Charles Scharf, the new chief executive at Visa (NYSE: V),will have to dip into his own pocket if he decides to use the company plane to get away on holiday.
Under the terms of an agreement filed last week with the Securities and Exchange Commission, Visa will allow Scharf to use its Gulfstream jet for personal travel.
Scharf, a former executive at JPMorgan Chase (JPM) who took the reins earlier this month from retiring CEO Joseph Saunders, agreed to reimburse Visa based on factors such as fuel costs, flight crew expenses and landing fees.
The agreement states that the company's obligation to allow the perk ends when Scharf reaches $500,000 worth of personal travel during a 12-month period.
A Visa spokesman declined to comment on the record about the agreement.
But experts in corporate governance said it is relatively common for companies that own corporate jets to allow executives to take personal flights.
Under rules released in 2006 by the Securities and Exchange Commission, companies face tightened reporting requirements regarding the personal use of corporate planes. Some companies have come under scrutiny for apparent discrepancies between the reported personal use of their planes and Federal Aviation Administration records on the planes' actual use.
Paul Hodgson, a corporate governance expert at GMI Ratings, said that some companies are taking a closer look at the personal use of their planes following the enactment of the stricter reporting rules.
Speaking about arrangements for reimbursement, he said: "Basically, they would have been unheard of even as recently as two years ago."
"I would say it's actually a best practice to require some reimbursement," said Donna Anderson, head of corporate governance at T. Rowe Price. "Not all companies do that."
How frequently Scharf opts for the private jet over commercial travel remains to be seen, though the cost is unlikely to be much of a concern. Scharf is being paid a base salary of $950,000 annually, with the opportunity to earn a bonus next year of up to $4.75 million, according to a recent securities filing. Later this month, he is also scheduled to receive $19 million in restricted stock and stock options from Visa, the filing states.