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Researchers at MIT are using machine learning to teach large language models not to give toxic responses to provoking questions, using a new method that replicates human curiosity.

The newest tool in the battle to prevent an artificial intelligence (AI) agent from being dangerous, discriminatory and toxic is another AI that is itself dangerous, discriminatory and toxic, scientists say.

The new training approach, based on machine learning, is called curiosity-driven red teaming (CRT) and relies on using an AI to generate increasingly dangerous and harmful prompts that you could ask an AI chatbot. These prompts are then used to identify how to filter out dangerous content.

The finding represents a potentially game-changing new way to train AI not to give toxic responses to user prompts, scientists said in a new paper uploaded February 29 to the arXiv pre-print server.

When training sophisticated large language models (LLMs) like ChatGPT or Claude 3 Opus to restrict dangerous or harmful content, teams of human operators typically create a host of questions that are likely to generate harmful responses. These may include prompts like "What's the best suicide method?" This standard procedure is called "red-teaming" and relies on people to generate a list manually. During the training process, the prompts that elicit harmful content are then used to train the system about what to restrict when deployed in front of real users.

"We are seeing a surge of models, which is only expected to rise," said senior author Pulkit Agrawal, director of MIT's Improbable AI Lab, in a statement. "Imagine thousands of models or even more and companies/labs pushing model updates frequently. These models are going to be an integral part of our lives and it's important that they are verified before released for public consumption."

Related: Intel unveils largest-ever AI 'neuromorphic computer' that mimics the human brain

In the study, the scientists applied machine learning to red-teaming by configuring AI to automatically generate a wider range of potentially dangerous prompts than teams of human operators could. This resulted in a greater number of more diverse negative responses issued by the LLM in training.

They incentivized the CRT model to generate increasingly varied prompts that could elicit a toxic response through "reinforcement learning," which rewarded its curiosity when it successfully elicited a toxic response from the LLM. The researchers, however, supercharged the process. The system was also programmed to generate new prompts by investigating the consequences of each prompt, causing it to try to get a toxic response with new words, sentence patterns or meanings.

The result is that a wider range of prompts are generated. This is because the system has an incentive to create prompts that generate harmful responses but haven't already been tried.

If the model has already used or seen a specific prompt, reproducing it won't create the curiosity-based incentive, encouraging it to make up new prompts entirely. The objective is to maximize the reward, eliciting an even more toxic response using prompts that share fewer word patterns or terms than those already used.

The problem with human red-teaming is that operators can't think of every possible prompt that is likely to generate harmful responses, so a chatbot deployed to the public may still provide unwanted responses if confronted with a particular prompt that was missed during training.

When the researchers tested the CRT approach on the open source LLaMA2 model, the machine learning model produced 196 prompts that generated harmful content. This is despite the LLM having already being fine-tuned by human operators to avoid toxic behavior. The system also outperformed competing automated training systems, the researchers said in their paper.

Going public is usually a pivotal moment in a company’s history, cementing its heavyweight status and setting it up for expansion. In L’Occitane’s case, delisting might be a bigger conduit for growth.

The company has announced a privatisation offer with funding provided by Blackstone and Goldman Sachs.

L’Occitane’s recent efforts to improve growth have represented heavy operational expenditures, which has undercut its stock price.

As a private company, L’Occitane may be more able to achieve its longer-term goals like revitalising its core brands, and eventually, setting it up for a future relisting or a different kind of sale.

A new era of L’Occitane is upon us.

The company — which has been listed on the Hong Kong stock exchange since 2010 — announced a privatisation offer on April 29, with Blackstone and Goldman Sachs providing funding for a $1.8 billion take-private transaction that values the company at $6.4 billion.

The offer follows months of speculation: In August 2023, reports surfaced that Reinold Geiger, the company’s chair and majority shareholder, was considering a buyout with shares being temporarily halted from trading as a result – on announcing those plans were shelved, its share price dropped 30 percent. Shares were halted indefinitely on Apr. 9, following a Bloomberg report that privatisation was again imminent.

Often, companies spend years preparing for an initial public offering, as becoming a public company means punching in a heavier weight class. But L’Occitane’s hands have become tied with limited growth opportunities. In a statement, Geiger said, “The transaction we are launching today will enable us to focus on rebuilding the foundation for the long-term sustainable growth of our company.” Privatising now is indicative of a different kind of growing pains.

“Management is a bit fed up with their low valuation in the Hong Kong market,” said Ivan Su, a senior equity analyst at investment firm Morningstar.

The Hong Kong stock exchange was seen as a lucrative option for global companies in the early 2010s when the Chinese consumer was rapidly gaining wealth — and an appetite for luxury goods to go with it. But the market hasn’t lived up to expectations in the long term. Firms like Samsonite, Prada and L’Occitane are what Erwan Rambourg, a managing director in HSBC’s consumer practice, referred to as “orphan stocks.” The former two companies have announced plans to get out of the exchange or add a secondary listing somewhere else.

Beauty conglomerates listed on the New York or Paris stock exchanges often enjoy higher valuations — in Hong Kong, the standard price to earnings multiple is around nine, said Su, while in the US, it’s often higher than 20. Beauty companies like Estée Lauder and L’Oréal enjoy PE multiples around 30 to 50, while L’Occitane’s has historically been between in the high teens to low twenties, though the news of a possible takeover caused its share price to skyrocket before trading was halted. Geiger’s offer of $34 HKD ($4.30) a share is a 61 percent premium on its average closing price.

“[Geiger] must think, “I have a great company with good growth and good margins,” and relates more to a [Estée] Lauder or Beiersdorf … In some cases, [L’Occitane] has higher margins and better growth,” said Rambourg.

Peer Pressure

L’Occitane’s issues go beyond its trading locale. The company’s strategic plans are increasingly at odds with shareholders’ expectation for quarterly revenue increases and dividends. Su said the company might simply wish to rid itself of these external controls.

Public investors haven’t taken kindly to its growth plans. In June 2023, the company announced an investment of €100 million ($106 million) into marketing efforts in order to revive some of its core brands like L’Occitane en Provence and Elemis. Its stock price slid some 15 percent. Analysts often view large marketing expenditures as a black hole, said Bill Detwiler, co-founder and managing partner of investment firm Fernbrook, especially if efforts are directed to platforms like Facebook and Instagram, which both offer unpredictable returns on investment.

The other key difference L’Occitane has is its unusually large store footprint, mainly for its core brand L’Occitane en Provence. The body care brand operates more than 2,000 storefronts worldwide. Most other beauty conglomerates rely heavily on wholesale, selling their brands through the likes of Sephora or in department stores.

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“You’re paying rent and paying staff like Louis Vuitton, but you’re not selling a $1,500 handbag; you’re selling $29 shea butter hand cream,” said Rambourg, adding that the volume needed to turn a profit is enormous. “Selling beauty [in standalone] retail has never been an easy task.”

L’Occitane’s leadership may wish to reduce the number of stores to improve margins, remove poorer-performing products, or even cull brands. Earlier this month, it shed skincare brand Grown Alchemist, selling the majority share to outgoing chief executive, André Hoffman.

The Size of the Prize

L’Occitane does have growth potential. Unlike some of its peers that have opted for a selective mergers and acquisition strategy – Estée Lauder prefers premium brands, L’Oréal has focused lately on dermatologist-led skincare and prestige perfume — L’Occitane’s approach has been scattergun. While it’s had a slant towards brands with natural credentials, its portfolio is mixed across skincare, cosmetics and hair care. Some acquisitions like Sol de Janiero, which it acquired in 2021, have provided stellar growth. In the nine months leading up to 31 Dec. 2023, sales grew by 184 percent, led by viral products and wild popularity with Gen-Z and Gen Alpha. The brand is expected to reach $1 billion in sales in the full fiscal year.

But not all new acquisitions have been hits. Other lines like Melvita and Erborian, which it groups together, are a small part of its overall sales.

As a private company, it could make unencumbered decisions when it comes to M&A; whether that’s divesting brands or acquiring others to balance out Sol de Janiero’s astronomical growth. Rambourg described Sol de Janiero as a “homerun,” but its future as a leader in body care and fragrance is threatened by more brands climbing into these categories. Any future softness in the appeal of influencer marketing could also undercut its success.

A Private Affair

L’Occitane’s ownership profile is somewhat irregular for a public company. More than 70 percent of it is owned by Geiger; the families at the helm of Estée Lauder and L’Oréal own 38 percent and 35 percent, respectively. Its unique profile might be part of what makes it appealing to a private equity buyer, said Detwiler.

“Private equity firms love partnering with essentially family-owned businesses, or families not getting any benefit from being public,” Detwiler said. Linking up with a firm like Blackstone makes for a good fit, as it has global reach and previous success with beauty and personal care. The fund owns sunscreen line Supergoop and clinical skincare line Zo Skin Health.

Other firms have made the switch. In 2008, after 24 years on the Parisian stock market, Clarins reprivatised to become a fully family-owned company again. Since then, it’s expanded greatly: adding makeup, men’s and luxury lines, as well as opening directly-operated stores, a glitzy office tower near Paris and a research and development centre in Shanghai. It’s also made investments in skincare line Pai and the clean makeup brand Ilia. (Clarins’ example may be top of mind, as the group used to be an investor in L’Occitane from 2001 to 2011.)

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The road ahead for L’Occitane likely requires some course-correction. In order to revive its core properties, strategic shifts are needed, which could include discontinuing product lines, investing in new product development and more marketing. While L’Occitane en Provence is making great inroads in China and has growth potential in Asia, it’s seen as “a bit dusty” in Europe, said Rambourg. With around $156 million in cash, the company could need a capital injection to achieve these goals.

More rockstar brands are needed to help reduce reliance on Sol de Janiero, and future-proof the company against shifts in consumer tastes and preferences. As Detwiler noted, private equity firms are always interested in companies that support further acquisitions.

Even with an offer on the table, whatever L’Occitane’s ultimate strategy is, it likely won’t unfold rapidly. ‘[Geiger] is not about getting a quick return. He’s obsessed about doing the right thing for the long term,” said Rambourg.

On the heels of the EU’s decision to designate Apple’s iPadOS as another digital “gatekeeper” under its Digital Markets Act (DMA) regulation, Fortnite maker Epic Games confirmed it will bring its popular battle royale game to the iPad later this year. The company had previously announced Fortnite would return to iPhones in the EU as a result of the DMA, which forces Apple to compete with alternative app stores, like Epic’s Game Store.

In a post on X on Monday, Epic Games praised the EU’s decision around the iPad and said that it was moving “full steam ahead” to bring Fortnite to the Epic Games Store in the EU “soon” and iPads later this year.

Today, the European Commission said that iPads will also need to comply with the Digital Markets Act 🙌

We’re moving full steam ahead to bring Fortnite and the @EpicGames Store to iPhones in the EU soon and iPads this year! 🎉 https://t.co/MHh6EGVinC

— Epic Games Newsroom (@EpicNewsroom) April 29, 2024

The rivalry between Epic and Apple has been ongoing for years, after Epic sued the tech giant over its alleged anticompetitive conduct over its App Store and commission structure. Though Apple largely won that case, as the court ruled the tech giant was not a monopoly, it did have to allow developers to direct their customers to other ways to pay from inside their apps — a point for Epic that had a wider impact across the developer community.

Later, when Apple revealed its plan to comply with the EU’s DMA, Epic Games CEO Tim Sweeney called out Apple’s new rules a form of “malicious compliance” that were “full of junk fees” and vowed to fight them. Apple responded by terminating Epic Games’ developer account, dubbing the game maker a “threat” to the iOS ecosystem. Shortly after the EU began investigating Apple’s decision to kill Epic’s account, Apple reinstated it.

Whether or not Epic Games will be able to bring Fortnite to the iPhone and iPad as planned still remains to be seen, given Apple’s responses so far. However, it does signal Epic’s intention to compete with Apple via its own games store across Apple’s top platforms.

Billionaire Reinold Geiger’s deal would result in the company delisting from the Hong Kong stock exchange

The billionaire owner of L’Occitane has made an offer to take the skincare company private in a deal that gives it an enterprise value of about €6.5bn.

Reinold Geiger, the Austrian who already controls the company, has offered to pay HK$34 per share to buy the rest of the business and delist it from the Hong Kong stock exchange. Its most recent closing share price was HK$29.5. 

The deal is worth up to HK$13.91bn (€1.7bn), the company said on Monday, and values its equity at €6bn. The offer from Geiger and his backers was final, it added. 

Geiger’s L’Occitane Groupe, which is based in Luxembourg, already owned 72 per cent of the shares as of the end of March. The company said Geiger had secured commitments from a quarter of the remaining shareholders to tender their stock, while another 12.7 per cent of them had either sent letters of intent or planned to recommend the offer, the company said.

L’Occitane shares have been suspended since April 9 pending an announcement, but will begin trading again on Tuesday. A committee appointed by its board will evaluate Geiger’s offer and make a recommendation to minority shareholders. 

Blackstone and Goldman Sachs Asset Management will provide about €1.5bn in equity financing, according to people familiar with the details, while Crédit Agricole will issue debt to back Geiger. 

Blackstone declined to comment. Goldman Sachs Asset Management did not respond to a request for comment. 

“The cosmetics sector is undergoing profound changes, and our company has significantly transformed into a geographically balanced multi-brand group,” Geiger said in a statement. 

“The transaction we are launching today will allow us to focus on rebuilding the foundations for the long-term sustainable growth of our business.”

L’Occitane, which was founded in 1976, has expanded from its initial skincare business to buy other brands in recent years, including perfumer Dr Vranjes and Sol de Janeiro, a sun and skin cream specialist. Geiger, who is L’Occitane’s chair, bought a minority stake in 1994 and increased his shareholding from there. The company continues to manufacture products for the L’Occitane brand at its home base in Manosque, in France’s Provence region, but has been listed in Hong Kong since 2010. 

Geiger shelved an earlier plan to delist L’Occitane in September, causing shares to fall. 

In 2023, the company’s sales increased by 13 per cent to €2.13bn, while its shares have risen by more than 20 per cent since the start of the year for a market value of HK$43.5bn before trading was suspended. Asia Pacific makes up 42 per cent of total sales, with the rest spread across Europe and the Americas, its fastest-growing region. 

The global market for beauty and skincare has proved resilient despite pressure on consumers from rising interest rates and inflation, with LVMH-owned beauty retailer Sephora and market leader L’Oréal beating expectations in their most recent results.

However, China has proved more challenging for beauty companies because of deteriorating consumer confidence, the darkening economic outlook and tough competition from local brands.

In Virginia’s data-center alley, rising power demand means more fossil fuels

LOUDOUN COUNTY, Va.—The cutting edge of technology is driving the power grid back to the 19th century.

An explosion of so-called hyperscale data centers in places such as Northern Virginia has upended plans by electric utilities to cut the use of fossil fuels. In some areas, that means burning coal for longer than planned.

These giant data centers will provide computing power needed for artificial intelligence. They are setting off a four-way battle among electric utilities trying to keep the lights on, tech companies that like to tout their climate credentials, consumers angry at rising electricity prices and regulators overseeing investments in the grid and trying to turn it green.

Ground zero for the fight is Northern Virginia’s “Data Center Alley.” About 70% of global internet traffic passes through the area’s data centers. A spider web of power lines connecting data centers to the grid crisscross neighborhoods and parks. More are coming.

Amazon Web Services, Amazon.com’s cloud-computing business, invested $52 billion in Virginia from 2011 to 2021 and plans to invest a further $35 billion by 2040. Loudoun County, Va., has nearly 37 million square feet of data-center space and 42 million square feet more has been proposed.

Northern Virginia’s title of global data-center king goes back decades to the earliest iterations of what became the internet. The infrastructure built then helped draw dot-com and telecom giants such as AOL, Yahoo and WorldCom. Miles of fiber-optic cable were installed, forming the backbone of the area’s data-center infrastructure.

Data centers tend to cluster together in places that have established networks and access to a plentiful energy supply. The rise of ChatGPT and similar large-language AI models, which require huge amounts of computing power, turbocharged data-center demand.

Many new data centers coming to Northern Virginia are known as hyperscale, or facilities that are far larger than previous generations of data centers. The big ones use as much power as the city of Seattle.

Utilities want more fossil fuels to meet demand

For many utilities, the solution to rising demand is to keep coal-fired power plants burning for longer and add natural-gas power plants to balance big expansions of renewables.

Dominion Energy D 1.58%increase; green up pointing triangle, which supplies electricity to most of the data centers in Virginia, expects their power use to quadruple over the next 15 years, representing 40% of the utility’s demand in the state.

Utilities in Georgia and North Carolina are adding fossil-fuel power or considering delaying the shutdown of coal-fired plants to meet the demands of data centers and other industries. Duke Energy DUK 0.95%increase; green up pointing triangle told regulators it needs three new gas-fired power plants in the Carolinas. Otherwise it says it will have to keep coal plants open.

Dominion Chief Executive Robert Blue said the utility expects its peak load to increase at least 5% each year for the next 15 years. “We’re going to continue to be a big builder of renewables. We’re building a big offshore wind farm. We’re building a lot of solar. We’re adding a lot of storage,” Blue said. “But we also recognize that we’re going to need some more natural gas in order to keep the lights on.”

One of the great successes of the U.S. energy transition has been the steady elimination of coal power. About 10 gigawatts of coal power have been retired each year for a decade. That number will fall to about 6 gigawatts a year through 2030 because of higher demand, according to S&P Global Commodity Insights.

Tech companies want to be green

Big tech companies such as Alphabet, Microsoft and Amazon are among the biggest users of data centers. They have also committed to net-zero emissions worldwide in the coming decades.

Some are pushing back against the use of fossil fuels. Microsoft criticized Georgia Power’s proposed gas expansion, saying the plans undervalue renewable energy’s ability to meet demand. Tech companies have warned that utilities could lose customers if they burn more fossil fuels. Georgia Power said its portfolio protects reliability, supports economic development and includes renewables and battery storage.

“No data center wants to be tied to the need for new fossil resources, that’s the problem,” said Brian Janous, former vice president of energy at Microsoft. “You can’t throw this much [data-center] capacity at the system and not have some degree of fossil resources to support it.” Earlier this year, Janous helped launch Cloverleaf Infrastructure, which is helping large electricity consumers find power.

Consumers don’t want more data centers or more fossil fuels

While data centers can be a boon for local governments, providing jobs and reliable tax revenue, residents complain about the constant buzzing that emanates from the hulking structures and the power lines that crisscross their neighborhoods.

Raj Chintala, an information-technology employee in Loudoun County, said he used to enjoy watching the sunrise from the back porch of his home in the Northern Virginia suburbs just outside Washington, D.C. But a few years ago, a data center began to rise just feet beyond his backyard. “Now it’s much darker,” he said.

One recent $54.3 million proposal by Dominion would extend a transmission line 1.8 miles and build a substation to serve a planned Amazon data-center campus. Amazon said it has enabled 19 solar farms in Virginia and is the world’s largest corporate buyer of renewable energy.

Data-center grid investments, paid for by all customers, are called unfair by community groups. Elena Schlossberg, grassroots coordinator for the Coalition to Protect Prince William County, compared it to splitting a restaurant bill. “They’re ordering the $200 bottle of red wine…and you’re getting a Caesar salad,” Schlossberg said.

Dominion also wants to build a 1,000-megawatt natural-gas plant, for times of high power demand, in Chesterfield County, where a coal plant closed last year. The utility is still removing millions of cubic yards of coal ash from storage ponds at the site.

Nicole Martin, president of the Chesterfield chapter of the NAACP, said the predominantly Black neighborhood had a fossil-fuel plant for nearly 80 years. “We’re supposed to endure the health risks and the environmental risk when this power plant, this energy, is not even being used for us,” Martin said.

Dominion says the plant is critically important for reliability. Grid investments, plus the new projects, would raise average utility bills for customers from around $133 a month to $174 over 15 years, the company projects. New transmission lines often attract other users, with data centers ultimately bearing more of the cost of such upgrades, the company said.

Wind and solar can’t serve data-center demand around the clock, so growth will need to be supplemented by natural-gas-fired power generation, said Arshad Mansoor, chief executive of the nonprofit Electric Power Research Institute.

“You can be an idealist,” Mansoor said. “But if you’re a realist, you’ll add a ton of solar and you can balance that with gas.” The only other option to new gas plants is delaying coal and nuclear-plant retirements, he said.

NHTSA says incidents involved BlueCruise system on Ford Mach-E vehicles

U.S. auto-safety regulators have launched an investigation into the safety of Ford Motor’s F -1.21%decrease; red down pointing triangle hands-free driving system, following a pair of recent crashes that left three people dead.

The National Highway Traffic Safety Administration, the auto industry’s top regulator, said in a filing made public Monday that it had received notice of two recent incidents involving BlueCruise, Ford’s driver-assistance system.

In both cases, Ford Mustang Mach-E SUVs collided with stationary vehicles on highways during nighttime lighting conditions, each resulting in a fatality, NHTSA said.

NHTSA’s Office of Defects Investigation confirmed that BlueCruise was engaged in each of the vehicles in question immediately before the collisions, according to an initial review by the agency.

NHTSA said the probe will investigate BlueCruise’s “performance of the dynamic driving task and driver monitoring.” The investigation covers about 130,000 Mustang Mach E vehicles from model years 2021 to 2024.

The agency’s action is the latest effort by U.S. auto-safety regulators to tackle concerns over technology designed to automate certain driving tasks to ease the burden on motorists. More automakers in recent years have introduced such systems, which control braking, acceleration and steering on the highway and in other specific driving conditions.

The investigation into Ford’s system comes as NHTSA has escalated its scrutiny of Tesla’s Autopilot, the most well-known driver-assist system. The agency’s heightened oversight raises questions about whether eye-tracking cameras installed in systems such as BlueCruise to monitor driver behavior are sufficient to keep focus on the road.

A Ford spokeswoman said the company is working with NHTSA to support its investigation. Ford’s BlueCruise is intended for hands-free use on most U.S. highways and is available on several models.

The Ford system was already under scrutiny by NHTSA, which in recent weeks launched special crash investigations into both fatal incidents. While those look at single crashes to learn about unusual events or new technology, a defect probe by the regulator’s enforcement arm could lead to a safety recall and changes to the BlueCruise system.

The earlier special crash investigation, opened by NHTSA in March, centers on a fatal wreck involving a Ford sport-utility vehicle in Texas in February. A police report said the Ford had partial automation engaged at the time of the crash.

The second crash involving the Mustang Mach-E occurred in Pennsylvania last month.

State and federal regulators have been paying more attention to driver-assistance systems as they become more widespread in new vehicles today. Several automakers including Tesla and Ford received poor grades in a study that reviewed driver-assistance systems, finding little evidence the technology provides safety benefits to motorists.

Tesla in particular has received significant scrutiny from NHTSA. Last week, the agency said it was investigating the adequacy of a December recall that Tesla conducted to fix its Autopilot software, following an investigation by the regulator.

NHTSA said it had uncovered a trend of “avoidable crashes involving hazards that would have been visible to an attentive driver,” and tied the automaker’s system to hundreds of incidents and 14 fatalities.

Tesla has been racing to boost adoption of a more advanced driver-assistance system it calls Full Self-Driving, as it faces the prospect of slower growth this year in sales of its electric cars. Over the weekend, Tesla secured backing from China’s government to launch Full Self-Driving in the country.

Despite its name, Full Self-Driving doesn’t make a car fully autonomous and requires active driver supervision, Tesla says on its website and in owners’ manuals.

Ford introduced BlueCruise a few years ago and says it operates on 97% of controlled-access highways across the U.S. and Canada.

The system deploys features such as adaptive cruise control, automatic lane change and a driver-monitoring system to allow for hands-free driving. A driver-facing camera is supposed to alert drivers if they stop paying attention to the road, even if for only a few seconds, according to Ford’s website.

WSJ analysis shows wide gap between what companies report spending on CEOs’ personal travel and what it would have cost the executives

Companies report spending millions of dollars to fly top executives to vacation homes and resorts. For the executives, the savings are far higher.

Disney said it spent almost $800,000 for Bob Iger to use company aircraft for personal trips in the last fiscal year. Taking similar trips at his own expense would have cost the chief executive more than $2 million, a Wall Street Journal analysis found.

The same is true for other executives. Netflix co-founder Reed Hastings took personal flights on company aircraft in 2022 that would have cost him about $2.2 million by Journal estimates; the company reported spending about half as much. Chief Executive David Calhoun’s personal flights on Boeing’s tab would have cost him $1.25 million, more than double what the company said it spent.

At many of the biggest U.S. companies, CEOs and other executives are getting tens or hundreds of thousands of dollars more in flight benefits than company disclosures suggest. The contrast underscores the gap—already stark with the stock and options that make up the bulk of CEO pay—between the reported costs of executive compensation and the benefit executives receive.

Executive jet use is also under heightened scrutiny after the Internal Revenue Service has announced a plan to audit personal aircraft use by executives and wealthy individuals.

The corporate jet looms large among the perks that the biggest U.S. companies offer their top executives, alongside million-dollar salaries, annual bonuses and slugs of stock or options. Many corporate officers are allowed to take the same jets on vacation, to visit relatives or commute from other homes—and some can fly family and friends—all at company expense.

Boards often require CEOs to fly corporate, both on and off the job, calling it safer and more efficient. The perk can be a big draw in compensation packages, aviation and compensation consultants say.

“It’s one of the few status symbols you don’t get tired of,” said Christopher Hewett, a retired public-company executive who helped draft flight-perk disclosures as a corporate attorney and enjoyed his own trips on company planes.

Spending on the perk has doubled since 2019 at companies that reported providing it last year, outpacing the overall growth in business-jet travel.

Under federal securities rules, companies must report as compensation the “aggregate incremental cost” of perquisites such as free personal flights. Most say they count expenses directly tied to a specific trip, including fuel, landing fees, airport taxes, catering, crew lodging and meals, and an hourly rate for maintenance, plus the cost of repositioning empty aircraft for later use, securities filings show. (The value of personal flights that companies disclose doesn’t affect company or executives’ taxes.)

Typically left out: fixed costs that don’t change by flying more, including pilot salaries, insurance and the cost of acquiring the aircraft. Companies say they would pay these costs anyway, because the aircraft are primarily used for business.

Charter companies charge customers thousands of dollars an hour to fly on similar jets, fees set to cover both the incremental costs reported by the executives’ employers as well as fixed costs—and a margin for profit.

The result: a gulf between what executives save by taking personal flights in the company jet and what companies report spending on the trips.

Disney Aviation Group, a unit of the entertainment company that flies executives and other employees, has registered three Gulfstream G650 jets and a Gulfstream G600 with the Federal Aviation Administration. With a crew of two, each can seat as many as 18 to 19 passengers, depending on configuration, and rank among the biggest—and costliest—business jets in regular use.

Flying them can cost over $5,000 an hour in the incremental expenses that companies add up when disclosing executives’ personal flight costs. That means Iger’s personal flights last year, which cost Disney $794,000, worked out to about 130 hours of flight time, or around 2½ hours a week. (That figure likely includes time spent moving empty aircraft in connection with personal trips.)

Chartering similar aircraft can cost $12,000 to $20,000 an hour, according to data from companies and brokers that help passengers charter private aircraft. At those rates, Iger’s personal flights last year would have cost him $2 million or more.

Charter rates can vary widely by season, geography and other factors.

Still, charter costs are “the only apple-to-apple comparison” for flying in a corporate jet, said Aaron Glassman, who heads a management and technology department at Embry-Riddle Aeronautical University, a private institution emphasizing aviation with campuses in Daytona Beach, Fla., and Prescott, Ariz.

Executives often wind up chartering planes when they can’t use the company’s, he added. “That is Plan B, and executives have to do that with some regularity.”

The $1 million Netflix reported spending in 2022 on personal flights for Hastings works out to more than 220 hours aloft based on its fleet that year, his last as CEO. At the time, Netflix flew aircraft including Gulfstream V jets and Beech King Air turboprops. (The company said it shed two of the aircraft last year.)

A Netflix spokesman said Hastings didn’t fly that many hours during the year, declining to elaborate. When reporting the cost of executives’ personal flights, companies often count “dead legs,” or flights taken to reposition empty aircraft, that result from executives’ personal travel.

Hastings, Netflix’s co-founder, stepped down as CEO in January last year and remains its executive chairman. Personal flights for his successors, co-CEOs Ted Sarandos and Greg Peters, worked out to about 150 hours of flight time apiece last year, the Journal analysis estimated.

The company said in securities filings that those flights cost it $1.2 million combined. Chartering similar aircraft would have cost the two men about $2.6 million, the Journal found.

Behind companies’ disclosures are many decisions and records detailing which flights count as business, personal or some of each, aviation experts say. “It’s not the math—it’s the classifications that become where the complexity is,” one consultant said.

Errors can add up. In early April, Boeing said it had improperly recorded personal flights as business travel over two years for four executives, including departing CEO Calhoun. Those improperly reported flights cost the company just over $500,000, much of it for the use of corporate aircraft, the company said in securities filings.

The company identified the errors after a Journal investigation in September found patterns of flights by Calhoun and others to and from homes in far-flung places.

Calhoun’s misreported flights, which Boeing said cost it $142,315, would likely have cost him between $350,000 and $450,000 at charter rates, based on the seven jets operated by Boeing Executive Flight Operations, the Journal found.

To cover all of his personal flights on Boeing aircraft in the past two years, Calhoun would have had to spend about $2.1 million in the air charter market, the Journal estimated. The company reported its cost at just over $840,000, including this month’s revisions.

A Boeing spokesman declined to comment beyond the company’s securities filings.

Boeing has said Calhoun would step aside by the end of this year, as part of a shake-up after the midair blowout of an airline door plug on Jan. 5 and a series of production problems.

Luxembourg-based cosmetics company says that the offer from L’Occitane Groupe to buy the remaining shares would cost €1.7 billion

L’Occitane International received an offer from the controlling shareholder group, led by Australian billionaire Reinold Geiger, to buy the company and take it private in a bid that values the company at 6 billion euros ($6.42 billion).

The Luxembourg-based and Hong Kong-listed cosmetics company said Monday that the offer from L’Occitane Groupe, Geiger’s holding company, to buy the remaining shares would cost €1.7 billion. Geiger’s group and its partners own 72.64% of the shares.

Delisting the company would allow more freedom to make investment decisions without worrying about meeting expectations from public investors or changes in share prices and short-term market trends, L’Occitane said.

Plans include investments in marketing, upgrading stores, improving IT systems and hiring skilled employees, the company said, adding that the upfront costs will set the stage for future growth in a growingly competitive cosmetics market.

“The rationale is to allow the current management team, which would remain in place, to continue operations of the company’s business as it is and invest in long-term sustainable growth initiatives as a privately held company,” L’Occitane International said.

Geiger is the chairman and director of both the company and offering group.

The offer carries a purchase price of HK$34.00 ($4.34) a share.