While Worker Pensions Fail, CEOs Get Rich
The traditional pension is quickly becoming an endangered species. But today, a government report found some executives have gotten huge retirement packages, even as their companies were dumping employee pension plans onto taxpayers as CBS News correspondent Sharyl Attkisson reports.
At the very same time pensions were drying up for 122,000 United Airlines workers, its top executives were cutting deals to make their own golden years comfortable and secure.
CEO Glenn Tilton, CFO Frederic Brace and COO Peter McDonald together got $7.6 million worth of retirement benefits in four years - from 2002 to 2006 - and earned a combined $55.5 million compensation, with perks like a car and driver and country club memberships.
That's one small sample of the outrage packed into a new Government Accountability Office report. It studied 10 of the largest companies to dump their underfunded pension plans into the laps of the federal Pension Benefit Guaranty Corporation, which is $22 million in the red.
Together, the 10 companies underfunded their pension plans by more than $11 billion affecting 200,000 workers. But their executives drew a total of $350 million in compensation.
The 10 companies are not named in the report, but CBS News has learned that they are: Polaroid, United, US Airways, Reliance Group, Republic Technologies, National Steel, LTV Steel Corp., Pillowtex Corporation, Westpoint Stevens, and Harvard Industries, Inc.
Reliance Group Insurance underfunded its plans by $121 million in the five years before it failed. But its top management brought home $70 million in salary, bonuses and benefits. Chief executives Robert Steinberg and George Baker used the corporate plane and helicopter for $200,000 worth of personal travel. That included family trips to China, Greece and Hawaii.
If the Pension Benefit Guaranty fund can't get out of the red, it's taxpayers who will have to pick up the slack. That's why some members of Congress think they should step in.
"I think we should say when a pension plan is in danger of being dumped on the U.S. taxpayers, the executives can't make big compensation until they fix the plan," said Rep. Rob Andrews, D-N.J.
A United spokesman says the millions in retirement benefits that that CEO Tilton has gotten replace what he lost when he left his previous company and have nothing to do with United's pension problems.
Meantime, many United retirees are having to live on less. Pensions that default to the guaranty fund are capped. One pilot, for example, saw his monthly payment shrink to one-third of what he'd been promised.