The value of top executives's pensions rose an average of 19 percent last year even as their companies' share prices dropped, The Wall Street Journal reported Tuesday.
Over 200 executives saw pensions jump over 50 percent. The spike, the Journal said, was due in part to "generous" pension formulas based on executive pay and to "arcane" techniques that trigger the increases.
Executive pensions grew even though the share prices at the firms dropped an average of 37 percent in 2008, while many companies froze employee pensions and suspended contributions to retirement plans, noted the newspaper.
Its analysis was based on two years of disclosures from 340 of the Standard & Poor's 500-stock index.
The journal cited as an example pharmaceutical company Merck & Co. chief executive Richard Clark, who saw the value of his pension jump from 11.9 million to 21.7 million dollars, thanks in part to a six-million rise in the portion of his compensation used to calculate his pension.
By including "certain incentive payments" in the compensation used to calculated its CEO's pension, oil giant ConocoPhillips boosted Jim Mulva's pension by 9.5 million dollars to reach 68.2 million.
Exxon Mobil chief executive Rex Tillerson's four-million-dollar bonus helped bring his pension from 23 million to 30 million dollars, because the company uses the top three bonuses in the five years prior to retirement to calculate executive pensions.
After Constellation Energy Group Inc. obtained record results in 2007 and awarded chairman and CEO Mayo Shattuck an additional two years of service, his pension grew by 45 percent -- 10.3 million dollars.
Gas and electric company PG&E Corp. awarded its chief executive, Peter Darbee, another five years of service in 2008, which helped fuel a 38 percent increase in his pension, from 3.8 million to 5.2 million.
