Speaking of Obscene Pensions…
AT&T CEO Whitacre may end up being the biggest Pension Pig of all.
As an aggressive (and accurate) critic of the obscene pensions showered upon “public servants” (quotes indicate sarcasm & irony), I find corporate retirement packages - along with the often unwarranted ‘parachutes’ they get for bankrupting their companies - just as vile, but for different reasons.
First, get a load of this.
A Pension to Retire For: $158.5 Million Plus (subs. req.)
Edward Whitacre Jr. turned AT&T Inc. into the largest telecommunications company in the world by market capitalization, making acquisition after acquisition. The company’s share price has soared nearly 50% in the past year alone, leaving many rivals in the dust.
And when the 65-year-old executive steps down, he stands to rank with the corporate elite in another fashion: His retirement payout will be among the top pension packages in the country, weighing in at $158.5 million.
Mr. Whitacre’s contract extends through spring 2008, making his retirement imminent. Some investors are hoping the company will shed light on when he will be stepping down at an annual shareholders’ meeting in San Antonio today. Analysts say his likely successor is his well-respected lieutenant, Randall Stephenson, AT&T’s chief operating officer.
In addition to his $158.5 million pension package, Mr. Whitacre in retirement will have $24,000 in annual automobile benefits, $6,500 in “home security” each year and access to AT&T’s corporate jet for 10 hours a month, according to AT&T’s proxy filing with the Securities and Exchange Commission.
The Texan and his family will also receive free health insurance for life. The company will pick up the tab for taxes on most of these benefits. And he will be paid just over $1 million a year for three years for work as a consultant to the company during his retirement. For that period of time he will also receive $25,000 to cover his country-club fees.
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Mr. Whitacre is a pig, and AT&T’s Board of Directors are in violation of their Fiduciary duty, no matter what nonsense a court might say on the issue.
Spare me the drivel that he was a very successful CEO. He was well-compensated for that task.
Spare me the nonsense that “Boards need to craft such packages to lure talent.” America is loaded with talent that could have done what Whitacre did (or better), and might have done so with out making AT&T customers and shareholders pick up the tab for his “Country Club Fees.” It’s enough to make me retch.
So now you’re wondering “Is Bruno going liberal on us?” Not in the least. If there were proposed legislation to curtail, regulate, or tax these obscene benefits, I’d be against it, as Whitacre is better suited to spend “his” money than any Government. Futher, the Government will get its share of his unwarranted booty.
OTOH, if there were legislation opening up board members to liability suits from shareholders (any size shareholder, mind you), I think that would be just peachy.
Let me tell you what I think is going on here. This isn’t about “just compensation” for work well done. At this level, when a man is receiving millions of dollars per year post-retirement, along with vile little side perks like country club fees and jet time, its about ego. It’s a penis-size contest, and nothing else.
In short, Whitacre is an exceedingly small man, his Board is even smaller. The proper remedy here isn’t legislation so much as it is shame and ridicule. If you know some one who knows him, tell him I said so.
In closing, nothing written above obviates the need to end the public pension abuses seen in all over America. As decent people try to warn their fellow citizens that these abuses are bankrupting our governments (they are), the piggishness of the corporate class makes our jobs harder.
Particularly when one factors in the double standard of raiding employee plans to pay CEOs.
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April 29th, 2007 at 6:13 am
I work for this company and this is insane. I am lucky nbot to be on the management side. They treat there low level managers like dirt. They have to pay for there on health benifits. Also if a worker misses three days in a year for sickness, even with doctors excuse, he can be suspended for a day.
April 30th, 2007 at 10:17 pm
I listened to a bit of the pension talk. As teachers (”public servants”), we MUST pay into the TRS of Illinois. I’d much rather take that money and put it into our 403b, but the TRS is broke and our “dues” pay for the currently retiring teachers. By time we retire, there won’t be money there, with Blogo dipping into our well. When does it stop? I’d love to stop paying this and better-invest our money ourselves.
May 1st, 2007 at 7:31 am
DJ,
Excellent point. In all my ranting about public pensions (not just teachers) I occasionally get around to pointing out what you just said.
The younger teachers are getting royally screwed by the current scheme, as there isn’t enough money on the planet to fund the bumps, the 55 year retirement age, and the vast numbers of people added to the payrolls (class size draws, social workers, directors, coordinators, etc.)
Every public employee should have a 401(k) 403(b) style plan, and the State (employer) should/can kick in a portion.
Regardless of your views on education reforms, your cohort of teachers should be 100% behind constitutional reform in IL.
The Defined Benefit plan, combined with the Constitution pension guarantee is a recipe for waste and corruption.
May 1st, 2007 at 9:09 am
So, where do we start?