After you've gone

You remember the words of the old song:

After you've gone, and left me cryin'
After you've gone, there's no denyin'
You'll feel blue
You'll feel sad
You'll miss the dearest pal that you've ever had.

Well, I don't think the words will describe many ex-CEOs of public companies. They won't feel blue. They won't feel sad. They won't miss the dearest pal they've ever had. That's because of their outsize pensions. At a time when the pensions of the average Joe are being cut, the pensions of CEOs are going through the roof along with the outrageous annual compensation paid to these people. For example, at BellSouth, employee pension contributions are down 3% since 2000; executive pension contributions are up 89% in the same period.

Consider that at the average public company 8% of the pension fund is reserved for the executives. At AFLAC 58% of the pension fund is reserved for the top dogs. Do you think that 58% of AFLAC's labor force are executives? Most executives get a pension of anywhere from 60% to 100% of their annual compensation; the average Joe is lucky if he gets 25%, that is if he gets any pension at all.

Not only are these executives being given an enormous pension, the stockholders are bearing the brunt of the cost because these pensions are unfunded; whereas, the pensions of the workers are funded and, as a result, are earning money for the company. At AT&T the pension plan for 1,000 or so executives generated almost half of the company's pension expense resulting in a charge of over $100,000,000 against 2005 profits. The other half of the pension plan, which is funded, covers 189,000 regular employees.

When are compensation committees going to work for the stockholders?