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Funnyman, Bob Newhart, used to do a comedy bit in which he portrayed a commanding officer addressing his troops on the eve of a big battle. The commander spoke bluntly about the bloody horror the troops would face and the certainty that many of them would not survive. The officer rallied them with appeals to courage and sacrifice, then concluded by saying, “My only regret is that I, personally, will not be able to go with you.”
That’s a perfect expression of today’s corporate ethic as practiced by chief executive officers. With bloody ruthlessness, CEOs constantly sacrifice workers in the name of global competitiveness, but the chiefs never seem to join in the sacrifice. We’ve recently been given another example of this disparity in a report on corporate pensions by the Government Accountability Office.
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The GAO found that four of the largest corporate bankruptcies of the last 10 years were disastrous for the employees’ pension funds. Prior to their bankruptcies, United Airlines, US Airways, Polaroid, and Reliance Insurance had underfunded their employees’ retirement plans by $11 billion – money essentially stolen from the workers. The corporations then abandoned any responsibility for the pensions, turning the obligation over to the federal government under a program that pays only a fraction of what is owed to the employees.
But guess which employees did not suffer any cut at all in their retirement money? Right – the four CEOs. Indeed, as they were underfunding and axing the workers’ pension plans, the four chieftains quietly pocketed a total of nearly $50 million in retirement pay for themselves.
Bob Newhart’s joke has become a nightmare for millions of workers. It’s time for congress to tie CEO pensions to the value of their employees’ retirement funds.
“As pensions dried up, four firms paid top execs $49.5M,” USA Today, November 19, 2009.