It's hard to know what to say. Sprint Nextel's CEO collects a bonus package valued at $19 million at the same time that Sprint Nextel suspends contributions to the employee 401K program. According to ft.com, Sprint has (or had) 56,000 employees – they announced 8,000 layoffs at the same time they announced the 401(k) suspension.
Assuming the former number (56,000), and a US-average payroll of $36,000, Sprint has a payroll of $2 billion. 5% (the maximum match) is $100 million. It's unlikely that Sprint was experiencing even that much cost. If the CEO is getting a bonus package worth $19 million for 2008, that represents 20% of the maximum match Sprint would have to pay.
This seems unconscionable. It's being repeated across the US economy by the big companies. 401(k) contributions are being frozen; executive compensation doesn't seem to be suffering.
I have a great belief in the profit motive and the goods contributed by individual enterprise. However, corporations beyond a certain size seem to be (based on compensation patterns) constructively managed to enrich top managers in preference to serving basic needs of their employees. Other countries fight this by providing basic needs socially rather than privately. Waste ensues; but waste of this kind (giving huge bonuses to a small number of managers while cancelling benefits) is rare in government-funded programs.
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