Executives increasingly insist that pensions are a luxury corporations can no longer afford--except for themselves, that is. Many executives whose companies have reneged on pension promises to workers have been careful to ensure their own big monthly retirement checks. In 2002, United Airlines lured Glenn Tilton to be chief with a prepaid retirement benefit worth $4.5 million. United says that it simply matched what Tilton would have earned had he stayed at ChevronTexaco and that no other executives have guaranteed pensions. In December, Tilton succeeded in getting the Pension Benefit Guaranty Corp. to take over United's underfunded pilots' pension plan.
Golden. Stephen Wolf, the chairman who led US Airways into its first bankruptcy, cashed out a $15 million lump-sum pension and severance payment when he resigned in 2002, shortly before the bankruptcy court terminated the pilots' pension plan. The new CEO, Bruce Lakefield, draws only a salary of $425,000 a year and has refused a golden parachute. But he came out of retirement from Lehman Brothers, where he was well compensated. Early this month, a bankruptcy judge canceled the rest of US Airways' pensions.
Many steel executives protected themselves during their industry's pension collapse five years ago. Former Bethlehem Steel CEO Hank Barnette, who retired in 2000, a year before the steelmaker filed for bankruptcy, says he is "very appreciative" of his bankruptcy proof six-figure annual payout since he "suffered financially" by making it a point of honor never to sell a share of now worthless Bethlehem stock. A new federal law makes it harder for chief executives to take cash and run from troubled firms--for example, they must wait six months to collect lump sums. But compensation lawyers say executives can still negotiate company-paid and privately insured pensions or lump-sum parachutes. "Especially if they are in their late 40s to late 50s," says Joe Bachelder, a New York attorney who has negotiated employment contracts for many top CEO s, "they are very eager for a pension."
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