The CEO Of Cisco Bills The Company When He Flies In His Own Private Jet; In 2013, John Chambers billed Cisco $2.8 million in jet expenses; since 2009, Chambers has billed Cisco $11.1 million in private jet expenses

The CEO Of Cisco Bills The Company When He Flies In His Own Private Jet

JULIE BORT OCT. 18, 2013, 5:12 PM 4,803 10

Many big tech companies, like HP and IBM, keep fleets of private jets to fly their executives around in convenience, safety and style. But at Cisco, CEO John Chambers works it in reverse. He owns his own jet and then he sends Cisco a bill when he uses it for work, which he presumably does a lot. In 2013, he billed Cisco $2.8 million in jet expenses, according to forms filed with the SEC. Unlike car mileage, there doesn’t seem to be an IRS standard when reimbursing for your private jet. Chambers just has to make sure that his expense rate isn’t higher than what it would cost to hire a private chartered jet. That’s not hard to do. It will cost you $21,000 to charter a 4-passenger plane for an hour to fly from San Jose to L.A. on a JetSuite private charter (non-member rate). Blogger Brad Reese calculates that since 2009, Chambers has billed Cisco $11.1 million in private jet expenses. $2.8 million certainly isn’t a lot of money by Cisco’s standards. But just for kicks, we looked at what it would cost to fly first-class on a commercial airline (United), from San Jose, California (where Cisco is based) to Bangalore, India (where Cisco has an R&D facility). About $16,000. For $2.8 million, one person could fly 175 times, first-class to Bangalore at that rate. Or four people (a small entourage) could fly 43 times. It’s hard to tell if Cisco is getting a sweet deal by paying for Chamber’s business travel on his private jet. Most companies only disclose the reverse situation. They tell shareholders how much the company spent when executives use the corporate jets for personal travel. This is included their total compensation numbers, so presumably they pay taxes on the benefit (though many companies also pay for their executives to get help preparing their taxes.) For instance, IBM says that its CEO, Ginni Rometty, must use IBM’s jets at all times, even for personal travel, for safety reasons, according to forms filed with the SEC. In 2012, she spent $304,376 for personal travel on the corporate jets.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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