As firms’ pensions slid, executives got $350m

By Holly Rosenkrantz, Bloomberg  |  November 20, 2009

WASHINGTON - 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 found yesterday. 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.

Representative George Miller of California 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,’’ Miller, a Democrat and chairman of the House Education and Labor Committee, said in an e-mail.

The GAO, the congressional watchdog agency, looked at the compensation for executives at 10 of the country’s largest companies that turned their pensions over to the government in the past decade.