Sunday, January 29, 2006
Like an up-and-coming number of companies, Countrywide Financial Corp. of Calabasas is phasing out its pension plan to save money, and employees hired since Jan. 1 won't be eligible for lifetime income in retirement.
But new countrywide executives still qualify for a special executive pension; one that will pay Chief Executive Angelo Mozilo up to $3 million a year for life. First American Financial Corp. of Santa Ana also has one plan for those in the cubicles and one for those in the executive suites. The workers saw their pension plan frozen in 2001. But a particular plan for executives will pay Chief Executive Parker S. Kennedy nearly $1 million a year for life if he remains with the company until age 65.
Major corporations throughout the country are abandoning their pensions, saying the benefits are too costly and less important, with the widespread adoption of individual withdrawal accounts. But many of these same companies are retaining special pension plans for top executives, saying they would lose the top brass to rivals without them."We view this type of program as a standard and necessary component in recruiting and retaining talented top executives," Kelly Dunmore, vice president of employee benefits at First American Financial, said in a statement. Others view it as a double standard.
posted by kanth
@ 9:05 PM
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