While Worker Pensions Fail, CEOs Get Rich

(CBS)  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.

Read the full GAO report

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.

[chaoliste]

I am retired from UAL. My pension was reduced by 400 a month when it was dumped into the PBGC. Of course I'm very angry about this.
However I wish that CBS would not say that this falls on the taxpayers.
The PBGC is paid for by premiums from our pensions as in other insurance companies. I don"t want the taxpayers paying for my pension. If the PBGC gets into trouble, I want UAL or Goldman Sachs to be held responsible

[Ceres6]

The CEOs and business executives want the American people to get the idea that because of their incredible skills, they deserve to earn millions of dollars in bonuses, on top of their salaries. The truth is that there are thousands of qualified individuals that will do better jobs than those executives, for salaries that are much lower than half a million dollars per year.

One small example of many is the one of Chesapeake Energy, in which its CEO, Mr. Aubrey McClendon, got paid $112.5 million in the year 2008. Here we have a guy making more than $2 millions every week, but on the other side of the coin, there are countless thousands of consumers cutting desperately in food and energy usage, so that people like Mr. McClendon can have a super fat check. I will not be surprised if Mr. McClendon firmly believes that the American people should be grateful to have him, and that he deserves to be paid much more.

One of the main reasons why the quality of life of most American people is going down the drain is because of the despicable greed and under the table maneuvers of those business executives. They have become the new organized crime figures, who found a loophole in the flawed American system. Without a doubt, many CEOs and business executives are a lot more dangerous than Charles Manson, Ted Bundy, and Jeffrey Dahmer. While each of these criminals inflicted a terrible suffering to a small number of people, the damage caused by the greedy CEOs and executives bring misery to millions of Americans.

[willihandjiv]

As a conservative who is naturally against government meddling in free enterprise, I admit that in the are of CEO compensation, new, smart regulations are critically necessary. Absolute power corrupts absolutely. There has to be a system of checks and balances for the leaders of industry that still allows sufficient wiggle room for pay incentives.

[willihandjiv]

As a conservative who is naturally against government meddling in free enterprise, I admit that in the are of CEO compensation, new, smart regulations are critically necessary. Absolute power corrupts absolutely. There has to be a system of checks and balances for the leaders of industry that still allows sufficient wiggle room for pay incentives.

[sjc_1]

Corporate governance was and is a major problem, billions of shares out in the market and even fund managers holding millions of shares can do nothing about compensation excess. There are lots of MBAs that would do a better job for less money, but they will not get the chance. Once those people are in there, they do everything to stay in there. Obtain power and maintain power, that is the motto.

[robinspp]

The CEO?s ultimately take the people?s money through stock market.

[gosstom]

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.

Give me that United spolesman for 10 minutes and I guarantee I would put my foot so far up his rectum that he would defecate out his ears for a month.

[cjs_cnet]

There is little difference in Madoff taking investor money and keeping it than these CEOs that underfunded pensions and kept the money on the way out the door. Rather than seeking new legislation to make this against the law, how about recognizing such deception and deceit under existing law. We can say that they embezzled the pension fund or we can say that they defrauded the workers. Telling the taxpayer that he has to eat the losses because no law applies is just double-speak for these crooks have already paid off the politicians to escape with money that didn't belong to them in the first place.

[donkeylips]

This greed thing has gotten out of hand. The constant lower taxes theme is a huge detriment to the country. A scant few decades ago if you were able to succeed in business in this country, make a comfortable living, and save to attain wealth, you might feel grateful to have that chance. Taxes were more than double the current rates. One income families could own a home and live well. People were grateful for the opportunity living in the U.S.A. provided. Today people think nothing of screwing thousands out of their pensions and paying themselves millions of dollars. Sending work overseas to be done at 1/10th the cost, hiding money in offshore accounts, or moving their "headquarters" to some tax haven island. The philosophy seems to be Screw you, I got mine. This greed will be the downfall of our once great country.

[unshrub]

Here's to all of the republicans who are against more regulations. I hope you are happy. This is what happens when we let public held corporations run amuck.

[midlclass]

what are you going to do to stop this untillaws are past and loopholes closed this is going to go on and on. labor laws and the middle class worker have been raped and corperat boards are just looking out for each other and not the companies. companies that have pensions and benefits should be forced to have them fully funded and no one should get anything better than the rest. here again unregulated and it's out of hand. then when the hammer comes down it's whine like a mule because we got out of hand. funny how these CEO's continually think they are worth all that and a bag of chips. yet you and i don't warrent a 50 cent an hour pay raise or benefit's.