In financial struggles, the CEO of Express quietly pocketed a million dollars worth of benefits.
Make certain you've got a (wink wink) valid corporate justification for that jet trip. Ensure your financial analysts are aware of these journeys, so they can disclose it to regulatory bodies.
Or, in the shoes of the previous CEO of fashion retailer Express, just take the jet and cross your fingers nobody notices.
Situation: For a span of three years, when Express, beloved source of your finest going-out apparel for the Y2K era, was on a slippery slope towards bankruptcy, its CEO at the time, Tim Baxter, was making the most of almost a million dollars worth of high-level corporate perks. This included expenses linked to the CEO's authorized use of private jets for personal ventures, reported the Securities and Exchange Commission. Furthermore, Express allegedly neglected to inform investors about it, as required.
Express, which also manages Bonobos and UpWest, filed for Chapter 11 in the spring after years of plummeting sales and insurmountable challenges from fast-fashion titans such as 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.
The SEC concluded that Express had settled the charges and waived imposing a civil penalty, due to the company's cooperation with its scrutiny.
Express did not respond to CNN's request for comment.
If, by chance, you are a CEO caught indulging in unreported company-funded travels, you might just strike it rich under the incoming Trump administration.
Under the presidency of Joe Biden, the SEC has implemented a vigorous strategy in rule-making and enforcement to prevent companies from misusing investor capital. (Biden's SEC chair, Gary Gensler, has earned a reputation as a corporate bogeyman, especially in the often unruly cryptocurrency sector, for his assertive tactics.)
However, with the inauguration of Trump, it's expected that the SEC will decelerate.
"We anticipate the next Trump administration will revert to a more conventional, conservative enforcement strategy," wrote attorneys from Arnold & Porter, the multinational white-shoe law firm, in an advisory last month. They foresee a resurgence of "routine enforcement cases" similar to those seen during the first Trump administration, with a focus on "severe fraudulent conduct that adversely affects investors."
We'll have to see what Paul Atkins, Trump's appointment to head the SEC after Gensler steps down, defines as severe fraud.
In the context of the SEC's scrutiny, a new CEO might have to reconsider using company-funded jets for personal ventures without disclosure, as evident from Express's past experiences. Under the expected conservative enforcement strategy of the next Trump administration, the focus will shift towards routine cases and severe fraudulent conduct that negatively impacts investors.
