to invest in and figured Canoo was the one and then the board asked him to be CEO. I guess if you are a struggling EV company looking for some billionaire to save you you may have to put up with him using a jet.
- TRDRVR 2y agoJust FYI, the stock is down 99% since he joined as CEO in March 2021. Some of that is market, but TSLA is -15% since then.