The National Post has a story based on a survey of CEOs that suggests the pain of pension plan pullbacks must be shared among senior executives and their rank and file employees. Not surprisingly, the story cites Nortel’s plan to switch to a defined contribution plan from a defined benefits plan, and CEO Mike Zafirovski’s decision to cut his “special annual pension” (which is a supplement to Nortel’s regular pension plan) to $355K a year from $500K. Mike Z.’s move was a nice gesture but he could have scored huge brownie points with his employees by walking away from the special pension altogether. This could have meant a $10-million haircut but Mike Z. could easily make it up with a few more stock options and bonuses.
Pension Fairness
The National Post has a story based on a survey of CEOs that suggests the pain of pension plan pullbacks must be shared among senior executives and their rank and file employees. Not surprisingly, the story cites Nortel’s plan to switch to a defined contribution plan from a defined benefits plan, and CEO Mike Zafirovski’s decision to cut his “special annual pension” (which is a supplement to Nortel’s regular pension plan) to $355K a year from $500K. Mike Z.’s move was a nice gesture but he could have scored huge brownie points with his employees by walking away from the special pension altogether. This could have meant a $10-million haircut but Mike Z. could easily make it up with a few more stock options and bonuses.