Executive pensions on the rise - whew, am I ever relieved
Just when you think you'll never hear anything jolly out of corporate America, today's Wall Stree Journal brings the heartening news that executive pensions rose last year by nearly 20%. And for the most highly skilled and valuable, pensions rose by a well-deserved 50%. (Access to the full article may require a subscription, or picking a paper subscription off the vestibule floor of your building, which is where the ones that get delivered to my building end up. I recycle them.)
Will I ever sleep better tonight, or what?
Because I want to share the wealth, or, rather information about the wealth, I'm lifting the WSJ's chart, so that you can see some of the details for yourself, and rejoice in your own modest way that the pension liability for the top 4-6 executives of GE is $140.7 billion. Yes, unless there's a typo, we're talking billions. I know, I known, there are more than 4-6 top executives - that's a rolling number. There may be 100 or so top 4-6 executives, all deserving post-executive suite compensation that reflects the fact that "share prices at the companies declined an average of 37% in 2008 and many firms froze employee pensions and suspended retirement-plan contributions."
(Question to self: can BILLIONS be right? Can I believe my own eyes and/or the typesetter at the WSJ?)
Anyway,I'm not working full-time any more, and I never worked at GE to begin with (as if), but I, for one, think it's alrighty that GE's top guns will get to share $140.7 large ones. And that the boys from BofA can belly up to the $63.2B bar.
Way to go!
Who's more deserving of comfort in their old age? Who better to have a decent place to lay their weary head after all those taxing - metaphorically speaking - years of being executives?
Hey, I was an executive in a 50 person company for a few years, and, brother, they were dog years. The three or four years I was on the management team were more like 21-28 years. Unfortunately, the dog-year-i-ness is not reflected in the pension that I'll be getting once I hit 67 from the company that finally acquired us and put us out of our misery. I managed to hang on a year or so under the new regime, so I'll be getting a cool $300/month (if I round the figure up).
I recognize that I'm no Jack Welch, and, commensurately speaking, I'm sure he's worth a billion times more than I am.
Pensions are, of course, tied to overall compensation - fair's fair, no?
Big bonuses, especially in the final years of executives' tenure, boosted some top executive pensions substantially, filings show. One of Exxon Mobil Corp.'s two supplemental pension plans for executives uses the three highest bonuses in the five years prior to retirement to calculate the executive's pension. Thanks to this, a $4 million bonus to CEO Rex Tillerson in 2008 helped push the total value of his pension to $31 million from $23 million.
An Exxon spokeswoman pointed out that the proxy states that "by limiting bonuses to those granted in the five years prior to retirement, there is a strong motivation for executives to continue to perform at a high level."
I get where Exxon's coming from. Wouldn't want those guys to slack off once they could see those retirement years on the horizon. Wouldn't want 'em sitting around, feet up on the desk, looking at property on golf courses in Naples, Florida, and calculating whether their Social Security check will cover greens fees.
Nope, the world - and capitalism - was much better served by their spending those sunset years figuring out what metrics to use this year to calculate their bonus (pi times the number of cars in the company parking lot on an average day, divided by 1/10 of the decimal portion of the stock price at its trough, as long as on that date, the decimal portion was also at its trough - unless it was zero). And back-scratching their board of directors into writing the check.
Reaching a milestone birthday also can enhance an executive's pension. Altria Group Inc. CEO Michael E. Szymanczyk's pension rose when he turned 60 last year, triggering a subsidy built into the pension formula, boosting its total value to $23.5 million.
Mr. Szymanczyk benefited from an early retirement subsidy, a feature widely used in employee pensions in the 1980s and 1990s. The subsidy, which typically kicks in when a worker reaches age 55 or 60, enables him to retire with the same pension benefit he would have received if he remained on the job until age 65. The subsidies were intended to encourage older workers to retire.
Well, I, too, am reaching a milestone birthday in just a few weeks. If there's anyone out there who would like to encourage this older worker to retire, I've got two words for you: subsidy welcome.