Being a CEO comes with its own set of challenges and rewards. You're always on duty, held accountable for any mishaps, and at the mercy of external factors that can potentially devastate your business. However, the compensation is substantial, and the perks are numerous, such as the use of a private jet for travel.

It's crucial to ensure that any personal use of the company's aircraft is justified by legitimate business reasons and that your financial team is aware of these trips to report them to federal authorities. Or, as was the case with the former CEO of fashion retailer Express, you could simply use the jet without drawing attention to it.

The Express Case: A Million-Dollar Perk

Here's what happened: During the three years leading up to Express's bankruptcy, its then-CEO, Tim Baxter, was reportedly enjoying nearly a million dollars' worth of executive benefits, including personal use of chartered aircraft authorized for the CEO's use, as stated by the Securities and Exchange Commission (SEC). It's alleged that Express failed to disclose this information to investors as required.

Express, which also manages Bonobos and UpWest, filed for Chapter 11 bankruptcy in the spring following a decline in sales and intense competition from fast-fashion giants like Zara. Over the summer, a joint venture led by WHP Global and three of the retailer's landlords—Simon Property Group, Brookfield Properties, and Centennial Real Estate—acquired the company out of bankruptcy.

Regulatory Response: The SEC's Role

The SEC noted that it settled the charges against Express and decided not to impose a civil penalty, acknowledging the company's cooperation during the investigation. "Without admitting or denying the SEC's findings, Express consented to a cease-and-desist order," the SEC stated in a press release. Express did not respond to requests for comment.

Changing Tides: The Impact of Political Administration

For CEOs who might be tempted to take advantage of unrecorded company-funded travel, the incoming Donald Trump administration could be a boon. Under President Joe Biden, the SEC has been proactive in rule-making and enforcement, striving to prevent companies from misappropriating investors' funds. (Biden's SEC chair, Gary Gensler, has become a figure of corporate concern, particularly in the historically chaotic cryptocurrency sector, due to his assertive approach.)
However, with January's change in administration, Trump's SEC is anticipated to slow down. "We anticipate that the next Trump administration will revert to a more traditional, conservative enforcement agenda," wrote lawyers for Arnold & Porter, a multinational law firm, in a recent advisory. This includes a return to "standard enforcement cases that we observed during the first Trump administration," with a focus on "flagrant fraudulent conduct that harms investors." It remains to be seen what Paul Atkins, Trump's nominee to lead the SEC after Gensler's departure, will consider as flagrant fraud.

The CEO's Burden: Responsibilities and Scrutiny

As the CEO of a company, the responsibilities are immense, and the scrutiny is constant. The position demands a constant vigilance and a commitment to ethical practices, especially when it comes to the use of company resources. The case of Express and its former CEO serves as a cautionary tale for executives who might be tempted to blur the lines between personal and professional use of company assets. It's not just about the financial implications; it's also about maintaining the trust of investors and the public.

The SEC's Mission: Ensuring Transparency

The SEC's role in regulating the financial markets is to ensure transparency and fairness. When a company like Express fails to disclose significant executive perks, it undermines this principle. Investors have a right to know how their money is being spent, and any deviation from this expectation can lead to legal consequences. The SEC's decision to settle with Express without a civil penalty highlights the importance of cooperation in such investigations, but it also sends a message that non-disclosure is a serious matter.

Future Implications: Corporate Governance Under New Administration

The change in administration and the potential shift in the SEC's enforcement approach raise questions about the future of corporate governance and accountability. While a more conservative enforcement agenda might focus on the most egregious cases of fraud, it's essential that all companies, regardless of size or industry, maintain a high standard of transparency and ethical behavior. The reputation of a company and its leadership is on the line, and the consequences of failing to meet these standards can be severe.

A Call to Action: Ethical Leadership

For current and aspiring CEOs, the lesson is clear: maintain strict oversight over the use of company resources, ensure full disclosure to investors, and uphold the highest ethical standards. The perks that come with the position are significant, but they come with a responsibility to act in the best interests of the company and its stakeholders. The alternative is not just legal repercussions but also the potential loss of trust and credibility, which can be far more damaging in the long run.

Conclusion: Integrity in Leadership

The story of Express and its former CEO is a stark reminder of the importance of integrity in leadership. As the SEC continues to play a critical role in regulating the financial markets, companies and their executives must remain vigilant in their commitment to transparency and ethical conduct. The future may hold changes in enforcement priorities, but the fundamental principles of corporate governance should remain a priority for all.