Corporations having trouble paying pensions

[RuntheDamnBall]

I'm still calling bull sh--. NO ONE would turn down millions given to them. No one.

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Believe what you want. If those millions being given to me meant the disenfranchisement of a workforce that got me where I was, I would not take it. It looks bad, and it is bad. I've grown up knowing what it means to not have a lot, and I'm the same person with or without more money. There's no reason anybody at the front end of a corporation should be running away with millions and leaving the people that got them there in the dust with empty promises. I'm not saying it's wrong to make money -- I'm saying it's wrong to do so absolutely at the expense of people who make you that money.

[GG]

Who stole AD's login, that he's arguing for government intervention in totally private transactions?

 

Bull.  Your basic suggestion was that everyone should unionize (I'm sure that's not what you intended).  Companies are the ones who sign employees into their pension systems - not the other way around.  If you can't make it work then there's no way in hell the CEO and other "noblemen" deserve seven-to-10 figure payouts.

 

There's absolutely nothing wrong with the concept of workers "unionizing" to share information on wages, benefits and working conditions and using that information to their advantage in negitiating with management. That's what unions are supposed to do. That basic premise is a long way off from what organized labor has turned into in the US

 

As I have stated before, the government should expand the IRA systems in this country so people can put more than the piddling amount away allowed now - AND it shouldn't be taxable either on investment or withdrawl.    On the company side, no one is going to convince me that it's acceptable to pay ONE person billions of dollars in cash and perks when the same company is saying that down the road they are going to be bankrupt because of pension obligations.  Ultimate smoke and mirrors garbage there.

 

And what you're misisng is that expanding the IRA system will do nothing to curb the pension abuses to senior management.

 

Whoda thunken that you would be singing a populist tune? I can't tell you whether it's acceptable for a private company to pay anyone in their employ $1 billion. It's obscene, it's excessive, but at the end it's a private transaction, and the government should keep its nose out of it.

 

What the government can do to protect investors is to continue expanding laws on disclosure. Note that no one seemed to care about these issues before, because no one knew the extent of these issues since they were masked in the financial statements. The main reason for the outcry is that investors are finally seeing the

numbers and aren't happy.

 

That's a copout.  The biggest problem with government today is they provide virtually no oversight on those willing to line their pockets the deepest.  Pretending the individual should be responsible for "due diligence" on the secret inner workings of multi-national companies is ludicrous.  If the damn government took on this simple task we wouldn't need things like Social Security to bankrupt society.

 

There's plenty of governmental oversight with the SEC, but there are so many companies out there, in order to do what you suggest you'd need to add another 100,000 examiners to the federal government. Again, you sure you're AD?

 

There are thousands of analysts looking at investments, and if you continue to open up the books, they'll do an adequate job of policing. The Delta Air example is not an extreme. It's an example that the system works. All the recent scandals were not brought about by diligent government protection, it was done by analysts smelling a rat and continuing pressing the issue, until the crooks got caught. Look at the Disney shareholder lawsuits, look at the ongoing Viacom lawsuit. It's not as silent as you claim it is, and certainly doesn't beg for more government intervention.

 

The bubbling stock option dating scandal is directly related to more disclosure, and not government oversight.

 

Corporate boards aren't the old pushovers, and there's a concerted effort to get more accountability and responsiveness to the shareholders. In many cases the evil trial lawyers and unions have done a good job in the policing effort, because that's what they're supposed to do. So please don't use their extremes to validate a greater government role.

[cromagnum]

I'm still calling bull sh--. NO ONE would turn down millions given to them. No one.

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I would turn it down.

[erynthered]

I'm still calling bull sh--. NO ONE would turn down millions given to them. No one.

716941[/snapback]

 

 

I'm with you on this one. The ones saying they would turn it down, are full of sh--.

 

None of them said, I'd take it and give it to charity, how !@#$ing ironic. !@#$ing hypocrites.

 

Bless your hearts.

[Crap Throwing Monkey]

I'm still calling bull sh--. NO ONE would turn down millions given to them. No one.

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I would. I'd have to earn it, somehow. If the value of the compensation were directly tied to my performance as an executive (stock options, for example), I'd take it. If it were "Here's $100M for showing up, thanks", I couldn't do it and sleep at night.

[erynthered]

If the value of the compensation were directly tied to my performance .

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Thats the difference. But, then again, you knew that.

 

Check!

[cromagnum]

Unbelievable money story.

I was doing work for a multi billionare oil man I think his name was kalishman?

Highrise penthouse, 10+ mil., close to 10.000sq/ft, nursery. That's what the bld. supervisor called it, he said all the family members use the pad with thier younsters. Every bedroom had 1 or 2 cribs and baby toys and gear throughout the suite..5 day job and we were told to hurry, because laura bush and other vip's were coming for the weekend. After were heard that we went to the bar every night and drank whiskey, beer and ate hot spicy food to destroy the penthouse toilets in the morning:devil:

 

All those kids in the family, when they turn 18 they are given 20 million to start out with, that's cool, dude got the money and gave it to the kids. Most of these ultra rich people have houses all over the world and they just bounce from one to the next. His wife was kind and communicative in friendly way, she gave each of us bottles of wine and wrote a nice letter to the company about the great workmanship. Kind of felt bad about the bombs we dropped in all the toilets You get a chance to stink up the toilets on world shakers, you do it.

[Alaska Darin]

I'm with you on this one. The ones saying they would turn it down, are full of sh--.

 

None of them said, I'd take it and give it to charity, how !@#$ing ironic. !@#$ing hypocrites.

 

Bless your hearts.

717063[/snapback]

Thanks for speaking for everyone. I'd turn it down. I'm not that guy and no amount of money is going to change that. I have a conscience.

[Alaska Darin]

Who stole AD's login, that he's arguing for government intervention in totally private transactions?

I'm talking about government oversight. Supposedly that's what the Framers had in mind.

 

There's absolutely nothing wrong with the concept of workers "unionizing" to share information on wages, benefits and working conditions and using that information to their advantage in negitiating with management.  That's what unions are supposed to do.  That basic premise is a long way off from what organized labor has turned into in the US

Kind of like the basic premise of leading a company, you mean? One does not somehow trump the other, nor is it bigger than the idea of fairness.

 

And what you're misisng is that expanding the IRA system will do nothing to curb the pension abuses to senior management. 

You missed the point. If companies can't pay their pension liabilities to EVERYONE, then they shouldn't pay them to ANYONE. To alleviate that little problem, the government only needs to expand the ability for the individual to take care of their own retirement. The current system is wholly unfair to all but the uber rich, who have little to worry about where that is concerned.

 

Whoda thunken that you would be singing a populist tune?  I can't tell you whether it's acceptable for a private company to pay anyone in their employ $1 billion.  It's obscene, it's excessive, but at the end it's a private transaction, and the government should keep its nose out of it.

 

What the government can do to protect investors is to continue expanding laws on disclosure.  Note that no one seemed to care about these issues before, because no one knew the extent of these issues since they were masked in the financial statements.  The main reason for the outcry is that investors are finally seeing the

numbers and aren't happy.

It's not a private transaction when a company is traded publically. To me there's a difference.

 

There's plenty of governmental oversight with the SEC, but there are so many companies out there, in order to do what you suggest you'd need to add another 100,000 examiners to the federal government.  Again, you sure you're AD?

Call me crazy for wanting to get rid of the unConstitutional stuff so the government can do what it was intended to do. One of those things is to make sure the little guy doesn't get uber-screwed by those with the deepest pockets. I wouldn't have a problem cutting 100,000 people out of the current government (that wouldn't even make a dent) and putting them immediately to work overseeing this.

 

There are thousands of analysts looking at investments, and if you continue to open up the books, they'll do an adequate job of policing.  The Delta Air example is not an extreme.  It's an example that the system works.  All the recent scandals were not brought about by diligent government protection, it was done by analysts smelling a rat and continuing pressing the issue, until the crooks got caught.  Look at the Disney shareholder lawsuits, look at the ongoing Viacom lawsuit.  It's not as silent as you claim it is, and certainly doesn't beg for more government intervention.

Let's just say I agree and disagree.

 

The bubbling stock option dating scandal is directly related to more disclosure, and not government oversight. 

 

Corporate boards aren't the old pushovers, and there's a concerted effort to get more accountability and responsiveness to the shareholders.  In many cases the evil trial lawyers and unions have done a good job in the policing effort, because that's what they're supposed to do. So please don't use their extremes to validate a greater government role.

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We can agree to disagree on this one. I don't like how far this pendulum has swung and I have personally witnessed how nervous crooked executives get at the mention of an unannounced DCAA audit. The biggest problem I've seen is the government doesn't have very competent people checking the books - but they are tenacious.

[GG]

I'm talking about government oversight.  Supposedly that's what the Framers had in mind. 

 

Kind of like the basic premise of leading a company, you mean?  One does not somehow trump the other, nor is it bigger than the idea of fairness.

 

There's already a litany of laws, including the securities acts of '33 & '34, Sarbanes Oxley and countless other federal and state regulations. These laws do what they're supposed to do - catch people who cheat and break the law and prosecute them. Once you introduce the fuzzy element of "fairness" into the equation, then you become the grand arbiter of life, because fairness is always in the eyes of the beholder.

 

As to wrapping yourself in the Framers' blanket, the main thing they agreed on was to end governmental interference in their private life, which included conducting business. If they were so concerned about the little guy, why did they give voting power only to white male landowners?

 

You missed the point.  If companies can't pay their pension liabilities to EVERYONE, then they shouldn't pay them to ANYONE.  To alleviate that little problem, the government only needs to expand the ability for the individual to take care of their own retirement.  The current system is wholly unfair to all but the uber rich, who have little to worry about where that is concerned.

 

You're getting ahead of yourself, and missing the bigger point. A pension plan is a form of compensation, and you are advocating governmental oversight of pay in a private company. (Let's bring the proverbial slippery slope out now) Please tell me how the government can decide what is fair pay? Should private industry follow a regimented governmental pay scale, where the Bill Gateses and Warren Buffets no longer exist?

 

I think I know where you're trying to bring this argument, and why you're getting ahead of yourself. Yes, it's obscene that many companies with large pension obligations shut the plans down for rank and file employees while at the same time maintain rich pension benefits for executives. But, that is an issue between the employees and the company. If you feel that you have been wronged, then by all means, join a union and fight for your rights. That's the union's job. If you feel that the union is a bunch of self preserving mucks that don't care about you, there are other avenues to seek retribution if you've been legally wronged. There is a reason the tort system is in place. I think that the IBM and AT&T employees cited in the original article have a very sound case on their hands.

 

While this may seem unfair, as long as the company doesn't file bankruptcy and the pension plan isn't taken over by PBGC, then it is a company matter, and for better or worse, the compensation is best determined by the board of directors. Mandating that every company scrap a pension plan in favor of a 401k plan is ridiculous.

 

If the company files Ch. 11, believe me, each benefit and compensation plan will get plenty of scrutiny, and chances are that if there's evidence that management was sending disproportionate contributions to a non-qualified pension plan for senior management, it will not be a quiet process. The reason that I brought the Delta example is the precise illustration that the system works when it has to.

 

 

It's not a private transaction when a company is traded publically.  To me there's a difference. 

 

Now I know you're decided to trade the frozen tundra for the green lawns of Virginia.

 

A publicly traded company is very much private, as you have to obide by the terms of the company's bylaws when you own the stock, not the Constitution of the US. "Public" is simply a term used to describe the facilitation of trading the stock of a large private company on an exchange - which is a large series of private transactions. There's nothing public about it. Moreover, if you take greater steps towards governmental oversight, you will drive a lot more companies off the traded exchanges.

 

Call me crazy for wanting to get rid of the unConstitutional stuff so the government can do what it was intended to do.  One of those things is to make sure the little guy doesn't get uber-screwed by those with the deepest pockets.  I wouldn't have a problem cutting 100,000 people out of the current government (that wouldn't even make a dent) and putting them immediately to work overseeing this.

 

Care to share details on how to implement this? Any 100,000 federal employees? So, even while you admit that "the government doesn't have very competent people checking the books" you would favor having 100,000 more of them deciding what's best for a private company?

[RickW]

Hell no. I know I can be sent packing any day. But I'm not so weak-kneed and limp-wristed to be paralyzed over it. I continue to do my best, and that's all I can do. Then again, it helps that I don't work in textiles or automobiles or any other manufacturing job.

 

Also, if I wanted, I could go to work for myself and probably double my income. It's just that this company gives AWESOME benefits.

 

Forgive me for mocking your chicken little attitude about this, but it's simply not worth it to worry about what your employer's gonna do. Keep a good amount of savings for a rainy day, and you'll weather any layoff.

 

And another thing, if I was a top-level exec, I'd be doing everything I could to get my piece of the pie as well. And so would you. If you say you wouldn't, you'd be a hypocrite. So how can you hold it against 'em? Sounds like jealousy to me.

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No offense or anything but I am curious. If you can double your income (assuming that the level of risk is acceptable) as an entrepreneur and your predicted future retirement income is acceptable at your current income level, what type of benefits could you not profitably cover with the marginal increase in income from self-employment?

 

If you are business-oriented than you can probably relate to the corporation as a nexus of contracts. When you are employed with a corporation you have entered into a contract of employment and the "benefits" are part of that contract, generally in lieu of current cash flow. It would seem logical that a corporation would be legally bound to honour all of the terms of that contract, including any future cash flows that are fundamentally inherent to the contract.

 

Your "piece of the pie" should be based on your contribution. In the recent past you would be very hard-pressed to identify many corporate executives that have contributed at a level that would positively correlate to their final compensation.

[Pine Barrens Mafia]

No offense or anything but I am curious. If you can double your income (assuming that the level of risk is acceptable) as an entrepreneur and your predicted future retirement income is acceptable at your current income level, what type of benefits could you not profitably cover with the marginal increase in income from self-employment?

 

If you are business-oriented than you can probably relate to the corporation as a nexus of contracts. When you are employed with a corporation you have entered into a contract of employment and the "benefits" are part of that contract, generally in lieu of current cash flow. It would seem logical that a corporation would be legally bound to honour all of the terms of that contract, including any future cash flows that are fundamentally inherent to the contract.

 

Your "piece of the pie" should be based on your contribution. In the recent past you would be very hard-pressed to identify many corporate executives that have contributed at a level that would positively correlate to their final compensation.

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Excellent analysis. And you're right about the risk/reward issue. To wit, I've started working outside of my regular job with the hopes of building a clientele large enough that I might leave my regular job altogether.

 

That being said, I thought the free market was all about maximizing profit, be it personal- or business-based? These guys are asking for the money because SOMEONE is giving it to them.

 

See what I mean? If people have a problem with executive pay, take it up with the boards of the respective corporations that hire them....

[RickW]

Excellent analysis. And you're right about the risk/reward issue. To wit, I've started working outside of my regular job with the hopes of building a clientele large enough that I might leave my regular job altogether.

 

That being said, I thought the free market was all about maximizing profit, be it personal- or business-based? These guys are asking for the money because SOMEONE is giving it to them.

 

See what I mean? If people have a problem with executive pay, take it up with the boards of the respective corporations that hire them....

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Fair enough. It is reasonable to state that the market economy is based on return maximization.

 

It is also a fact that senior management in widely held public corporations can wield considerable influence, if not control in some cases, over executive compensation plans. It is these same people that are supposedly working in the best interests of the shareholders. The conflict here is readily determinable and documented "ad nauseam" and has been attributed to many of the great frauds of our time (re: options and Enron - also debatable I suppose).

 

Regardless, I am not really disagreeing with you. Many people are driven by greed/materialism and this is probably best epitomized in the corporate culture to some degree. Morals would be a nice counterweight once in a while though.......

[Pine Barrens Mafia]

Regardless, I am not really disagreeing with you. Many people are driven by greed/materialism and this is probably best epitomized in the corporate culture to some degree.  Morals would be a nice counterweight once in a while though.......

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100% agree. My issue was not with saying the over-active compensation is excessive, it's with the bogus claims that anyone here put into that position would not take the money. That's where I call bull-shiat.

 

[KD in CA]

Care to share details on how to implement this?  Any 100,000 federal employees?  So, even while you admit that "the government doesn't have very competent people checking the books" you would favor having 100,000 more of them deciding what's best for a private company?

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I'm sure it would work just fine.

 

 

 

People want more government oversight of business? Scary.

[Alaska Darin]

There's already a litany of laws, including the securities acts of '33 & '34, Sarbanes Oxley and countless other federal and state regulations.  These laws do what they're supposed to do - catch people who cheat and break the law and prosecute them.  Once you introduce the fuzzy element of "fairness" into the equation, then you become the grand arbiter of life, because fairness is always in the eyes of the beholder.

 

As to wrapping yourself in the Framers' blanket, the main thing they agreed on was to end governmental interference in their private life, which included conducting business.  If they were so concerned about the little guy, why did they give voting power only to white male landowners?

You're getting ahead of yourself, and missing the bigger point.  A pension plan is a form of compensation, and you are advocating governmental oversight of pay in a private company.  (Let's bring the proverbial slippery slope out now)  Please tell me how the government can decide what is fair pay?  Should private industry follow a regimented governmental pay scale, where the Bill Gateses and Warren Buffets no longer exist?

 

I think I know where you're trying to bring this argument, and why you're getting ahead of yourself.  Yes, it's obscene that many companies with large pension obligations shut the plans down for rank and file employees while at the same time maintain rich pension benefits for executives.  But, that is an issue between the employees and the company.  If you feel that you have been wronged, then by all means, join a union and fight for your rights.  That's the union's job.  If you feel that the union is a bunch of self preserving mucks that don't care about you, there are other avenues to seek retribution if you've been legally wronged.  There is a reason the tort system is in place.  I think that the IBM and AT&T employees cited in the original article have a very sound case on their hands.

 

While this may seem unfair, as long as the company doesn't file bankruptcy and the pension plan isn't taken over by PBGC, then it is a company matter, and for better or worse, the compensation is best determined by the board of directors.  Mandating that every company scrap a pension plan in favor of a 401k plan is ridiculous.

 

If the company files Ch. 11, believe me, each benefit and compensation plan will get plenty of scrutiny, and chances are that if there's evidence that management was sending disproportionate contributions to a non-qualified pension plan for senior management, it will not be a quiet process.  The reason that I brought the Delta example is the precise illustration that the system works when it has to.

Now I know you're decided to trade the frozen tundra for the green lawns of Virginia. 

 

A publicly traded company is very much private, as you have to obide by the terms of the company's bylaws when you own the stock, not the Constitution of the US.  "Public" is simply a term used to describe the facilitation of trading the stock of a large private company on an exchange - which is a large series of private transactions.  There's nothing public about it.  Moreover, if you take greater steps towards governmental oversight, you will drive a lot more companies off the traded exchanges. 

Care to share details on how to implement this?  Any 100,000 federal employees?  So, even while you admit that "the government doesn't have very competent people checking the books" you would favor having 100,000 more of them deciding what's best for a private company?

718514[/snapback]

I hope you know I was messing with you, just to get some kind of information flow going.

[Jon in Pasadena]

If people have a problem with executive pay, take it up with the boards of the respective corporations that hire them....

718582[/snapback]

The real fun begins when you actually do the research to see who sits on the boards of what corporations, and you discover that its the same fat cats who are sitting on the boards of multiple corporations, foundations, etc. And they all vote each other these outlandish guaranteed pensions & golden parachute packages. (You know, kind of like Congress does.) And the poor working schmucks who own 100 shares or whatever, and receive the little proxy vote notices every couple of years, generally have no clue who these people are, so they usually just do the default thing which is to go with the "recommendation of the directors". Whee!