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PENSION SHORTFALLS | GOVERNMENT REPORT

Executives pocketed $350M

A report found that several airline companies paid hundreds of millions to executives as pensions went underfunded.

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Bloomberg News

UAL, US Airways Group and eight other companies paid executives $350 million in the five years before the U.S. government was forced to take over their underfunded employee pension plans, according to a government report.

One airline company missed $979 million in required pension contributions while its top three executives took $55.5 million in compensation, and another paid four executives $120.4 million amid two bankruptcies, a Government Accountability Office report found. Data show the unnamed companies were UAL, the parent of United Airlines, and US Airways.

Benefits to retirees were cut in some cases by as much as two-thirds, as executives got salary increases, stock awards, retention bonuses and other pay, the GAO said in a report that studied pension takeovers from 2002 through 2005. Rep. George Miller of California is considering legislation that will freeze executive compensation if a company's rank-and-file pension plan becomes significantly underfunded.

A UAL spokeswoman, Jean Medina, said the company agreed to compensate Chief Executive Officer Glenn Tilton as part of his employment agreement ``for the substantial value he forfeited by leaving his previous employer, which has nothing to do with a United pension payment or plan.'' Tilton joined UAL in 2002.

A US Airways spokesman, James Olson, declined to comment.

The GAO, the congressional watchdog agency, looked at the compensation for executives at 10 of the largest companies that turned their pensions over to the government in the past decade.

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