Canoo spent double its annual revenue on the CEO's private jet
Canoo, a struggling EV startup with less than $1 million in 2023 revenue and substantial losses, has paid about $1.7 million a year to a company owned by its CEO to use his private jet, prompting accusations of self-dealing and failed corporate governance. Commenters debate whether such related-party arrangements can ever be justified—especially at a near-insolvent public company—versus being tax-optimized executive perks that erode shareholder and public trust. The thread broadens into criticism of modern executive culture, weak boards, and how cheap capital and lax oversight enable CEOs to extract value even when companies are barely generating revenue.
Self-dealing and Conflicts of Interest
- Many see the jet arrangement (company reimbursing a CEO-owned entity for jet use and office “shared services”) as classic self-dealing and WeWork-style related‑party transactions.
- Critics argue that even if technically legal and disclosed, it’s ethically dubious for a near-insolvent, tiny‑revenue public company to funnel millions to entities controlled by its CEO.
- Some say conflicts should be treated as presumptively shady until robustly cleared, not hand‑waved as “normal business.”
Scale, Optics, and Clickbait Debate
- Several posters note the headline is sensational because revenue is nearly zero; in the context of hundreds of millions in annual losses, $1.7M is numerically small.
- Others respond that for a distressed startup, $1.7M is meaningful (multiple high‑impact hires) and the specific use (luxury travel, to a CEO’s own company) makes it egregious.
- There’s disagreement on whether this is mostly optics vs. a substantive governance problem.
Defenses of the CEO and Arrangement
- Defenders emphasize the CEO has personally bought over $200M of company stock, arguing he’s deeply in the red and not plausibly “looting” via a jet.
- Some say the reimbursements appear roughly market‑rate for operating a private jet, suggesting no obvious overcharge.
- A minority view: if the travel is legitimately for corporate business and cheaper than alternatives, renting the CEO’s existing jet can be rational and tax‑efficient.
Governance, Shareholders, and Legality
- Commenters stress that “bad look” ≠ “illegal”; if the board approved and it’s disclosed, it’s unlikely to be fraud.
- Others counter that public‑company CEOs cannot treat firms like private vehicles just because they are large shareholders; minority shareholders may still be harmed.
- Several suggest the board is failing its oversight role; some call for suspending the jet deal, reimbursing past amounts, or CEO resignation to restore confidence.
Broader Themes: Inequality, Jets, and Startup Culture
- Strong sentiment that private jets for small, loss‑making companies symbolize a wider “feudal” system: elites operate under different rules, with tax‑optimized perks and related‑party structures.
- Some argue private jets only rarely make true business sense; for most CEOs they are status consumption “because they can.”
- Others note that executive time, scheduling flexibility, and perceived status can have real business value, though the threshold for justifying this at a struggling EV startup is seen as very high.
EV Startup and Market Context
- Discussion touches on how capital‑intensive car manufacturing is, the difficulty of new EV entrants, and Canoo’s precarious “going concern” language.
- Some see Canoo as one of the few EV startups with plausible fleet demand and orders; others view the jet arrangement as a signal the CEO is extracting value while he can.