For Immediate Release
Contact: Mark MacKenzie President, NH AFL-CIO
July 6, 2006 – While pension benefits for the nation’s top corporate executives continue to rise at an unprecedented rate, rank and file workers now find their pension plans burdened by excessive CEO salary and bonus programs.
And, according to a “Wall Street Journal” investigative report, “Analysis of corporate filings reveals that executive benefits are playing a large and hidden role in the declining health of America’s pensions.”
Case in point: General Motors Corp. recently attributed its decision to end its pensions for 42,000 workers to the notion that, “Our extensive pension and [post-employment] obligations to retirees are a competitive disadvantage to us.”
But the pension plan for GM’s U.S. workers contains $9 billion more than is needed to meet their obligations for years to come, the “Journal” expose reveals. And GM’s separate, unfunded, pension plan for executives “saddles the company with a liability of $1.4 billion.”
New Hampshire AFL-CIO President Mark MacKenzie rebuked all corporations that engage in such behavior.
“With the average CEO salary, according to the Economic Policy Institute, to be 262 times that of the average worker and 821 times that of a minimum wage worker,” President MacKenzie said, “we are seeing unfunded pension obligations rise to new record highs.
“All of this is at the expense of the working men and women who are paying the price of this greedy strategy.
“In an attempt to hide the real truth corporations are singing the pension blues calling for workers’ pension cutbacks while corporate executives enjoy the lazy, hazy days of summer secure in their multi-million-dollar pensions,” President MacKenzie said.
“It is too high a price to pay, and corporate America needs to stop trying to target rank and file workers to pay for the excesses of the CEOs,” President MacKenzie said.
According to the national AFL-CIO, the largest annual pensions earned by major corporate CEO’s are: Exxon Mobil Corporation’s Lee R. Raymond: $8.1 million; Pfizer Inc.’s Henry A. McKinnell: $6.5 million; AT&T’s Edward E. Whitacre Jr.: $5.4 million; and UnitedHealth Group Inc.’s William W. McGuire: $5.01 million.
Referring to GM’s $1.4 billion liability for executive pensions, the “Journal” said: “This is the pension squeeze companies aren’t talking about.
“Even as many reduce, freeze or eliminiate pensions for workers,” the “Journal” said, “complaining of the costs, their executives are building up ever-bigger pensions, causing the companies’ financial obligations for them to balloon.”
Executive pensions, even when they won’t be paid until years from now, drag down earnings today, the article said. And they do so in a way that is disproportionate to their size, because they aren’t funded with dedicated assets.