(Reuters circulated the following story on January 16.)
MIAMI — Union Pacific Corp. on Friday said CEO Dick Davidson and other senior executives of North America’s biggest railroad were paying off company loans quickly and should have no outstanding balances by Jan. 31.
Reacting to a research group’s report indicating that Davidson owed nearly $11 million to the company for loans used to purchase Union Pacific stock, spokeswoman Kathryn Blackwell said the report did not reflect large payments made by the executives.
“Mr Davidson now owes $3 million and should have that paid off by the end of the month,” Blackwell said. “The data they used seemed to be from 2002 and to come from a proxy report prepared for last April’s annual meeting.”
The Corporate Library, a research group, earlier on Friday released a report saying few executives with large loans from their companies had made much effort to repay the debts, despite an 18-month-old law banning such loans.
Union Pacific, according to the Corporate Library, had outstanding loans to 62 executives worth just under $40 million. Davidson was listed in the report as owing $10.97 million to Union Pacific.
But Blackwell said Davidson and other executives had made substantial repayments since the company’s last proxy report. The outstanding balance at Union Pacific for all such loans now stands at $8 million, she said. The new data will be published in the next proxy report due out in coming months.
Five other senior executives, including Union Pacific’s president and chief technology officer, were also repaying the loans and expected to have their balances down to zero by month’s end, she said.
Loans to other, less senior executives were also being repaid, but would not necessarily be satisfied by Jan. 31, she said. She said the great bulk of the outstanding $8 million was expected to be repaid this month.
Blackwell said Union Pacific had made the loans in recent years to encourage executives to buy more Union Pacific stock as a way to signal to Wall Street the managers’ commitment to the cargo-hauling giant and their faith in its prospects.