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Company Focus
CEOs cut pensions, pad their own
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Some executives who slash workers' pensions are keeping or even padding their own fat retirement packages. And some even reap bigger bonuses as pension cuts boost profits.
By Michael Brush
When International Business Machines froze its pension plan in early January, thousands of its employees suddenly felt a lot less certain about their retirement security.
Samuel Palmisano, IBM chief executive, has no such worries. Palmisano, according to IBM's (IBM, news, msgs) regulatory filings, will receive an annual pension of $4 million when he retires at age 65. That works out to $75,000 a week -- or more than $10,000 a day, including weekends.
It's becoming a familiar theme, as witnessed by this week's announcement by Alcoa (AA, news, msgs) that it will not offer pensions to new hires. And as traditional pension plans disappear and are replaced by less-generous 401(k) plans, the very executives who cut those pensions are keeping their guarantees of retirement luxury.
In IBM's case, executives will reap the rewards of fat pensions that remain fat even as the company changes its rules. In others, high-ranking managers are given extra pension credit for time served. Some CEOs at company's scaling back benefits are guaranteed multimillion-dollar payouts when they leave their companies, even if it's as a result of being laid off.
And there's another benefit to top executives: By cutting pensions, they make their companies more profitable, thus boosting their own bonuses. “It is unseemly for executives to reap higher bonuses on that basis,” says Eleanor Bloxham of the Value Alliance and Corporate Governance Alliance, a Westerville, Ohio-based outfit that advises boards and companies on corporate governance issues.
In other CEO news. Peter Lewis the Ceo of Progressive donated $100 million to Princeton U. and then added another 1 million to it to make sure it was the highest donated to Princeton at one shot. He wasn't happy when he found out he was tied with somebody else at $100 million. He has donated over $220 million to Princeton so far.
Company Focus
CEOs cut pensions, pad their own
advertisement
Some executives who slash workers' pensions are keeping or even padding their own fat retirement packages. And some even reap bigger bonuses as pension cuts boost profits.
By Michael Brush
When International Business Machines froze its pension plan in early January, thousands of its employees suddenly felt a lot less certain about their retirement security.
Samuel Palmisano, IBM chief executive, has no such worries. Palmisano, according to IBM's (IBM, news, msgs) regulatory filings, will receive an annual pension of $4 million when he retires at age 65. That works out to $75,000 a week -- or more than $10,000 a day, including weekends.
It's becoming a familiar theme, as witnessed by this week's announcement by Alcoa (AA, news, msgs) that it will not offer pensions to new hires. And as traditional pension plans disappear and are replaced by less-generous 401(k) plans, the very executives who cut those pensions are keeping their guarantees of retirement luxury.
In IBM's case, executives will reap the rewards of fat pensions that remain fat even as the company changes its rules. In others, high-ranking managers are given extra pension credit for time served. Some CEOs at company's scaling back benefits are guaranteed multimillion-dollar payouts when they leave their companies, even if it's as a result of being laid off.
And there's another benefit to top executives: By cutting pensions, they make their companies more profitable, thus boosting their own bonuses. “It is unseemly for executives to reap higher bonuses on that basis,” says Eleanor Bloxham of the Value Alliance and Corporate Governance Alliance, a Westerville, Ohio-based outfit that advises boards and companies on corporate governance issues.
In other CEO news. Peter Lewis the Ceo of Progressive donated $100 million to Princeton U. and then added another 1 million to it to make sure it was the highest donated to Princeton at one shot. He wasn't happy when he found out he was tied with somebody else at $100 million. He has donated over $220 million to Princeton so far.
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