Gavin in Va Beach Posted June 29, 2006 Share Posted June 29, 2006 Now many of you probably saw that headline and thought it was referring to general pension funds for the average worker. I did. Not so fast my friend... Companies Run Up Big IOUs,Mostly Obscured, to Grant Bosses a Lucrative Benefit The Billion-Dollar Liability By ELLEN E. SCHULTZ and THEO FRANCIS June 23, 2006; Page A1 To help explain its deep slump, General Motors Corp. often cites "legacy costs," including pensions for its giant U.S. work force. In its latest annual report, GM wrote: "Our extensive pension and [post-employment] obligations to retirees are a competitive disadvantage for us." Early this year, GM announced it was ending pensions for 42,000 workers. But there's a twist to the auto maker's pension situation: The pension plans for its rank-and-file U.S. workers are overstuffed with cash, containing about $9 billion more than is needed to meet their obligations for years to come. Another of GM's pension programs, however, saddles the company with a liability of $1.4 billion. These pensions are for its executives. 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. As Workers' Pensions Wither, Those for Executives Flourish Link to comment Share on other sites More sharing options...
Alaska Darin Posted June 30, 2006 Share Posted June 30, 2006 It's a good thing Democrats and Republicans care so much about the average American. Link to comment Share on other sites More sharing options...
erynthered Posted June 30, 2006 Share Posted June 30, 2006 It's a good thing Democrats and Republicans care so much about the average American. 716536[/snapback] I think I've seen this post before. Don't you hate it when you have to repeat yourself, over and over and over and over....? Link to comment Share on other sites More sharing options...
TPS Posted June 30, 2006 Share Posted June 30, 2006 It's a good thing Democrats and Republicans care so much about the average American. 716536[/snapback] Isn't Halliburton good though? Why would a corporation ever screw workers or the middle class? I thought they always did things for the public good? Link to comment Share on other sites More sharing options...
GG Posted June 30, 2006 Share Posted June 30, 2006 It's a good thing Democrats and Republicans care so much about the average American. 716536[/snapback] While there's very little to disagree with in the article, the best solution should be more disclosure of the benefits paid to all employees. When employees learn the disparity of the payments, it's up to them & the shareholders to take a stand, not the grandstanders pandering for votes. ps, note that it's The Wall Street Journal that's running the story. So here's a lesson to the kiddies wanting to get into the field of high finance - read WSJ & The Economist, religiously, cover to cover. Link to comment Share on other sites More sharing options...
Alaska Darin Posted June 30, 2006 Share Posted June 30, 2006 While there's very little to disagree with in the article, the best solution should be more disclosure of the benefits paid to all employees. When employees learn the disparity of the payments, it's up to them & the shareholders to take a stand, not the grandstanders pandering for votes. Ideological bull sh-- and you know it. Employees taking a stand will lead to them being fired by those getting the cash and replaced by someone who is willing to work. There are times the government should be involved in protecting both employees and shareholders from the greed of the "noblemen" and this is one of them - if for no other reason than the inevitable taxpayer bailout that's Wall Street has been warning us about for a decade. Shareholders only care when the company isn't making the number and you know as well as I do that it's virtually impossible for the little guys in the equation to get together enough shares to have any kind of voice. Until recently GE was one of the best companies in the world to invest in. There's no way you'd get enough dissatisfaction to stop paying Jack's really nice pension. ps, note that it's The Wall Street Journal that's running the story. So here's a lesson to the kiddies wanting to get into the field of high finance - read WSJ & The Economist, religiously, cover to cover. 716557[/snapback] I don't disagree with that. Link to comment Share on other sites More sharing options...
Bill from NYC Posted June 30, 2006 Share Posted June 30, 2006 Ideological bull sh-- and you know it. Employees taking a stand will lead to them being fired by those getting the cash and replaced by someone who is willing to work. There are times the government should be involved in protecting both employees and shareholders from the greed of the "noblemen" and this is one of them - if for no other reason than the inevitable taxpayer bailout that's Wall Street has been warning us about for a decade. Shareholders only care when the company isn't making the number and you know as well as I do that it's virtually impossible for the little guys in the equation to get together enough shares to have any kind of voice. 716596[/snapback] Spoken like a true trade unionist! Seriously, thanks for being able to take a clear look at both sides of an issue. I never expected a post such as this from you. (This might sound effed up, but I am hoping that you can decipher the compliment intended). Good work Brother. Link to comment Share on other sites More sharing options...
Pine Barrens Mafia Posted June 30, 2006 Share Posted June 30, 2006 Ideological bull sh-- and you know it. Employees taking a stand will lead to them being fired by those getting the cash and replaced by someone who is willing to work. There are times the government should be involved in protecting both employees and shareholders from the greed of the "noblemen" and this is one of them - if for no other reason than the inevitable taxpayer bailout that's Wall Street has been warning us about for a decade.716596[/snapback] Wow, what happened? Did you take your socialist pills this morning? Work is not a right. Work is a privilege. You work hard, you'll come out ahead. ANYONE who's relying on a pension for future retirement (other than civil servants or military people, perhaps) is nuts. And don't tell me the average person can't make a good go at saving for retirement in the markets. Hell, I'm only 33 and I'm in really good shape for someone my age with regard to that. Link to comment Share on other sites More sharing options...
Bill from NYC Posted June 30, 2006 Share Posted June 30, 2006 You work hard, you'll come out ahead. 716609[/snapback] More ideological bullsh--. Don't you know anybody who lost their job to someone in Calcutta? Some degree of luck also enters into the equation. It is a great thought and a great work ethic to hold, but to present the above as a stone cold fact is imo starry eyed. It amazes me how you and so many others offer their love and trust to corporations. Do you truly think that your undying devotion is returned in most cases? I think that your company would dump you personally tomorrow if they could find the right setup in Bombay. Forgive me, I guess I am not so starry eyed. Link to comment Share on other sites More sharing options...
Pine Barrens Mafia Posted June 30, 2006 Share Posted June 30, 2006 More ideological bullsh--. Don't you know anybody who lost their job to someone in Calcutta? Some degree of luck also enters into the equation. It is a great thought and a great work ethic to hold, but to present the above as a stone cold fact is imo starry eyed. It amazes me how you and so many others offer their love and trust to corporations. Do you truly think that your undying devotion is returned in most cases? I think that your company would dump you personally tomorrow if they could find the right setup in Bombay. Forgive me, I guess I am not so starry eyed. 716611[/snapback] Hell no. I know I can be sent packing any day. But I'm not so weak-kneed and limp-wristed to be paralyzed over it. I continue to do my best, and that's all I can do. Then again, it helps that I don't work in textiles or automobiles or any other manufacturing job. Also, if I wanted, I could go to work for myself and probably double my income. It's just that this company gives AWESOME benefits. Forgive me for mocking your chicken little attitude about this, but it's simply not worth it to worry about what your employer's gonna do. Keep a good amount of savings for a rainy day, and you'll weather any layoff. And another thing, if I was a top-level exec, I'd be doing everything I could to get my piece of the pie as well. And so would you. If you say you wouldn't, you'd be a hypocrite. So how can you hold it against 'em? Sounds like jealousy to me. Link to comment Share on other sites More sharing options...
RuntheDamnBall Posted June 30, 2006 Share Posted June 30, 2006 And another thing, if I was a top-level exec, I'd be doing everything I could to get my piece of the pie as well. And so would you. If you say you wouldn't, you'd be a hypocrite. So how can you hold it against 'em? Sounds like jealousy to me. 716615[/snapback] I don't know. If I was a top-level exec -- and for sure, there are reasons I'm not -- I'd like to think my employees would respect me more if my ethics trumped my greed. There's a difference between taking a piece of the pie, even a generous one, and leaving everyone else hungry. Link to comment Share on other sites More sharing options...
GG Posted June 30, 2006 Share Posted June 30, 2006 Ideological bull sh-- and you know it. Employees taking a stand will lead to them being fired by those getting the cash and replaced by someone who is willing to work. There are times the government should be involved in protecting both employees and shareholders from the greed of the "noblemen" and this is one of them - if for no other reason than the inevitable taxpayer bailout that's Wall Street has been warning us about for a decade. Shareholders only care when the company isn't making the number and you know as well as I do that it's virtually impossible for the little guys in the equation to get together enough shares to have any kind of voice. Until recently GE was one of the best companies in the world to invest in. There's no way you'd get enough dissatisfaction to stop paying Jack's really nice pension. I don't disagree with that. 716596[/snapback] Sorry, that dog won't bite. Talk about ideological bull in having legislation dictating pensions & salaries? How exactly would you accomplish that? There's no way no how regulation should, or is going to fix this, because the devil is always in the details. This news is the product of the good part of the Sarbanes Oxley legislation (which very few people oppose) - that being much more disclosure of financial items. The more disclosure the better. How can employees take a stand? By exercising good judgement and doing research on the companies they join. Ideological bull or not, this is not the economy of 100 years ago when you sold your soul to the company. BTW, back in those days, management got away with a lot more. This is also one of the last remaining areas where worker collectivism can help them out. There's absolutely nothing wrong with workers banding together and fighting for better wages & benefits. Look what happened when Delta Air management tried to pull a fast one in Ch. 11. On the investor front, you can exercise judgement by dumping stock of companies with excessive comp to senior management. If enough investors do that, management will get the hint. The question, as always, do you want to fix things, which will take time, or do you want to take rash punishing measures that won't fix anything? Link to comment Share on other sites More sharing options...
Pine Barrens Mafia Posted June 30, 2006 Share Posted June 30, 2006 I don't know. If I was a top-level exec -- and for sure, there are reasons I'm not -- I'd like to think my employees would respect me more if my ethics trumped my greed. There's a difference between taking a piece of the pie, even a generous one, and leaving everyone else hungry. 716653[/snapback] LOL, I'm sorry, but I don't buy that for a minute. Even the venerable Jack Welch took a huge chunk of cashish with him when he left. You would too. ANYONE would. You'd be nuts not to. Link to comment Share on other sites More sharing options...
cromagnum Posted June 30, 2006 Share Posted June 30, 2006 My father work's for the railroad and is a union worker ... In the 80's, union busting was popular in order to buy and sell the company at a huge winfall for the investors and the originators of the takeover. My father's company was owned by the mellon family and was at that time taken over by mister mellons daughter. She was in the process of selling the newer engine locomotives and replacing them with used. And reducing the workforce, by cutting brakemen jobs among others, basically cutting the working crew in half. Then she changed the payscales with various elimanations of preexisting job duties. Then when there wer several train accident patly due to shortened crew and inferior equipment which resulted in death and injuries. The union went on strike. Instantly the union workers were replaced with off the street replacements and non strikers which led to more accidents resulting injuries and deaths. The strike was long, I was a 11 years old delivering papers, yardwork,collecting aluminum for cash to help my family through this strike. Finally after a year? the owner reached a deal with the union, my fathers job and pension were saved and will have a verygood retirement, fingers crossed Link to comment Share on other sites More sharing options...
Pine Barrens Mafia Posted June 30, 2006 Share Posted June 30, 2006 pension were saved and will have a verygood retirement, fingers crossed 716775[/snapback] Note this finale. Who's fault is it if this doesn't happen? I daresay it's your father's for not diversifying for his future rather than the railroad's. Link to comment Share on other sites More sharing options...
cromagnum Posted June 30, 2006 Share Posted June 30, 2006 Note this finale. Who's fault is it if this doesn't happen? I daresay it's your father's for not diversifying for his future rather than the railroad's. 716837[/snapback] He enlisted in the military in 67 came back home in 71 and started working for the railroad and and has accumalated a nice pension for his hardwork.. In the 90's he started a mutual fund to offset any reneging of his pension by the company he work's for. Link to comment Share on other sites More sharing options...
RuntheDamnBall Posted June 30, 2006 Share Posted June 30, 2006 LOL, I'm sorry, but I don't buy that for a minute. Even the venerable Jack Welch took a huge chunk of cashish with him when he left. You would too. ANYONE would. You'd be nuts not to. 716714[/snapback] Consider me nuts. Link to comment Share on other sites More sharing options...
Alaska Darin Posted June 30, 2006 Share Posted June 30, 2006 Sorry, that dog won't bite. Talk about ideological bull in having legislation dictating pensions & salaries? How exactly would you accomplish that? There's no way no how regulation should, or is going to fix this, because the devil is always in the details. Bull. Your basic suggestion was that everyone should unionize (I'm sure that's not what you intended). Companies are the ones who sign employees into their pension systems - not the other way around. If you can't make it work then there's no way in hell the CEO and other "noblemen" deserve seven-to-10 figure payouts. As I have stated before, the government should expand the IRA systems in this country so people can put more than the piddling amount away allowed now - AND it shouldn't be taxable either on investment or withdrawl. On the company side, no one is going to convince me that it's acceptable to pay ONE person billions of dollars in cash and perks when the same company is saying that down the road they are going to be bankrupt because of pension obligations. Ultimate smoke and mirrors garbage there. This news is the product of the good part of the Sarbanes Oxley legislation (which very few people oppose) - that being much more disclosure of financial items. The more disclosure the better. I don't disagree with that. How can employees take a stand? By exercising good judgement and doing research on the companies they join. Ideological bull or not, this is not the economy of 100 years ago when you sold your soul to the company. BTW, back in those days, management got away with a lot more. That's a copout. The biggest problem with government today is they provide virtually no oversight on those willing to line their pockets the deepest. Pretending the individual should be responsible for "due diligence" on the secret inner workings of multi-national companies is ludicrous. If the damn government took on this simple task we wouldn't need things like Social Security to bankrupt society. This is also one of the last remaining areas where worker collectivism can help them out. There's absolutely nothing wrong with workers banding together and fighting for better wages & benefits. Look what happened when Delta Air management tried to pull a fast one in Ch. 11. Nothing like citing the extreme to prove a point. Unionize to guarantee losing your job! On the investor front, you can exercise judgement by dumping stock of companies with excessive comp to senior management. If enough investors do that, management will get the hint. Doubtful, but it's a nice thought. The question, as always, do you want to fix things, which will take time, or do you want to take rash punishing measures that won't fix anything? 716666[/snapback] Your solution will never happen. Nor, likely, will mine. Link to comment Share on other sites More sharing options...
Pine Barrens Mafia Posted June 30, 2006 Share Posted June 30, 2006 Consider me nuts. 716866[/snapback] I'm still calling bull sh--. NO ONE would turn down millions given to them. No one. Link to comment Share on other sites More sharing options...
Alaska Darin Posted June 30, 2006 Share Posted June 30, 2006 I'm still calling bull sh--. NO ONE would turn down millions given to them. No one. 716941[/snapback] I would. The guy was ridiculously rich already. There's no way I could live with myself. Link to comment Share on other sites More sharing options...
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