US executive pensions 'increasing'

The value of US executive pensions increased in 2008 despite a median fall in share prices, a new study has revealed.

The Wall Street Journal conducted an analysis of the disclosures of 340 of the companies listed on Standard & Poor's 500 stock index, discovering that executive pensions rose by an average of 19 per cent.

In addition, the report found that more than 200 executives witnessed a 50 per cent increase in benefits paid after retirement, while share prices dropped by a median of 37 per cent.

The newspaper attributed these gains to generous pension formulas and "arcane" techniques that trigger payouts regardless of company performance.

Specifically, the Journal cited contract clauses that increase payouts when executives reach a certain age and when companies change the interest rates used to calculate pensions.

The analysis read: "Surging pay fuelled much of the growth of executive pensions, which generally are calculated by multiplying pay by years on the job."

Executive remuneration has dominated the headlines in the US in recent months, with the US pay tsar Kenneth Feinberg coming under fire last month for refusing to micro-manage the compensation structures of the private sector's top executives.