Embattled business aviation provider Wheels Up’s Securities and Exchange Commission (SEC) Form 8-K released on May 9 reveals that outgoing chairman and CEO Kenneth Dichter will continue to receive his $950,000 annual salary for the next two years. Dichter, who founded Wheels Up and will remain a director on its board, will also receive a lump sum payment of $3 million, “which represents an amount in lieu of a bonus payment that could otherwise be payable under the Employment Agreement, dated April 17, 2020,” according to Tuesday’s filing. Dichter will also “be eligible to receive a prorated annual bonus based on the number of days he was employed during fiscal year 2023.” A Form 8-K is defined by Wikipedia as “a very broad form used to notify investors in United States public companies of specified events that may be important to shareholders or the United States Securities and Exchange Commission.”
The outgoing executive will also continue to receive company health insurance coverage, as well as be eligible for 200 hours per year travel on Wheels Up aircraft, among other benefits.
Wheels Up is facing financial headwinds and recently announced plans for a possible reverse stock split, followed by the addition of new executives, leading up to the May 9 announcement of Dichter’s departure, included in the Form 8-K.
Aviation consultant and contributing writer Brian Foley wrote on Forbes.com that recovery options for current Wheels Up management could include securing more investment cash from its largest shareholder Delta Air Lines, a possible return to the private sector and further fundraising and/or combining with a “strategic” (long-term financial strategist). Foley wrote: “Reorganizing through bankruptcy is another possibility, and if a private equity or other acquirer ever became involved, would presumably be a prerequisite.” Though a Wheels Up spokesperson told the online news source Private Jet Card Comparisons, “We are not considering bankruptcy.” The news site also reported today that Wheels Up has just cut flight pricing up to 26 percent under new flight-services agreement.
