CEOs would never bet against their own companies, would they?

CEOs get paid, after all, multiple millions to make sure their companies succeed. Why would they ever put their money on their own companies failing?

The quick answer: to make sure those millions keep coming, even if their companies take a nosedive.

Corporate boards of directors typically tie the rewards CEOs get to the corporate share price. If that share price rises, the CEO collects big-time.

This linkage gives CEOs, predictably enough, a powerful incentive to cut corners and do everything they possibly can to raise their corporate share price. So CEOs downsize and outsource. They cook the corporate books. They shortchange consumers.

To jack up share prices, CEOs even have their corporations spend billions to buy back shares of their own stock on the open market.

But sometimes all these maneuvers just can’t do the trick. In these cases, CEOs don’t fight failure. They bet on it.

Bloomberg Business reporter Jane Sassen did a powerful exposé on this betting early on in 2010. Executives, she detailed, were cutting deals with investment banks and other financial institutions to “hedge” their personal holdings of company shares. The execs were, in effect, wagering that their share price would sink.

Hedges let top executives, Sassen explained, “contain losses if a stock declines, while still keeping some upside potential if the price keeps rising.” In 2009, she added, regulators at the federal Securities and Exchange Commission recorded 107 instances of such hedging.

Sassen’s reporting helped raise eyebrows on Capitol Hill. Midway through 2010, lawmakers incorporated into the new Dodd-Frank Wall Street Reform and Consumer Protection Act a provision that requires corporations to disclose whether or not they let their execs hedge their bets.

But that provision has never gone into effect. On this reform, as with many other Dodd-Frank reform provisions, SEC regulators have been dragging their feet. In the face of heavy corporate lobbying pressure, regulators simply haven’t yet issued the regulations necessary to fully enforce Dodd-Frank.

Today, after over four-and-a-half years of delay on the anti-hedging front, we’ve finally scored a small victory: The SEC has just issued proposed regulations on executive hedging.

Let’s keep the emphasis on “small.” These proposed new regulations have to go through a public comment period. We still could be a couple years more from a final set of anti-hedging regs.

And the SEC’s new proposed regs, keep in mind, don’t prohibit execs from betting against their own companies. They just require companies to let us know if they let their execs do this betting.

Still, progress remains progress. We’ve come a step closer to discouraging an outrageous ongoing CEO scam — and that’s a good thing.

As SEC commissioner Luis Aguilar, an advocate for much more robust SEC action on enforcing Dodd-Frank, puts it: “By allowing corporate insiders to protect themselves from stock declines while retaining the opportunity to benefit from stock price appreciation, hedging transactions could permit individuals to receive incentive compensation, even where the company fails to perform and the stock value drops.”