[TRDRVR]

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]

I 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.

[0xB31B1B]

He 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.

[randycupertino]

Interestingly, he also had a lawsuit at his prior company for excessive use of private jet use on personal travel:

https://www.repairerdrivennews.com/wp-content/uploads/2019/0...

> Aquila Commits Misappropriation Of Solera Assets And Resources

> After execution of the Separation Agreement and Omnibus Agreement, Solera confirmed that prior to his separation from the Company, Aquila had misappropriated Solera’s resources and money by fraudulently claiming that certain flight and hotel expenses were for Solera business, when in fact, Aquila incurred these expenses solely on personal, non-Solera business—including fundraising for his intended new investment venture.

> Specifically, Aquila used a private jet chartered by Solera (Gulfstream IV- SP-N910AF) solely for Aquila’s personal business, but nevertheless charged the flights to Solera, between November 2018 and May 2019—i.e., when Aquila was still Solera’s President and CEO. For example, Aquila had Solera pay over $700,000 for 45.8 hours of flight time for Aquila’s trips to, among other places, Austria, Switzerland, Germany, Bulgaria, Qatar, Kuwait, and France, as well as thousands of dollars for certain hotel expenses associated with certain of these trips. These trips were not for Solera business. Aquila traveled for personal purposes, including in connection with his position as the Chairman of the Board of Sportradar and to fundraise for his new “Founders Select” venture.

> Solera is continuing to investigate Aquila’s pre-separation activities with respect to any further instances of fraud, theft, misappropriation, or other actions of Aquila giving rise to claims that are not released under the Separation Agreement.

[TRDRVR]

My 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.

[fnordpiglet]

It’s actually not fraud because it’s happening in the open with board approval. And, no not every share holder is an equal. A share holders relevance is proportional to their voting power. While you can’t outright fleece a shareholder, it’s not the case that a single share held is worth the same as is given the same rights as someone holding 51% of all shares. At that point they effectively own the company. The company still has residual responsibility by law and regulation to all shareholders but it not nearly as broad as you seem to paint. This structure described is absolutely ok. Further the fact it’s publicly disclosed almost entirely insulates them - if you don’t like it, vote your shares or sell it on the public market.

[TRDRVR]

>He is effectively paying for these flights by buying Canoo stock.

If a CEO is intentionally creating a situation to make a company unprofitable and paying it back by buying shares, that is 100% securities fraud and I'm stunned anyone disagreed with that assertion.

[fnordpiglet]

Yes but that’s actually not what’s happening, so seems a bit of a non sequitur.

[happytiger]

Exactly. Strangely this is actually tax efficient for both parties.

[Jochim]

Not a good thing.

[KRAKRISMOTT]

Says the temporarily embarrassed millionaire

[mlrtime]

This 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.

[Jochim]

Permanently embarrassed if we're being realistic.

[bombcar]

The 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.

[yread]

It 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?

[ghaff]

Certainly 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]

And 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]

My 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?

[bombcar]

Yes, and corporate travel can be expensed.

[blackhawkC17]

Also 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.

[throwawaymaths]

it'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]

I 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.

[hn_throwaway_99]

Let'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.

[andy99]

There 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.

[tim333]

There's quite an interesting youtube interview / chat with him out recently

'Canoo Tony Aquila Fireside' Chat 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]

Just 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.

[spfzero]

Maybe he's anticipating making a quick getaway?