At a time when workers compensation benefits have been reduced and worker benefit packages shrunk, you’d think that many companies would have “cooled it” on executive compensation.
Not so.
Today’s Wall Street Journal article by Ellen E. Schultz and Theo Francis
(see link at the close of my post) investigates the growing practice of funding executive pay packages out of pension funds. Companies doing this-which include the Bay Area’s Intel-can get tax breaks intended for pensions of regular workers and use them for executive pay.
This adds further risk to many of the pension plans, many of which are underfunded. In the case of Consolidated Freightways, this type of pension shift resulted in Consolidated having just 79% of the assets it needed for paying obligations. The Pension Benefit Guaranty Corp
(not the Rock of Gibraltar itself) had to step in.
The Wall Street Journal investigation found that in Intel’s case, a majority of the assets in the pension plan are dedicated not to the pension of rank and file workers but rather to the payout of executives who make up only 4% of Intel’s workforce.
This blog usually focuses on workers’ comp. But it’s important to step back sometimes to get the big picture. Workers-including injured workers-are sometimes suffering while the hogs feed at the trough.
Julius Young
http://www.boxerlaw.com/news.html
(you can subscribe to the blog by clicking on the RSS button on the lower right column under “Most Recent Entries”)
You can see the Wall Street Journal article here:
http://online.wsj.com/article/SB1217619 … s_page_one
Category: Political developments
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