Thursday, May 20, 2010

Gold-Plated Executive Pensions at the Washington Post

The Post has been on a tear lately about Maryland’s teacher pension program, calling it “untenable” and a “budget-busting system.” But the state has nothing on the Post’s own pension program for its executives, which is far better than any government employee could ever hope to have.

Washington Post executives qualify for FOUR different pension programs. First, they are enrolled in The Retirement Plan for Washington Post Companies, which is the defined benefit plan in which many company employees are enrolled. Second, they participate in the Supplemental Executive Retirement Plan (SERP), which the company says “was designed to retain and recruit key executives. Participants in the SERP, including named executive officers, are selected by management as employees whom management most wants to retain, because of their superior performance, and approved by the [Compensation] Committee.” Unlike the retirement plan for other employees, the SERP uses bonuses in its benefit formula. Third, the SERP contains a supplemental defined contribution plan which functions much like a 401(k), with the company matching executive contributions. And fourth, executives can participate in a deferred compensation plan, which allows them to delay receipt of pay and invest it in their choice of investment indexes until they retire.

Post executives do not need pensions as badly as most people. Their top five executives have collectively been paid $22.6 million over the last three years.

Even so, the company has committed a total of $21.5 million in pension benefits to its top five executives.

Chairman/CEO Don Graham does not participate in the defined contribution or deferred compensation plans, but his family does have the right to elect 70% of the company’s Board of Directors through its nearly exclusive ownership of Class A stock. That means the family controls the company regardless of how much stock is owned by outside investors.

The Post does not detail salaries and benefits for all of its executives in its SEC filings, but it does mention compensation for Katharine Weymouth, the Post’s publisher since February 2008. Weymouth’s salary was $220,000 in 2007, $500,000 in 2008 and 2009 and will be $550,000 starting in April 2010. She received performance bonuses of $108,167 in 2007, $33,263 in 2008 and $462,630 in 2009. The Post’s newspaper division lost $193 million in 2008 and $164 million in 2009, probably the two worst years ever in the history of the paper. As the company cannot possibly be rewarding Weymouth for the newspaper’s financial returns, they must be rewarding her for the infamous “Dinnergate” scandal.

Additionally, the company gave “incentive compensation awards” of $8.0 million to 94 executives in 2007, $5.2 million to 50 executives in 2008 and $16.2 million to 75 executives in 2009. The average size of these awards was $85,106 in 2007, $104,000 in 2008 and $216,000 in 2009.

The Post loves to rant about pay and pensions for public employees while simultaneously showering unending riches on its executives. If the Post truly wants to see Maryland restrain employee pensions, its bosses should lead by example.