Top Executives Receive Lifetime Health Benefits
Retired executives at many corporations are continuing to receive partial or full lifetime health coverage, despite the trend of reducing or eliminating health benefits for other retirees, the Wall Street Journal reports.
A Journal analysis of dozens of recent securities filings found that the trend "spans industries, and ... is common at airlines, which have been among the most aggressive in scaling back retirement benefits for the rank and file." For example, retired Continental Airlines Chair Gordon Bethune and his dependents receive health care "at no cost," according to the company's proxy statement notes.
Steven Hall, managing director of an executive compensation firm, said companies are more likely to offer lifetime health benefits when they hire midcareer or older executives. Hall added that it can be difficult to tell what retirement benefits many companies offer to top executives, saying, "You read the proxy and then scratch your head -- they didn't say they have it, but that doesn't mean they don't have it."
Jane Banfield, a retired AT&T manager, said, "Executives are receiving multi-million dollar pensions and are in a position to easily pay for their health care. Instead, they want the icing on the cake by also guaranteeing themselves free health care."
According to the Journal, continued lifetime benefits for executives "ange[r] retirees who face rising health care premiums and copayments and, in many cases, are losing their retirement health benefits entirely." However, the trend has not yet caught the attention of "compensation watchdogs," in part because there are few figures available to estimate the total cost of the benefits (Schultz/Francis, Wall Street Journal, 4/13).