Kerry Lynch stepped into the role of editor of the&nbsp;Aviation International News&nbsp;monthly magazine in May 2022 after serving with&nbsp;AIN&nbsp;for eight years. She joined&nbsp;AIN&nbsp;in December 2014 as a senior editor covering Washington and business aviation news. She has also served on Convention News teams, including as editor of&nbsp;HAI Convention News. Lynch previously spent 25 years with Aviation Week. During her time there, she reported for and later steered&nbsp;The Weekly of Business Aviation, oversaw business aviation content on the&nbsp;Aviation Week Intelligence Network, served on the&nbsp;Show News&nbsp;staff, and held roles as the Washington columnist for&nbsp;Business &amp; Commercial Aviation&nbsp;and&nbsp;Overhaul &amp; Maintenance&nbsp;monthly magazines. In 2021 she was honored with the National Business Aviation Association Platinum Wing Award for lifetime achievement in journalism and was the 2004 recipient of the National Air Transportation Association’s Aviation Journalism Excellence Award. She also has been a recipient of an Aerospace Media Award for business aviation (2022) and NBAA Gold Wing Award (2003, 2024). Lynch graduated from The Ohio State University with a bachelor of arts in journalism.

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NBAA is urging business aircraft operators to ensure they are following perquisite (perk) disclosure requirements, pointing to a recent $1.75 million fine the U.S. Securities and Exchange Commission (SEC) levied against Dow Chemical.

 


Earlier this month, the SEC announced that Dow had agreed to settle charges of inadequate perquisites disclosures that included the “CEO’s personal use of Dow aircraft and other expenses.” The SEC found that from 2011 to 2015, Dow failed to ensure that $3 million in perquisites provided to the CEO were properly disclosed as compensation.

 


The SEC said Dow should have applied the agency’s “perquisite test," involving “disclosure of personal benefits not widely available and not integrally and directly related to an executive’s job duties.” But Dow opted for a “business purpose test” that the agency at one time had considered including in disclosure rules but ultimately decided against.

 


In addition to paying the civil penalty, Dow agreed to hire an independent consultant to recommend changes to the company’s perquisite disclosure policies and further to implement changes.

 


“Publicly available information on the case indicates some flights made by Dow’s chief executive were authorized by the company but not properly disclosed for SEC purposes,” said Scott O’Brien, NBAA senior director of government affairs. “In general, public companies must determine the value of a perk provided to certain executives based on its aggregate incremental cost (AIC) to the company. This must be reported as ‘other compensation’ in the company’s proxy statement.”

 


The SEC order deems that an item is not a perquisite/personal benefit if it is “integrally and directly” related to the performance of the executive’s duties, NBAA said. Otherwise, it is considered a perquisite if it provides a director or indirect personal benefit, “without regard to whether it may be provided for some business reason or for the convenience of the company, unless it is generally available on a nondiscriminatory basis to all employees.”

 


The order said Dow instead used a standard under which a “business purpose related to the executive’s job was sufficient to determine that a benefit would not be a perquisite that required disclosure,” according to NBAA.

 


“We encourage our members to review their procedures and policies on how they are calculating and reporting their aggregate incremental costs,” said O’Brien. “Companies also need to be clear on what types of flights they are reporting.”

 


NBAA will further discuss SEC disclosures and non-business use of aircraft during its Tax, Regulatory &amp; Risk Management Conference on October 14 and 15 in Orlando, Florida.

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