June 11, 2007 / 8:02 PM / in 12 years

CEOs enjoy big retirement payouts: study

NEW YORK (Reuters) - Chief executives of big U.S. companies are more likely than their smaller-company counterparts to get a company-funded pension plan, a benefit rapidly disappearing for the average American worker, according to a study released on Monday.

Almost three-quarters of CEOs at Standard & Poor's 500 companies .SPX are eligible for supplemental retirement benefits paid for by the corporation, the study found. The report found that a quarter of small-company CEOs are eligible for such benefits.

At the same time, the report by governance research group The Corporate Library found that over the past three decades corporate America has scaled back company-funded pensions for rank-and-file employees.

“There is some considerable irony in the fact that compensation committees feel the need to provide retirement income primarily to those CEOs most likely to have amassed sufficient wealth during their lifetime to make any pension somewhat superfluous,” wrote Paul Hodgson, the study’s author.

Hodgson, a senior research associate at the Corporate Library, examined 1,829 public company proxy statements filed under new regulatory disclosure rules that began this year. The new rules force companies to give more detail on executive pay, including pension benefits.

U.S. investor activists have complained that top executives have accumulated unreasonably large amounts of money in supplemental executive retirement plans, known as SERPs.

Of CEO plans analyzed in the Corporate Library study, the highest amount of accumulated pension benefits are those for former UnitedHealth Group Inc. (UNH.N) CEO William McGuire, according to the report.

McGuire is potentially eligible for a lump sum of $91.3 million in retirement benefits, according to the study, citing the present value of the benefits reported in the company’s most recent annual proxy statement.

McGuire’s retirement pay currently is frozen and subject to an injunction by a Minnesota federal court amid a flurry of shareholder lawsuits over the company’s stock options award practices. A report by the insurer last year concluded that many of McGuire’s option grants likely were backdated.

UnitedHealth spokesman Don Nathan said on Monday that UnitedHealth “no longer offers SERPs to its executives and last year capped the value of the only remaining SERPs that had been provided in the past.”

A spokesman for McGuire said the former chief’s SERP benefit was “a significant sum because it’s incentive based and the company earned return over 15 years that was five times the

S&P 500.”

The Corporate Library study said that AT&T Inc.’s (T.N) former CEO Edward Whitacre had the second-highest accumulated pension benefits, with a present value of $84.7 million, according to the study. Whitacre retired earlier this month.

Former Pfizer Inc. (PFE.N) CEO Hank McKinnell was third, with $77.1 million, the study found. McKinnell stepped down last year with an estimated $200 million exit package, including about $82 million in a lump-sum pension payment, despite shareholder criticism of his performance.

In fourth place was Omnicare Inc. OCR.N CEO Joel Gemunder, who had nearly $61 million in accumulated pension benefits as of the most recent proxy filing by the pharmaceutical care provider, the Corporate Library said.

Representatives from AT&T, Pfizer and Omnicare were not immediately available for comment.

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