This from today's daily Torygraph.
Retailer and news and magazine distributer WH Smith's have paid out a bonus of over £2million to CEO Kate Swann closing down the company pension scheme.
Unite members working in the distriution arm of the company are rightly angry at this development and my National Officer colleague Ann Field expresses our view in the article.
"Union anger over WH Smith bonus
By Philip Aldrick
Last Updated: 12:28am GMT 25/03/2008
Kate Swann, chief executive of high street newsagent WH Smith, secured a maximum bonus payout of £2.45m only after removing the staff's long-standing pension benefits.
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The retailer made a £2m annual saving by closing the final salary pension scheme to its 1,800 members last year, the report and accounts reveal. Had the scheme not been closed, the company would have missed the profit target under Ms Swann's three-year "management investment plan", set up in 2004.
Kate Swann: her bonus would have been £120,000 lower had the pension scheme been left open
WH Smith confirmed that her bonus would have been £120,000 lower had the pension scheme been left open.
Ann Field, national officer at the union Unite, said: "She's one of a long list of company directors who have made their money on the backs of others. She's brought it to a new low, though, earning a bonus by destroying other people's pensions."
The Retail Book Association estimated that a scheme member aged 45 on £380 a week would have amassed a pension paying £80 a week by 65.
Following the change, they will get just £29.60.
The decision to transfer staff out of the final salary scheme, which was closed to new members in 1995, also triggered an exceptional "curtailment" profit for shareholders of £10m, though this is excluded from the calculation of Ms Swann's bonus entitlement.
Under the incentive plan she invested £475,000 of her own money in WH Smith shares and qualified for a maximum payout if earnings per share reached 29.3p in 2007. Last year's earnings landed right on the target price, granting her 717,778 shares issued at 343p.
Had the pension scheme been untouched, earnings would have been 28.3p, reducing her award by 35,000 shares. Rewards under the "management investment plan" were complicated by Ms Swann's decision to separate WH Smith from its distribution arm Smiths News in August 2006.
The pension changes applied across both companies and saved Smiths News £7.4m last year, its annual report shows. Despite the saving, Smiths News directors missed the maximum payout. Some 700 workers, apparently on better pay, were in the scheme at Smiths News.
In her five years at the helm, Ms Swann has aggressively cut costs amid falling sales to improve profitability.
A WH Smith spokesman said the pension scheme closure "was not a cost-saving exercise… it was to manage the risk in the scheme and protect its long-term future". But actuaries said longevity risk would not be affected by the changes as final salary pensions already earned will still cost more if staff live longer.
WH Smith said it paid £282m into the scheme over the past four years to remove the £250m pension deficit. It is committed to a further £10m of annual funding for the next four years. However, Unite said the company had previously taken a "12-year pension holiday"."