As Express was circling the drain, its CEO secretly took home $1 million in perks
New York
CNN
—
Part of the deal with being a CEO is that you're never off the clock, you get blamed for everything that goes wrong and you have no control over the outside forces that can absolutely wreck your business. But in exchange, you get a fat paycheck and a bunch of perks, like access to a private jet.
Just make sure there's a (wink wink) legitimate business reason for that jet trip. And make sure your accountants know about those trips, so they can disclose it to federal regulators.
Or, in the case of the former CEO of fashion retailer Express, just take the jet and hope no one notices.
Here's the deal: In the three years that Express, the source of all your best going-out tops for Y2K parties, was sliding into bankruptcy, its CEO at the time, Tim Baxter, was taking advantage of nearly a million dollars' worth of C-suite perks, including "certain expenses associated with the CEO's authorized use of chartered aircraft for personal purposes," according to the Securities and Exchange Commission. And Express allegedly didn't tell investors about it like it was supposed to.
Express, which also operates Bonobos and UpWest, filed for Chapter 11 in the spring after years of declining sales and insurmountable challenges 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.
The SEC said it settled the charges against Express and declined to impose a civil penalty, citing the company's cooperation with its investigation.
"Without admitting or denying the SEC's findings, Express agreed to a cease-and-desist order," the SEC said in a press release.
Express didn't respond to CNN's request for comment.
Of course, if you do happen to be a CEO who's engaging in a bunch of off-the-books company-funded rides, you might be in luck under the incoming Donald Trump administration.
Under President Joe Biden, the SEC has taken an aggressive approach to rule-making and enforcement, trying to make sure companies don't, you know, take investors' money and squander it. (Biden's SEC chair, Gary Gensler, has made himself something of a corporate bogeyman, especially in the historically unruly crypotcurrency sector, for his forceful approach.)
But come January, Trump's SEC is expected to hit the brakes.
"We expect the next Trump administration will return to a more traditional, conservative enforcement agenda," wrote lawyers for Arnold & Porter, the multinational white-shoe law firm, in an advisory last month. That includes a return to "garden variety enforcement cases that we saw during the first Trump administration," with a focus on "egregious fraudulent conduct that harms investors."
We'll have to wait to find out what Paul Atkins, Trump's pick to run the SEC after Gensler steps down, considers egregious fraud.
