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As Workers' Pensions Wither, Those for Executives Flourish
Wall Street Journal ^ | June 23, 2006 | Ellen E. Schultz and Theo Francis

Posted on 06/24/2006 10:28:20 AM PDT by Tolerance Sucks Rocks

This is the pension squeeze companies aren't talking about: Even as many reduce, freeze or eliminate pensions for workers -- complaining of the costs -- their executives are building up ever-bigger pensions, causing the companies' financial obligations for them to balloon.

Companies disclose little about any of this. But a Wall Street Journal analysis of corporate filings reveals that executive benefits are playing a large and hidden role in the declining health of America's pensions. Among the findings:

• Boosted by surging pay and rich formulas, executive pension obligations exceed $1 billion at some companies. Besides GM, they include General Electric Co. (a $3.5 billion liability); AT&T Inc. ($1.8 billion); Exxon Mobil Corp. and International Business Machines Corp. (about $1.3 billion each); and Bank of America Corp. and Pfizer Inc. (about $1.1 billion apiece).

• Benefits for executives now account for a significant share of pension obligations in the U.S., an average of 8% at the companies above. Sometimes a company's obligation for a single executive's pension approaches $100 million.

• These liabilities are largely hidden, because corporations don't distinguish them from overall pension obligations in their federal financial filings.

• As a result, the savings that companies make by curtailing pensions for regular retirees -- which have totaled billions of dollars in recent years -- can mask a rising cost of benefits for executives.

• Executive pensions, even when they won't be paid till years from now, drag down earnings today. And they do so in a way that's disproportionate to their size, because they aren't funded with dedicated assets.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: assets; bottomline; earnings; economicbetrayal; executives; expenses; jobs; liabilities; obligations; parasites; pensions; rankandfile; richgetricher
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To: caryatid

Boards tend to control significant portions if not the majority of shares. The average shareholder doesn't have a real vote even if he bothers with a proxy vote.


41 posted on 06/24/2006 11:48:04 AM PDT by YCTHouston
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To: Gondring

The masses MIGHT do it, if they cared. But they've been carefully conditioned to think that the GOVERNMENT will fix their problem.

And those of us that DO own stock, many of us own it via our 401Ks, IRAs, or Mutual Funds, where we don't VOTE the shares held. . .


42 posted on 06/24/2006 11:48:18 AM PDT by Salgak (Acme Lasers presents: The Energizer Border: I dare you to try and cross it. . .)
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To: ccmay
Pointing out that these greedy executives are stealing companies from their owners is not Marxist.

You'd think that would be self-evident, but not in these knee-jerk times.

43 posted on 06/24/2006 11:50:05 AM PDT by Wolfie
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To: Tolerance Sucks Rocks

capitalism isn't well served by little napoleons with an entitlement complex forming a cabal and taking hundreds of millions out of their companies by gifting one another on the corporate treasury.


44 posted on 06/24/2006 11:53:31 AM PDT by Energy Alley ("War on Christians" = just another professional victim group.)
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To: Energy Alley
capitalism isn't well served by little napoleons with an entitlement complex forming a cabal and taking hundreds of millions out of their companies by gifting one another on the corporate treasury.

OK, you're right. Capitalism isn't perfect but it's better than the alternative - Socialism. (I'm always amused that the Left enjoys using the term "cabal" all the time.)

45 posted on 06/24/2006 11:59:19 AM PDT by CAWats (And I will make no distinction between terrorists and the democrats.)
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To: BlueDragon
You are a poster boy, of why many folks hate the right wing...

Thanks for buying into that perception. I don't give a damn what liberals think of me.

Of all the negative attributes that one may fairly attribute to the worst of them, you have much of them, in spades.

Hey, thanks for the compliment!

I bet your momma, is so proud....

She is. My first post ever on FR is on her refrigerator.

46 posted on 06/24/2006 12:00:39 PM PDT by Extremely Extreme Extremist (Undocumented FReeper)
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To: CAWats

theft isn't capitalism!


47 posted on 06/24/2006 12:02:38 PM PDT by Energy Alley ("War on Christians" = just another professional victim group.)
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To: Extremely Extreme Extremist
If workers want to earn fat pensions then they should become more motivated instead of producing widgets for 30 years.

In this statement lies the problem...if all us un-motivated workers didn't produce the widgets, there would be no bloated pensions. You think that because some moron has an MBA from Harvard (and I know two individuals who fit this bill!), he/she deserves a 100 million kiss when they leave a company? Please...

48 posted on 06/24/2006 12:04:09 PM PDT by Fedupwithit (I, a stranger and afraid....in a world I never made)
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To: Extremely Extreme Extremist

You object to the truth when it discloses the looting of corpoations on a high level? Who is a Maxist? You sound like a corporate communist stealing from the citizens under a different banner than the Reds.


49 posted on 06/24/2006 12:22:51 PM PDT by em2vn
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To: CAWats

So you agree that there are modifications that can be made to the system without being "socialist"...right?


50 posted on 06/24/2006 12:30:37 PM PDT by Gondring (If "Conservatives" now want to "conserve" our Constitution away, then I must be a Preservative!)
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To: Extremely Extreme Extremist
It's not what "liberals" think of you that is the biggest problem...

Read the other replys to you on this thread ---how many stand in agreement with you, think that's it's ok for CEO's to rip off the companies they manage, just because they can get away with it (most of the time).

Not many.

Ever heard the word "ethics"? Did your daddy teach you anything concerning them? Apparently not!

You really don't get it. I doubt you ever will.

You are a shame to FreeRepublic. One of the worst of them all.

Why don't you take a hike, like permanently, you're making the rest of look bad.

51 posted on 06/24/2006 12:33:05 PM PDT by BlueDragon
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To: Tolerance Sucks Rocks
I'm all for for capitalism but I'm against corporate greed and arrogance, if its stiffing working stiffs to fatten CEO's pensions. A company has the right to decide it can't afford pension costs. But it doesn't have the right to transfer pension money from those who most count on it to those who don't need it. Its an issue of simple justice, not to mention human decency.

(Denny Crane: "Every one should carry a gun strapped to their waist. We need more - not less guns.")

52 posted on 06/24/2006 12:34:48 PM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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To: Extremely Extreme Extremist
WSJ is better than this, promoting Marxist gobbledygook.

In the end, excessive executive compensation is one of the things that killed Marxism; the party elite rewarded themselves with dachas, cars, wealth and privilege. It made the ordinary soviet citizen even more of a cynic about the system he lived under.

Who knows? Maybe America's executives can do the same for capitalism.

53 posted on 06/24/2006 12:49:01 PM PDT by Grut
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To: em2vn
... a corporate communist stealing from the citizens under a different banner than the Reds.

Aha! I see that you understand where all the Amerikan Communists have gone ... to business school to learn how to raid American corporations ... and to the boards of all the once great Foundations ... where they have perverted the intent of those generous Americans who set up the foundations ... in order to further their [the American Communists]'s own goals.

54 posted on 06/24/2006 1:11:50 PM PDT by caryatid (Jolie Blonde, 'gardez donc, quoi t'as fait ...)
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To: Grut; Extremely Extreme Extremist
In the end, excessive executive compensation is one of the things that killed Marxism; the party elite rewarded themselves with dachas, cars, wealth and privilege. It made the ordinary soviet citizen even more of a cynic about the system he lived under.

Well said. These guys are going to kill the goose that lays their golden eggs.

The average American is a believer in the free market. He's fine with corporate executives making more money than the guy on the shop floor, even a lot more, especially if the organization is doing well financially due to skillful management.

Executives nowadays make far more money, in proportion to what their workers earn, than they did at any time in the past. And by and large, the workers have gone along with this, because they have mostly been doing better over the years also. Criticism of the amounts the fat cats earn has mostly been confined to the hard Left.

However, Joe Six-pack is not going to stand by while his pension is turned to ashes by incompetent bungling executives, who reward themselves with massive salaries, benefits, pensions, buyouts, and golden parachutes, while the company falls to pieces around them. There has to be accountability and if there is not, the cure will be worse than the disease.

High ranking executives had better get their s**t together now, because they stand to lose far more if disgruntled share holders ally with disgruntled workers to impose reform by legislation.

-ccm

55 posted on 06/24/2006 2:50:00 PM PDT by ccmay (Too much Law; not enough Order)
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To: CAWats
capitalism isn't well served by little napoleons with an entitlement complex forming a cabal and taking hundreds of millions out of their companies by gifting one another on the corporate treasury.

OK, you're right. Capitalism isn't perfect but it's better than the alternative - Socialism. (I'm always amused that the Left enjoys using the term "cabal" all the time.)

There is a vast difference between capitalism and corporatism. God you're annoying.

56 posted on 06/24/2006 2:52:23 PM PDT by olde north church (The Libs are always calling for a change in direction but why is there direction always retreat?)
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To: CAWats
"Why aren't the workers the CEO's? Are they 1. Not smart enough? 2. Not ambitious enough? What is it?"
Not good enough at office politics - to be a really large turd is not given to that many people.
"Up the tree! Towards the bananas and success!
And prestige, too! One more jump!
Hundreds of baboons are climbing up,
And the sight of their naked derrieres is terrifying."
You will have to take me at my word that this work of Igor Guberman was a verse quatrain before I translated it.
57 posted on 06/24/2006 3:17:03 PM PDT by GSlob
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To: Grut
Excellently put. I was born and grew up in the thucking USSR, and I would be hard pressed to put it better.
58 posted on 06/24/2006 3:21:58 PM PDT by GSlob
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To: Tolerance Sucks Rocks

Class warfare from the Wall Street Journal?


59 posted on 06/24/2006 3:23:23 PM PDT by balch3
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To: Tolerance Sucks Rocks

Them that have, get.
Or – as said on a comic strip way back when, “He who has the gold makes the rules”.


60 posted on 06/24/2006 3:24:44 PM PDT by R. Scott (Humanity i love you because when you're hard up you pawn your Intelligence to buy a drink)
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