Monday, June 26, 2006
CEO Pensions Grow As Your Pension Shrinks
Corporations complain about the fiscal pressure from pension costs. What they don't mention is that the real pressure is coming from executive pensions, not from yours. As corporations progressively shrink, freeze or terminate worker pensions, the pensions of top level executives continue to grow unchecked, on a parallel track with their yearly compensation while still employed. However, since corporations are not obligated to separate executive pension costs from worker pension costs in their financial reports, this disparity goes unnoticed. Executive pension liabilities have reached $3.5 billion at General Electric (Jack Welch's old employer), $1.8 billion at AT&T, $1.4 billion at GM, $1.3 billion at IBM and Exxon, and $1.1 billion at Pfizer and Bank of America. Occasionally, pension liability for a single executive may reach $100 million. Again, that's for a single person. Yet these bloated nest eggs are hidden among your pension costs, with the effect that your pension, not theirs, gets blamed for putting a permanent drag on corporate profits.
"As workers' pensions wither, those for executives grow" from the Pittsburgh Post-Gazette