The HookSince both husband and wife must die before any payment comes due, it seems unclear who would be on the hook to finally repay the company loan. But a source familiar with the plan described the program as a "next-generation" benefit that pays out to survivors only after both Wise and his wife die -- and after the company has collected its repayment first.
|Wise Guys |
El Paso finds lower levels
"It's cost-neutral for the company and tax-advantaged for the executive," the source said. "About 100 of the Fortune 500 companies had policies like this." But a fresh ban on executive loans has put an end to such programs, the source added. Besides Wise, only a handful of El Paso leaders apparently took part in the plan. Austin swapped $600,000 owed to him under the old benefits plan for a $1.08 million company loan to buy his own life insurance policy under the program. Allumbaugh, who will not be seeking re-election to El Paso's board during a heated contest scheduled for this summer, gave up $1.82 million from his non-employee director compensation account to secure a $3.28 million company loan for a life insurance policy as well. Only one other person -- former general counsel Britton White -- is listed as participating in the program. But he is mentioned only in a past proxy statement that does not include loan amounts.