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Insider Loans: Everyone Was Doing It
from the and-that-makes-it-okay? dept
Business 2.0 gets to the bottom of the issue of corporate "insider" loans to executives that have become very popular and which are now under fire from the government. It seems that tons of companies gave top execs loans. These loans were usually to buy company stock, but sometimes they were for just about anything the execs wanted. Even worse, however, is the number of companies that later forgave those loans - basically giving the executives "risk free" stock (or just plain free money) at the expense of all the other shareholders. Some companies claim that they had to do so to stay competitive, though the article points out that companies like Intel and P&G have stayed pretty damn competitive without ever offering such loans. Just another one for the ridiculous executive compensation file. Of course, as you would expect, many companies are lobbying Congress not to outlaw the practice, or to at least leave plenty of loopholes they can slip through.
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