The frequent fliers of Chesapeake Energy could get their wings clipped thanks to a recently filed lawsuit over the company's travel perks. The pending case is the latest salvo in the war between shareholders and executives over corporate jets and shows, yet again, why companies need to diligently review compensation packages and how they record and report costs for private use of corporate aircraft.

On May 8, Chesapeake shareholder Gilberta Norris of Virginia filed a complaint against the natural gas producer in its home state of Oklahoma. She claims the cost of air-travel benefits afforded to its executives and directors has been systematically under-reported.

It is even more baggage for those leading a company embroiled in turmoil. An inquiry by the SEC is underway, sparked by revelation that CEO Aubrey McClendon borrowed nearly $1.1 billion against his personal stake in company wells. Already a poster child for what critics see as runaway executive compensation (in 2008, he took home a $75 million bonus and $32.7 million in stock atop his $975,000 base salary), McClendon has now come under additional scrutiny amid accusations he was also running a $200 million hedge fund from the Chesapeake C-Suite.

The new lawsuit zeroes in on the company's fractional ownership of several airplanes operated by NetJets, a Berkshire Hathaway subsidiary. Chesapeake allows executive officers use of the aircraft for both business purposes and personal reasons, a perk it has told shareholders “greatly enhances productivity and work-life balance” and “may impact their willingness to work to, or beyond normal retirement age.” Each non-employee director is also entitled to personal use of company aircraft for up to 40 hours of flight time per calendar year. McClendon's contract allows him unlimited travel.

From 2007 to 2011, Chesapeake's directors and officers made personal flights that, according to Norris, cost shareholders nearly $14 million.

According to the lawsuit, Chesapeake has long claimed that because personal flights were “limited” and “primarily for business purposes,”  it needed to only disclose trip-specific variable costs, not fixed costs. Among those fixed expenses would be a one-time acquisition cost to purchase factional interest and a monthly management fee (pilot salary, training, hangar costs, general maintenance, insurance, administration, etc.).

Norris claims that if these fixed costs were included the actual cost of personal trips would be as much as $10 million more, a burden that should come at the expense of those individuals, not shareholders. The suit also challenges the idea that Chesapeake's extremely well-compensated directors are nevertheless considered non-employees. In 2011, these directors earned a total of $4.8 million, an average of $533,163, roughly two to three times the compensation offered by median Fortune 500 companies.

Since 2006, SEC Regulation S-K has presented a two-tiered approach for evaluating whether a perk like jet travel is a personal benefit. First, is a test of whether it is “integrally and directly related to the performance of the executive's duties.”

Failing to meet that definition, a direct or indirect benefit that has a personal aspect is considered a perk “unless it is generally available on a non-discriminatory basis to all employees.” It then requires that any personal benefit exceeding $10,000 in value be identified. If a benefit exceeds the greater of $25,000, or 10 percent of total perks, a company must disclose the value.

Personal use of a company/chartered plane by family members, even if they accompany an executive or director, is considered a perquisite and must be identified with the aggregate share of the cost to the company disclosed.

In recent years, lawsuits over undisclosed corporate travel perks have become more common and companies like EMC, Comcast, and YUM! Brands have raised the hackles of shareholders over jet-setting expenses. In 2011, the SEC launched an informal inquiry into Nabors Industries over undisclosed trips to resort areas, jaunts by executives that were estimated by the Wall Street Journal as costing more than $700,000.