UAL Corp., US Airways Group Inc., and eight other companies paid executives $350 million in the five years before the United States was forced to take over their underfunded employee pension plans, a government report said.
One airline company missed $979 million in required pension contributions while its top three executives took $55.5 million in compensation, and another paid four executives $120.4 million amid two bankruptcies, a Government Accountability Office report yesterday said.
Data including dates of the pension terminations, stock awards, and pay levels show the unnamed companies were UAL, the parent of United Airlines, and US Airways.
Benefits to retirees were cut in some cases by as much as two-thirds as executives got salary increases, stock awards, retention bonuses, and other pay, the
GAO said in a report that studied pension takeovers from 2002 through 2005.
U.S. Rep. George Miller (D., Calif.) is considering legislation that will freeze executive compensation if a company's rank-and-file pension plan becomes significantly underfunded."It is fundamentally wrong that executives were able to line their pockets with millions of dollars from bonuses, stock options, and free joyrides on corporate jets while watching their workers' retirement security slip into peril," he said.
A UAL spokesman said the company agreed to compensate Chief Executive Officer Glenn Tilton as part of his employment agreement "for the substantial value he forfeited by leaving his previous employer, which has nothing to do with a United pension payment or plan." Mr. Tilton joined UAL in 2002.
A US Airways spokesman declined to comment.
The GAO, the congressional watchdog agency, looked at the compensation for executives at 10 of the largest companies that turned their pensions over to the government in the past decade.
Steelmaker LTV Corp., towel manufacturer WestPoint Stevens Inc., camera company Polaroid Corp., Reliance Insurance, and Pillowtex Corp. are among the other companies singled out, according to the report.
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