The proxy that Sun Microsystems (SUNW) filed late yesterday had a few interesting tidbits in it, like the hefty $1.1 million bonus paid to CEO Scott McNealy. But the item that really caught my eye was the growth in the outstanding balance that President and COO Jonathan Schwartz has on a loan made to him just days before Sarbanes-Oxley made such loans illegal. In the current proxy, the company notes that Schwartz owes $3.87 million. That’s up from the $3.66 million he owed on the loan last year.
The proxy notes that the loan was initially made to “assist Mr. Schwartz in meeting certain obligations in connection with a margin loan” (no doubt on some former high-flying stock that has since sunk) and that it is secured by Sun stock. But that also hasn’t done so well in the past year. The loan is due next summer. Will the stock that Schwartz initially bought recover by then? Will Sun stock recover? Stay tuned for the next episode….
One final note: while the proxy was filed late in the day, Sun put out this press release first thing in the morning, which makes it a classic example of a company imploring you to ignore the filing and focus on the fluff.