My fellow Fool Alyce Lomax is a master at pantsing corporate managers when they think they can pad their pockets at shareholders' expense. Last week, she highlighted the red-faced folks at Bank of America (NYSE: BAC) as a shareholder proposal wagged a ticked-off finger at the company over certain relocation reimbursements for its executives.

Her article got me thinking about my favorite section of the proxy statement: related-party transactions. It's a section that talks about the deals that the company has made that involve current company executives. This could be hiring the brother of the CFO or awarding a contract to a company that is partly owned by a company director.

Often this section ends up being pretty lame, but sometimes you can find some very interesting dirt in it.

Winner!
Chesapeake Energy
(NYSE: CHK) probably has some of the best disclosures of any company I've seen. In 2009, its proxy detailed the $12 million purchase of a set of historical maps from its CEO. It also became a founding sponsor of the Oklahoma City Thunder, an NBA team that the CEO owns 19% of (it continues to pay to be a sponsor today). It also spent $177,150 for catering services from a restaurant where the CEO was a 50% owner.

Not that all that was particularly shocking -- Chesapeake is a corporate governance train wreck. In 2010, for example, it paid its CEO $21 million and let him ring up $500,000 worth of personal travel in the corporate jets and provided $250,000 in personal accounting services and paid $119,135 for personal security. Which all probably felt like nothing to shareholders after his $112 million payday in 2008.

As a result, I want nothing to do with the company, though it's worth noting that my fellow Fools have made it a newsletter recommendation in part because so many people overlook the business because of the apparent lack of internal discipline.

CEOs gone wild
But it's not just at Chesapeake that you can find these fun little nuggets. Let's take a tour of a few others.

  • At Comstock Homebuilding (Nasdaq: CHCI), the company leases its corporate headquarters from a company wholly owned by Comstock's CEO. The company has also sold condos to a company owned by the CEO, taken out loans from a company owned by the CEO, and given business to a construction company owned by the CEO.
  • Life Partners Holdings (Nasdaq: LPHI) was a company I picked on yesterday, and I'm happy to do it again. The company pays a company owned by the CEO's spouse $15,000 a month for certain services related to the insurance policies it brokers. The company also sold an airplane to the CEO and now pays him for the use of it.
  • Frankly, I'm surprised that things aren't ickier than they are at Las Vegas Sands (NYSE: LVS). The company shares its professional services with a company owned by the CEO, but the CEO's company pays Sands for the services it uses. Sands also pays companies owned by the CEO for use of specially outfitted jets. The company also paid $3.1 million for the coffee bar in the Venetian -- half of that went to a family trust of the CEO. The company has also employed the CEO's wife (director of community involvement), a stepdaughter (special assistant to the company's chairman and CEO), and son-in-law (vice president of corporate strategy).
  • Heading overseas, JA Solar (Nasdaq: JASO) spent roughly $250 million on silicon wafers from a company that's 33% owned by JA's executive chairman. The company also sold solar cells to, paid service fees to, and leased property from the same company. JA also acquired a company for $31 million that was controlled by the executive chairman.

Keep your eyes peeled
To be sure, some of these transactions may be perfectly fine and in the normal course of business. In other cases, it may simply be that I don't know what it's like to be rich, powerful, and in control of a huge company (insert eye-roll here).

The bottom line, though, is that investors need to be sure to read through the filings that their companies release. One, or even a few, suspect related-party transactions may not be enough to write a company off, but it all goes toward informing you -- an owner! -- how the CEO and other executives think about their position and what that entails. Executives who appear to take too much advantage of their position at the company may not be the kind of folks you want to trust as stewards of your investment dollars.

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The Fool owns shares of Bank of America and also holds a short position in the stock in a different portfolio. Motley Fool newsletter services have recommended Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.