If the reimbursements were solely for corporate travel, it might not be a concern.
The CEO here sold his previous company for $6.5 billion [1], so he already owned the jet before starting Canoo. The company reimburses him for corporate travel on it.
What's concerning is that Canoo is stacking big losses and living on the edge...it seems like excessive spending for a company that hasn't even made a dime of profit.
But hold on, this same CEO has spent over $230 million(!) buying Canoo stock from his personal funds [2], so he is significantly in the red no matter how much he gets reimbursed for air travel.
Always dig into the details and avoid getting suckered by clickbait...
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.
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.
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.
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.
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.
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.
Nobody informed is claiming that it's illegal. Even if it's not financially the worst thing, it's a bad look. The CEO's image is important. Already the stock price has tanked likely in part from these revelations.
Obviously, too late for canoo, but if you're running a startup you can learn from his mistakes.
Honestly at this point the reputational damage is enough, that the CEO should probably resign, if for no other reason to boost market confidence in the company and raise the value of his own shares.
How he set it up some he's leasing the jet from his own private family trust LLC fund sounds so sketchy, it reminds me of the WeWork self-dealing by Adam Neumann.
> Under a deal reached in November 2020, Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft. In 2023, Canoo spent $1.7 million on this reimbursement — that’s double the amount of revenue it generated. Canoo paid Aquila Family Ventures $1.3 million in 2022 and $1.8 million in 2021 for use of the aircraft.
> Separately, Canoo also paid Aquila Family Ventures $1.7 million in 2023, $1.1 million in 2022 and $500,000 in 2021 for shared services support in its Justin, Texas, corporate office facility, according to regulatory filings.
sound familiar?
> The 11-story office building at 88 University Place was leased to WeWork and co-owned by Neumann, the company's co-founder and CEO. It was one of many buildings that WeWork leased from Neumann. Critics called the leases a conflict of interest for WeWork and an example of self-dealing by its charismatic leader.
I guess the CEO could agree to suspend the contract with his other company until canoo is profitable, and offer to return the 3.4 million, that would be a very nice voluntary move to restore faith in his leadership.
Its concerning the conflict of interest, it can be crystal clear as going to make public pay for playing at your own golf court, but to be is baffling just how public populace is constantly scrutinised for ethics but seem that the rich can crap all over the world and no one cares
Problem is that a large part of the population is practically worshipping people who are / seem rich. Every questionable thing they do is explained away.
"It's just smart business!"
"People are jealous because they didn't think of this!"
"They're only coming after him because he's rich!"
It’s because we live in an uninterrupted feudal society that goes back millenia with only minor cosmetic changes to the system of governance in reaction to the periodic threat of revolution
Isn't this thread of 100's of comments public scrutiny? And this is just one article.
Not defending this guy but I'd say the opposite happens. When you are rich/famous you are looked at with a magnifying glass. Nothing illegal is happening here, but it doesn't "look good".
> But hold on, this same CEO has spent over $230 million(!) buying Canoo stock from his personal funds [2], so he is significantly in the red no matter how much he gets reimbursed for air travel.
He's not the only shareholder. I am not sure the others appreciate paying for the CEO's lavish lifestyle when his company is on the brink of failure, even though the CEO is also in the red. And as you say, if he really wants to travel private, he can always use his own plane and not charge anything for it. The other shareholders are basically bankrolling his plane.
Can someone explain why people try to make new cars from the ground up, rather than "fork" a base platform from GM/Toyota/KIA/whoever with a different design and little features?
This happens in literally every other market and industry. hell, just look at PCs and laptops.
Like why can't a Canoo or Rivian license a base EV platform and come up with their own chassis design, infotainment system, and other little things to differentiate themselves?
The headline is relatively clickbait-y. Its double their revenue because their revenue is basically 0. Their actual expenses are hundreds of millions, of which this 1.7 million is a drop in the bucket. Once their upfront expenses are paid they will (presumably) be making hundreds of millions/billions in revenue, which means this 1.7m is not particularly important.
You can talk about standard complaints of CEOs with private jets, and I'd probably agree with you here, but there isn't anything particularly egregious here.
$1.7 million is 1-3 employees working to ship your product. When you're company is on the edge of collapse you should have your priorities straight. Diverting company resources to your own private jet is a preposterous use of resources and, imo, speaks volumes about where Canoo is headed.
1.7 million is 1-3 employees? Jesus this place is so out of touch. I've worked at places with annuals between 1 and 5 million and none of them had less than 10 people. most between 15-30
The $1.7m is being paid to the family holdings of the CEO to rent the jet already belonging to the CEO for the CEO. Plus an additional $1.7m to the same holdings for "support services."
CEOs get all kinds of compensation. Business jet travel, security, etc. This line item could be just tax optimization for this guy.
I am not trying to defend him, he is getting paid a lot:
"On May 5, 2023, the Board granted Mr. Aquila an award of 6,884,682 RSUs. These awards vest on May 5, 2024, subject to continuous service." [1]
At current stock price it is ~$20M. Getting outraged about additional $1.7M that was negotiated several years ago is strange. It does make a great headline, but would it change anything if he is paid $22M and pays for the jet out of pocket?
Totally agree. I'm not usually in the habit of defending millionaires. But I thought there used to be a justification for private jet travel of maximizing the CEO's time. The company is investing $20M per year in this asset and he's probably flying for meetings all the time and if a private jet cuts a couple hours of airport transit / wait time off of each flight it's probably worth it for the increased amount of meetings he can attend.
Maybe that can be achieved for less than $1.7M, I'm not informed enough. This source https://simpleflying.com/gulftream-g700-cost-to-own-operate-.... says it's a little more than $2M per year to operate a Gulfstream G700, I don't know what kind of jets CEOs are using these days.
Imagine if all salaried employees working from an office created a personal LLC to own their car, and then had their work compensate them by reimbursing each employees LLC.
Still, why would you use a private jet if your company is not only not profitable, but also doesn't generate meaningful revenue? You're not spending money you've earned, you're spending borrowed money.
Not a drop in the bucket at all, its a massive waste for a startup on the edge of insolvency. They need to focus on priorities and spend much more carefully. No way does a small startup founder need a private jet.
"Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient additional funding or do not have access to additional capital, we will be unable to execute our business plans and could be required to terminate or significantly curtail our operations."
I mean, it seems pretty bizarre to me for a CEO of a company that doesn't have any revenue to have a private jet paid for by that company. Is that... common?
(Honestly, even if they had revenue in the hundreds of millions, it'd still be rather absurd.)
> Under a deal reached in November 2020, Canoo reimburses Aquila Family Ventures, an entity owned by the CEO (Tony Aquila), for use of an aircraft. In 2023, Canoo spent $1.7 million on this reimbursement — that’s double the amount of revenue it generated. Canoo paid Aquila Family Ventures $1.3 million in 2022 and $1.8 million in 2021 for use of the aircraft.
I'm surprised there are any employees left at the company. If I saw that the CEO is actively funneling funds out of the company where we work, to their family's company, I'll be long gone.
I'm not fan of the guy by any measure, but how is this any different than the government paying to make any president's existing properties places where a president and his massive entourage can stay? It's been done by every president I can remember aside from maybe Clinton because I don't remember him having any significant places.
If he actually uses the jet for Canoo-related business, this is not unreasonable.
Assuming those trips may eventually lead to business deals, and that the amounts reimbursed are in line with free market prices, it is advantageous to Canoo.
Their CEO could be x% "more effective" (I know how abstract that sounds), ultimately benefiting the company, and maybe they even got a good deal ("hey, I own a jet, and it has to fly at least 200 times per year to cover its maintenance costs. If you allow me to use it for Canoo-related trips, which are anyway needed, and reimburse me, I'll charge you less than what netjets wold cost us. Deal? Y/N")
The real world tends to be more nuanced, but in principle it stands, at least until proven guilty/shady.
Ethics in the 21st century I guess. No, conflicts work the opposite way - assumed shady until cleared. Virtually every business works this way, especially ones with investors. Conflicts can of course be legitimately cleared, but not with just some hand-waving. It is no different than my company not allowing me to direct business to entities owned by myself or my family.
This is no unheard of. I worked at a company where the CEO got an interest-free loan from the company to buy his own jet, then charged the company to use it.
Of course that individual later pled guilty to a variety of federal crimes, so :shrug:
It may also be part and parcel of the market they're trying to play in.
If every other "car company" has a private jet ready to whisk the CEO anywhere in the world, you might look really silly to other companies who expect you to be able to make a near last minute meeting.
And if you're an employee, as long as you get paid you're likely not to care much about it.
In what way is he funneling money into the company?
> The company generated $886,000 in revenue in 2023 compared to zero dollars in 2022 [...] In 2023, Canoo spent $1.7 million on this reimbursement — that’s double the amount of revenue it generated. Canoo paid Aquila Family Ventures $1.3 million in 2022 and $1.8 million in 2021 for use of the aircraft.
Tony Aquila is the CEO of both companies - Canoo and Aquila Family Ventures. I'll never understand why it's okay for CEOs to have multiple concurrent jobs, while one of the biggest fervors of the pandemic was when employees were found to have... multiple concurrent jobs.
Do you manage your own money and finances in addition to having a day-job?
That's what he's doing, albeit in a more complex situation and likely higher wealth bracket given he sold his last company for $Bs. The only thing that strikes me as odd about it is calling oneself "CEO" of the family office. I don't know what title is customary but CEO seems out of place. If it said he was "Chair" of the Aquila Family Ventures family office or something it would stand out far less.
Being a CEO of your family office shouldn't really be a "real job" - it should take up maybe a day or two out of your month if it's being run correctly. To me this would be the same as if a product manager had a side hustle doing some accounting for friends and family. It's fine.
The selling services back and forth thing, I get it, it probably saves some people some work and it might even work out better economically for the company, but the optics are never going to be solid and people are always going to question it, so imo it's not worth it, but... it is quite common.
It’s fine for anyone to have multiple concurrent jobs as long as all their employers know about it. Hiding things is where people get into trouble (and not just with jobs).
This is a totally fair point. The incongruity arises for me in that if I said in a job interview process that I'd be continuing to hold another position while adding this one, I'd get laughed out of the room. If it's critical that rank and file guys don't have divided time or loyalties, why is the standard different for the single person most responsible for success or failure of the company?
Sounds like a hold co. Even startups worth 100K may have the founders hold the stock through a family holding corporation (which may then also be used to "hold" vehicles).
Because CEO's decide which is okay and which isn't, and because fuck you, that's why.
No, it's not logical, or consistent, or rationally defensible. They don't give a shit, and they don't believe they have you answer to you. If they choose to give any answer at all, it will be bullshit in the "On Bullshit" sense of the word; the answer will not be made with any consideration for truth, but just to provide whatever words the speaker thinks will shut you up.
This but unsarcastically. Linux Torvalds, Anders Hejlsberg, and other elite developers also operate under totally different rules than worker bees too.
No, we're not on the same footing as a CEO candidate or 10x developer. Anyone who is sure as heck wouldn't be wasting their life collecting karma points on HN.
Such deals are reasonable under some circumstances. For example, Tesla pays SpaceX for Musk's travels on the SpaceX jet (whenever he travels for Tesla-related business).
But definitely not for a company with just a few $100k in annual revenue that's teetering on bankruptcy. Not surprised it's a SPAC stock...
Edit: Upon digging; I discovered that this CEO has invested $230 million+ in Canoo (from personal funds he made selling his previous company)...this article is almost a nothing burger.
It’s a public company, he can’t treat it as his private company even if he invested $230M and it’s only worth $150M now and he’s trying to make up for his losses
I'm beginning to think the vast majority of corporate governance is a facade and that this is just a way to blow millions of dollars with no real accountability.
The money would probably be nice but I suspect a lot of people here would hate the amount of travel and the degree of scheduling morning, noon, and night that the CEO of any size of company has.
Readit News
The CEO here sold his previous company for $6.5 billion [1], so he already owned the jet before starting Canoo. The company reimburses him for corporate travel on it.
What's concerning is that Canoo is stacking big losses and living on the edge...it seems like excessive spending for a company that hasn't even made a dime of profit.
But hold on, this same CEO has spent over $230 million(!) buying Canoo stock from his personal funds [2], so he is significantly in the red no matter how much he gets reimbursed for air travel.
Always dig into the details and avoid getting suckered by clickbait...
1- https://www.reuters.com/article/idUSL1N11J0PS/
2- https://www.secform4.com/insider-trading/1399053.htm
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.
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.
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.
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.
'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.
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Obviously, too late for canoo, but if you're running a startup you can learn from his mistakes.
Honestly at this point the reputational damage is enough, that the CEO should probably resign, if for no other reason to boost market confidence in the company and raise the value of his own shares.
> Under a deal reached in November 2020, Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft. In 2023, Canoo spent $1.7 million on this reimbursement — that’s double the amount of revenue it generated. Canoo paid Aquila Family Ventures $1.3 million in 2022 and $1.8 million in 2021 for use of the aircraft.
> Separately, Canoo also paid Aquila Family Ventures $1.7 million in 2023, $1.1 million in 2022 and $500,000 in 2021 for shared services support in its Justin, Texas, corporate office facility, according to regulatory filings.
sound familiar?
> The 11-story office building at 88 University Place was leased to WeWork and co-owned by Neumann, the company's co-founder and CEO. It was one of many buildings that WeWork leased from Neumann. Critics called the leases a conflict of interest for WeWork and an example of self-dealing by its charismatic leader.
"It's just smart business!"
"People are jealous because they didn't think of this!"
"They're only coming after him because he's rich!"
"You would do this too if you were him!"
Not defending this guy but I'd say the opposite happens. When you are rich/famous you are looked at with a magnifying glass. Nothing illegal is happening here, but it doesn't "look good".
He's not the only shareholder. I am not sure the others appreciate paying for the CEO's lavish lifestyle when his company is on the brink of failure, even though the CEO is also in the red. And as you say, if he really wants to travel private, he can always use his own plane and not charge anything for it. The other shareholders are basically bankrolling his plane.
The investment does sound absolutely reasonable at this point.
This happens in literally every other market and industry. hell, just look at PCs and laptops.
Like why can't a Canoo or Rivian license a base EV platform and come up with their own chassis design, infotainment system, and other little things to differentiate themselves?
why does it HAVE to be all or nothing?
If you are the sole owner, that's all fine.
If there are co-owners, that shouldn't be done unless everyone gets some benefits.
I once worked for a company that went bust. It wasn't able to pay its suppliers anymore, but alway paid rent on time. Guess who owned the building.
So especially when your company is doing bad, any money you get out is money they cannot take away.
Hint - Most ultra-rich people make their money in boring industries you wouldn't even know about.
1- https://www.macrotrends.net/stocks/delisted/SLH/solera-holdi...
You can talk about standard complaints of CEOs with private jets, and I'd probably agree with you here, but there isn't anything particularly egregious here.
Good lord. You hiring?
The rest is bs clickbait.
So even if it's "a drop in the bucket", it's also not really a company expense, just an outrageous compensation.
Like the guy already has a jet, which presumably he can afford to run.
Taking money out of an unprofitable company to pay for (somewhat) unreasonable personal expenses kinda feels off to me.
But then, maybe I'd feel differently if I had a private jet ;)
Definitely don't subcontract your own family's (edit: your own) "services company".
I am not trying to defend him, he is getting paid a lot:
"On May 5, 2023, the Board granted Mr. Aquila an award of 6,884,682 RSUs. These awards vest on May 5, 2024, subject to continuous service." [1]
At current stock price it is ~$20M. Getting outraged about additional $1.7M that was negotiated several years ago is strange. It does make a great headline, but would it change anything if he is paid $22M and pays for the jet out of pocket?
[1] https://ir.stockpr.com/canoo/sec-filings-email/content/00016...
Seems like the CEO's comfort when travelling should be a lot lower in the company's list of priorities, as it's losing hundreds of millions a year.
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Maybe that can be achieved for less than $1.7M, I'm not informed enough. This source https://simpleflying.com/gulftream-g700-cost-to-own-operate-.... says it's a little more than $2M per year to operate a Gulfstream G700, I don't know what kind of jets CEOs are using these days.
> Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft.
Would that pass muster?
"Our management has performed an analysis of our ability to continue as a going concern and has identified substantial doubt about our ability to continue as a going concern. If we are unable to obtain sufficient additional funding or do not have access to additional capital, we will be unable to execute our business plans and could be required to terminate or significantly curtail our operations."
(Honestly, even if they had revenue in the hundreds of millions, it'd still be rather absurd.)
I'm surprised there are any employees left at the company. If I saw that the CEO is actively funneling funds out of the company where we work, to their family's company, I'll be long gone.
His voters love him.
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Assuming those trips may eventually lead to business deals, and that the amounts reimbursed are in line with free market prices, it is advantageous to Canoo.
Their CEO could be x% "more effective" (I know how abstract that sounds), ultimately benefiting the company, and maybe they even got a good deal ("hey, I own a jet, and it has to fly at least 200 times per year to cover its maintenance costs. If you allow me to use it for Canoo-related trips, which are anyway needed, and reimburse me, I'll charge you less than what netjets wold cost us. Deal? Y/N")
The real world tends to be more nuanced, but in principle it stands, at least until proven guilty/shady.
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Of course that individual later pled guilty to a variety of federal crimes, so :shrug:
If every other "car company" has a private jet ready to whisk the CEO anywhere in the world, you might look really silly to other companies who expect you to be able to make a near last minute meeting.
And if you're an employee, as long as you get paid you're likely not to care much about it.
He's not. He's funneling funds into the company. He's basically a billionaire investor who owned the jet before bailing out Canoo.
> The company generated $886,000 in revenue in 2023 compared to zero dollars in 2022 [...] In 2023, Canoo spent $1.7 million on this reimbursement — that’s double the amount of revenue it generated. Canoo paid Aquila Family Ventures $1.3 million in 2022 and $1.8 million in 2021 for use of the aircraft.
Or maybe it's a case of "time to renegotiate my salary with that in mind". ;)
That's what he's doing, albeit in a more complex situation and likely higher wealth bracket given he sold his last company for $Bs. The only thing that strikes me as odd about it is calling oneself "CEO" of the family office. I don't know what title is customary but CEO seems out of place. If it said he was "Chair" of the Aquila Family Ventures family office or something it would stand out far less.
The selling services back and forth thing, I get it, it probably saves some people some work and it might even work out better economically for the company, but the optics are never going to be solid and people are always going to question it, so imo it's not worth it, but... it is quite common.
No, it's not logical, or consistent, or rationally defensible. They don't give a shit, and they don't believe they have you answer to you. If they choose to give any answer at all, it will be bullshit in the "On Bullshit" sense of the word; the answer will not be made with any consideration for truth, but just to provide whatever words the speaker thinks will shut you up.
No, we're not on the same footing as a CEO candidate or 10x developer. Anyone who is sure as heck wouldn't be wasting their life collecting karma points on HN.
This is WeWork level sketch: “ Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft”
This is a PUBLIC company??
But definitely not for a company with just a few $100k in annual revenue that's teetering on bankruptcy. Not surprised it's a SPAC stock...
Edit: Upon digging; I discovered that this CEO has invested $230 million+ in Canoo (from personal funds he made selling his previous company)...this article is almost a nothing burger.
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I mean there's a reason they didn't do it, because they couldn't.