As I talk to workers throughout the country, whether they are in unions or not, I'm struck how much the greed of CEOs has penetrated the public consciousness. But, CEO pay is really only the tip of the financial riches that CEOs are hauling away--it is their pensions and deferred compensation that are truly staggering. And in the coming weeks, we are about to get a torrent of new information, never easily available before, to show the obscene looting of corporate treasuries.

The Securities and Exchange Commission is now requiring companies, for the first time, to report in more detailed fashion the current value of tops executives' pensions and deferred compensation. It is often true that the real riches showered on CEOs by compliant boards (often stacked with the CEOs corporate buddies) are not in the annual paycheck but in pensions and deferred compensation--amounts that have been hard to uncover because corporate boards have done such a good job at hiding the figures. As companies file their proxy statement to report their 2006 financial results, we are going to learn a lot more about those pensions and deferred compensation. Hold on to your seats, folks, because this stuff is mind-boggling.

In the current issue of Pensions & Investments (which is the leading newspaper for money management), Barry B. Burr has a story entitled Pension goldmine awaits AT&T, Occidental CEOs. Burr's post child is AT&T CEO Edward E. Whitacre who will take home--drumroll, please--$158.4 million as a pension package when he retires as chairman and CEO of the company.

Using data compiled by The Corporate Library, Burr also reports on some other "parting gifts" awaiting others CEOs:

The Corporate Library. a research firm focusing on corporate governance and executive and director compensation, ranked the 10 CEOs with the largest combined pension and deferred compensation deals: In addition to Messrs. Whitacre and Irani, they are: •Kenneth D. Lewis, Bank of America Corp., who is also chairman and president, $83 million; •H. Edward Hanway, Cigna Corp., also chairman, $73.2 million; •William C. Weldon, Johnson & Johnson, also chairman, $64.2 million; •Alexander M. Cutler, Eaton Corp., also chairman and president, $54.6 million; •Samuel J. Palmi¬sano, International Business Machines Corp., also chairman and president, $53.8 million; •Harold M. Messmer Jr., Robert Half International Inc., also chairman, $53.1 million; •Nolan D. Archibald, Black & Decker Corp., also chairman and president, $52 million; and •Daniel P. Amos, Aflac Inc., also chairman, $50.1 million.



Just to reassure you that greed does not run rampant in the corporate suite, we learn from this article that the top pension packages are 8 to 25 times greater than the median CEO pension package, which is "only" $6.4 million. And you have to pause for a moment and really reflect: how do those poor folks get by in retirement on a measly $6.4 million? I mean, $6.4 mil just isn't what it used to be.

So, here are some broad thoughts to consider about the ripping off of such huge sums of money by such a tiny number of people.

The first real challenge for the rest of us regular people--and bloggers everywhere--is to combat the rhetoric that we get from the corporate spin machine about these obscene amounts of money. To wit, here's what AT&T had to say about Whitacre:

Responding to the size of the retirement package, Butler McCall, AT&T spokeswoman, said, "Ed Whitacre is one of the longest-serving CEOs in U.S. industry. He started with Southwestern Bell in 1963 and became CEO in 1990. During this time, Mr. Whitacre has transformed both AT&T, which is now one of the largest companies in the United States, and the telecommunications industry. As CEO, Mr. Whitacre has also delivered stockholder returns above those of our closest peers, including a 53% total return last year alone. In fact, in 2006, including share price appreciation, dividends paid and share repurchases, AT&T and BellSouth combined created nearly $89 billion in value for our stockholders. "His pension value and deferred compensation has been building up ... ever since he became an officer in 1984."



A four-letter word bubbles up to my lips but I try to make it a habit to keep my writing relatively clean. Excuse me, Mr. Whitacre, you did not create the shareholder value for this company ALONE and, arguably, you had far less to do with building the company than the tens of thousands of people who worked for the company--many of whom lost their jobs when AT&T shed lots of workers for the sake of "shareholder value."

In other words, beyond knocking down the size of these pay packages, we need to instill in the rhetoric of our politicians, the MSM and the broader public the rap that companies are built not by CEOs alone but by the average worker. You may think that to be obvious but it is not--and too many politicians will not take this on directly for, I would guess, one obvious reason--campaign cash--and one less obvious, but more troubling, reason: they believe the rhetoric.

The outrage, of course, is that this legal raiding of the corporate treasury by a few people who take tens of millions of dollars out of a company, leaves no money for decent real pensions for hard-working Americans and, actually, puts many companies in financial peril. Last year, I pointed out how rich executives, not workers, are the cause of the pension crunch and financial troubles facing many big companies. Almost daily, we read about the crisis facing private pensions in many industries--but the truth is that it is often the top CEOs who are creating that very crisis because of their personal greed.

Coupled with the attack on public pensions (where pension woes are mainly a result of the obliteration of a progressive taxation system), we, then, have a narrative that repeats itself: real pensions (by which I mean a defined benefit that you can count on in your retirement years) are a thing of the past and workers should not expect a secure retirement beyond Social Security and whatever they can make in the stock market through their own investments or contributions made to 401k plans. In this narrative, however, CEOs are, of course, exempt from that gamble about the future.

We should be even more infuriated by this because of a couple of related trends. A couple of years ago, I pointed out that, while productivity had been increasing for many years (though it may be leveling off now), workers were not sharing in those productivity gains. Taking into account productivity, the minimum wage should be $19.12---which would make it almost 50 percent above today's median wage. No matter how hard people have worked, they don't get a fair return on your labor. Beyond the unfairness, it also tears at the country's social fabric because an economic system cannot endure if it is perceived to be unfair and fails to deliver a rising standard of living.

Put another way in English: Mr. Whiteacre and his cronies have succeeded because of the hard work of a lot of people but he and his ilk have pocketed the gains and left nothing for the rest.

The second trend is the insistence on the part of Republicans and too many Democrats that workers would be much better off in retirement if they practiced more "personal responsibility," meaning that they should save more and stop living so high off the hog. Over the weekend, I pointed out an article in The New York Times that described the plight of auto workers who are leaving their jobs. What caught my eye was this fact:

Across America, more than 30 million people have been forced out of jobs since the early 1980s, the Bureau of Labor Statistics reports, and regaining lost incomes has not been easy. Nearly 50 million new jobs have been created over that same period, according to the bureau, so there are always new opportunities but more often than not at lower pay. Among those who have lost work, only a third held new jobs two years later that paid as well as those that were lost, according to the bureau's surveys of displaced workers. Another third of those displaced were in jobs that paid, on average, 15 to 20 percent less than their previous employment -- while the final third had dropped out of the labor force entirely.

People can't save and they are in debt because they don't have jobs that pay a decent wage--and they work for corporations headed by folks like Whitacre who are unwilling to shortchange themselves a few million for the sake of the workers who make a company successful.

Real pensions--defined benefit pensions--are not a thing of the past IF we have a set of rules in the economic system that values those pensions, protects those pensions, requires that companies provide those pensions and, last but not least, makes unacceptable the kind of legal robbery that Whitacre and his ilk get away with.

One of the things I detest about politicians and think-tanks who claim to represent the "middle class" is that few of them will speak forthrightly about corporate greed. Until they start calling out the Whitacres of the world, they don't deserve the support of the workers who are facing a very scary future.

I always try to end these types of ruminations with suggestions. So, here are three:

1. There outta be a law...that penalizes companies for granting pensions and deferred compensation to its executives beyond a certain multiple of what the average worker gets. You pay your CEO a Whitacre pension, fine--you get hit with a huge tax penalty and those revenues are then put in a fund to strengthen Social Security or fund national health care (hey, we have targeted taxes for highway construction).

2. Change the bankruptcy laws. I'm really sick and tired of reading about companies that have used bankruptcy laws to terminate pensions--yet they continue to give executives hundreds of millions of dollars even at companies in financial distress. We should push for changes that essentially impose a proportional hit on executives to whatever hit workers take--and I would say, given the level of pensions granted executives, it should not be a one-to-one hit but a ratio that significantly scales back executive pensions in comparison to the rank-and-file worker.

3. On a positive note, companies that agree to create defined benefit pensions and limit CEO pensions would be treated far more favorably because they would be investing in the long-term health of their workers and the company.

Well, I can dream, right?

(Cross posted at Working Life and Daily Kos)