Sears' huge pension liabilities was cited as one of the main reasons that prevented any possible re-structuring that could have saved the company when it was declining and heading to bankruptcy...
I mean, let's be realistic here. For how long was Sears in this pitiful state?... Getting all that real estate + semi-established brand was a private equity's wet dream, yet nobody ever contemplated that option.
And now that Sears is bankrupt, their pension fund is going into default and passed to the government who will need to fulfill those obligations (thankfully the pension benefit guaranty is not funded with tax revenues).
Of course, I'm not blaming Sears retirees. They deserve their pensions as much as any other person. But the reality is that corporate America learned this lesson a while ago and Sears is just one of many examples.
Is not about pleasing shareholders and fucking up employees as this article claims. It's a problem of business viability and long-term expectations.
Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. And guess what, they will punish you at much larger magnitude than your declining revenue.
So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral. And now your employees will be pissed, and the press will come and write an article claiming that your once frugal company is now a money firepit and that morale is low, completely forgetting their initial narrative on how you used to fuck over your employees.
> Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. ... So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral.
This basically, is what people mean when they say "fuck the system". It's not about some particular greedy bosses or managers or even shareholders. It's that the whole economy is apparently now structured in a way that businesses don't seem to have a choice. (Or at least the managers believe they don't have a choice).
Sure they do. There are plenty of smart, prudent retirement plans for companies to offer to their employees that don't involve crippling liabilities down the road. Defined contribution pensions, tax free retirement accounts, dollar-for-dollar matching (up to a limit) etc.
Defined benefit pensions were a bad idea born of a "I'll be retired before then so let's kick the can down the road" mentality.
Or even just direct contributions to retirement plans for all employees, no matching required. E.g. a company contributing $500 per month into the employee's 401k. My last company did something similar, but it was tied to salary and it was annual (prorated). I think a better case can be made for doing it monthly, so you don't need to bother with prorating, and also to do constant amounts for all employees rather than tie it to salary.
My current employer defaults employees to 10% and does dollar-for-dollar matching, but there's people who opt out because they want (possibly even need) all of their salary now, and thus they don't get any contributions in their plan. Yet these are precisely the people who would most need the contributions, because they're least likely to save up money in other vehicles!
Definitely sounds better than most plans. Also what's been proven to be incredibly effective, and what many companies are doing now, is to make retirement contributions opt-out rather than opt-in. I forget the exact stats but it was something like 30% contribute to a plan if it's opt-in, but 80% do if it's opt-out. It's a huge difference.
I'm not sure a defined benefit pension is inherently worse than a defined benefit salary, but the real problem is tying it to the continued life of the company rather than a nice separate fund.
A well-executed, professionally administered, and properly run defined benefit pension system is by far superior to every other option on offer. It offers predictable costs for the employer, predictable benefits for the employer, and all of this will continue without the company for as long as the pensioner lives.
In practice, there's been a lot of subtlety to this. It's very easy to make changes with low-visibility long-term negative impacts and high-visibility short-term positive impacts. Public-sector pensions in the US have famously assumed unrealistically high discount rates, among other things, because that turns into small contributions in the short term which employees and unions love.
Decades down the line, everyone gets screwed. But the people who made the bad decisions are well beyond accountability at that point. Since they know this, everyone involved is incentivized to think short-term. Never mind the issues that arise when life expectencies increase well beyond what pension fund planners knew to work with.
The popular workaround for this is a 401k or similar. This isn't ideal by any means. It takes away the defined benefits and the predictability and certainty for pensioners! The main upside is that it also removes the kind of misaligned incentives that can encourage poor decision-making and provides more assurance that something will be there later in life.
You're completely right. Pensions, when done properly, are amazing for everyone! The alternatives kinda suck by comparison. But they're much better than the answer many pension funds have provided.
(Salaries, being compensation for a defined term as well as defined amount, can be terminated, and are also compared to current value provided. And aren't assumed to generally last until employee death.)
It's not tied to the continued life of the company; for the most part, pension benefits are protected in a separate fund. (It's more complicated than that but I am by no means an expert.)
More to the point is that defined benefits, in addition to their other issues, are mostly oriented to long-term employment with a single company. If you move around every 2 or 3 years, you probably wouldn't get much if anything out of traditional defined benefit plans.
Traditional defined benefit pensions are nice in some ways for workers in that they're predictable. I'll even get a small one myself. But, like employer provided healthcare insurance, they're really not a good match for most purposes today.
Especially in a Wall Street environment hyper-focused on 3-6 month results over anything else. It's very hard for companies to plan long term if the only thing the market seems to care about is how they did last quarter of a year. It's an interesting Gordian knot that businesses seem to have tied themselves into where companies still have expectations to exist for multiple generations, but all the performance indicators used to analyze them are so strongly focused on the immediate short term.
Defined benefit plans have large drawbacks (risk to the firm, risk to retirees if the plan fails, etc.), but there is zero evidence they were born of a desire to kick the can down the road. They simply came first (at the time, as far as I'm aware, nobody had even thought of a defined contribution plan, and there would have been no tax reason to have one instead of just paying workers).[0]
Let's debate what works without pretending everyone who disagrees with us has terrible motives. Defined benefit plans provided huge benefits to many workers who have not managed the switch to defined contribution plans well.[1] That does not mean that pensions are sustainable, or even that they are a good idea, but their proponents are not just con-men.
if I get paid 15 bucks an hour as a picker at an amazon warehouse. why wouldn't I be incentivized to actively facilitate shrinkage at that warehouse? fuck the system guys,get paid
I don’t necessarily disagree with many of your points, but I think drawing attention to the end of Sears’ lifecycle is an unfair thing. Someday Amazon too will have an end of life, and employees and shareholders will get fucked over then too.
The article also draws attention to how workers benefited _in good times_ at Sears, not near the end. And this is where the comparison is most meaningful, where Amazon is more questionable.
The difference is that most Amazon employees have defined contribution retirement plans rather than defined benefit pensions. So Amazon is less likely to end up in a death spiral due to unsustainable expenses. And if Amazon does go bankrupt the employees' retirement funds won't be impacted (unless they invested in company stock).
Agreed. I worked at Sears in college (~15 years ago) loading dock/warehouse. It was a great job at the time. Good pay, plenty of hours, and generally good managers. The downfall of Sears had very little to do with wages, but Amazon crushing all brick and mortar stores.
We were dependent on foot traffic, and sales flyers in the Sunday paper - things that don't do much today.
IMHO Sears would have an opportunity now if they hadn't sold off their brands. Cobranding (for instance) Anker products as Craftsman would have me buying it there instead of Amazon for one reason: commingled inventory and fakes.
the mismanagement of the craftsman brand will one day be a case study in all business schools. It is incredible how much I spent on tools with them over the years, and incredible how I'm not even sure where to buy them anymore.
IMO, the biggest mistake Sears ever made was NOT buying Home Depot when they had the chance.
True. Amazon, and ecommerce in general, took off because they beat old retail in prices and inventory. I can buy a pair of shoes right now and have it delivered for free in 12 hours. The margins web stores operate on are razor thin. Efficiency is king.
In the US, pension means defined benefit pension plan, which are under the control of the company, not the pensioners. The people benefiting from the pension don’t have any say (or knowledge) properly funding them or investing the funds, and don’t know if they are being taken for a ride.
In my opinion, 401k with low fee target date funds are probably better all around.
It's not just the few retirees that have a high pension which cause this... It's also the majority of young people not employed in tech getting increasingly shitty wages
Yup, if you're interested in a recent example look at Mellanox vs Starboard capital. We need to break out of the vice-grip Wall Street has on public companies. The Long Term Stock Exchange is one such initiative but I think co-operatives are another way that should be popularized further. Problem is, it becomes really hard to capitalize without Wall Street money.
I think Wall Street would just tell you that you shouldn't have gone public.
There's not going to be a breaking of vice-grips -- sudden and monumental actions -- because the banks would tank the economy just to get political leverage by threatening average Americans' asset values. Then they put the vice grips back on. If you want to do something about that, it's going to take a while.
FWIW capitalism has a lot of things wrong with it in the information age, but if you want to start blowing up major foundations, don't expect the interested parties to take it lying down and give you a fair fight.
Are you saying that the total market value of active investments is 22x that of passive investments? Or are you saying that net returns of active investors are 22x higher than that of passive ones? Or are you saying that the total returns of active management is 22x that of passive returns?
Sears' huge pension liabilities was cited as one of the main reasons that prevented any possible re-structuring that could have saved the company when it was declining and heading to bankruptcy
This was before or after it had been stripped of assets?
> Is not about pleasing shareholders and fucking up employees as this article claims. It's a problem of business viability and long-term expectations.
Perhaps. Or it could be about competing in a marketplace where pleasing shareholders and fucking up employees makes you more competitive. The problem is not that Sears treated its employees well, rather that its competitors are allowed not to.
In many countries, it is illegal to under-fund your pension scheme for a significant length of time which avoids this problem. At any given time you can close the scheme and switch people to DB without a massive liability overhang that you need to close.
Eddie Lampert whined extensively about how hard the pension problem was making things for him. In a sense that is trivially true - extensive liabilities make it harder to run a profitable company - but it wouldn't have been an issue if they had been properly funding their pension liability all-along.
In many countries, it is illegal to under-fund your pension scheme
In the U.K. Gordon Brown made it illegal to over-fund a pension, leading many companies to have to take “contribution holidays” when markets were buoyant. Surprise surprise, when markets went down not only were the plans underfunded, there was no spare cash to make up the shortage. One of the many blunders of the worst Chancellor in living memory.
Technically,the PBGC charges insurance premiums to the pension plans it insured (non taxpayer funded ones). Realistically, ther is no way the PBGC is sufficient to act as a backstop, so it is up to the federal US government to determine how much to pitch in when shit hits the fan.
> It's a problem of business viability and long-term expectations.
Agreed.
But then I am surprised about the whole Wall Street para. People don't like surprises. So a company has to always set expectations correctly, to both employees as well as the markets. If a company is open how the initiative is going to affect revenues there wont be that huge loss of market value.
I agree with you in that that's how things would go nowadays, but maybe we should scrutinize more what Wall Street is contributing to, instead of taking it as "something that happens and there's nothing we can do about it".
Important note: at Sears, different departments fought against each other for years - essentially a dozen of small businesses with the overhead of a large corporation. No way it could have ended well.
> Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. And guess what, they will punish you at much larger magnitude than your declining revenue. So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral. And now your employees will be pissed, and the press will come and write an article claiming that your once frugal company is now a money firepit and that morale is low, completely forgetting their initial narrative on how you used to fuck over your employees.
This, in a nutshell, is why capitalism is fundamentally incompatible with human flourishing. Because of the process you just described, the only possibility is an end state with a very small number of capital holders prospering and grinding the rest under their boot.
This is true; the only way to survive in modern capitalism is to REALLY fuck workers over so much that they can't even survive while working at your company, let alone after they retire. Fuck this economy so damn much.
How about what works well for many European countries? A more progressive taxation scheme (i.e. the opposite of what Trump's done) combined with a more generous social safety net (e.g. public healthcare).
The US is facing wealth inequality right now almost on par with the gilded age, which resulted in serious social upheaval. Other than the gilded age, and especially for a long period in the last century, wealth equality has much better then than it is now. We could go back to that at least, for starters. But ever since Reaganomics we've been seeing more and more wealth accumulating to those who already have it. Democrats get elected and aren't able to make headway against it (or don't try very hard), but when Republicans get elected they make it worse (look at the Bush and Trump tax cuts).
You say, as you post on a website where the average user gets paid 6 figures+, works for a capitalist company (most of which aren't screwing over many workers), and could retire at 35 and live a comfortable life off the money saved up by working in tech.
I think tech workers at Amazon are closer to the Sears workers than fulfillment center folks are.
My friends working at Amazon as tech workers are making money hand over fist right now. 100+ stocks each grant.
On the flipside, Amazon has a "projected total comp" which they keep you at, and if you're over projected, they don't give you more which is fucked. Google gives you 80k in stock and doesn't tie your future say to it.
It's not just Amazon, techies at most tech companies get generous stock grants as there is a considerable talent war going on. Even non major players like Priceline group now give equity.
Yeah I remember Bernie Sanders praised Amazon's decision in a tweet, but only later did people and the media realize that increasing the minimum wage came at a cost to other things, such as stock compensation. no free lunch guys.
Nobody asked for a "free lunch", those people already work very hard for what they get.
So, it's not much "no free lunch", but "I'll do a token gesture of giving you more while taking your money from elsewhere, because I'm a hypocrite greedy bastard".
Amazon realized that they kept getting a black eye because of their wages so of course they pivoted. Now some workers are probably worse off. I blame the media for only caring about sensationalist headlines.
I doubt many are worse off, and of the stories about lost fringe benefits there was a telling lack of details. In reality people got a raise and thought "Why not both?"
However I think Amazon gave raises simply because they needed to recruit and retain. In my area Amazon runs "we're hiring...if you're alive you get a job, no resume no interview" constantly year round, so they clearly have a pressing need. At some point running the ads and constantly hiring is more expensive than just paying a more competitive rate.
Nobody is going to be compensated less. The "extra" compensation they received before was simply a consequence of the fact that Amazon stock quadrupled in the last three years.
So if previously they got $14 + 0.50 in shares their total comp ended up being $16. But they still got paid less than somebody who was paid $15 in cash straight up (who could have then purchased AMZN on the market).
To some extent, maybe. But then again, if you poke a bear with a stick and it mauls you, nobody will blame the bear.
If we expect responsibility for decisions to companies, then it's only fair if media outlets too are held responsible for the consequences of misapplying public pressure.
> if you poke a bear with a stick and it mauls you, nobody will blame the bear
I think that analogy goes against your argument: The bear is a wild animal unable to make rational decisions. Amazon is an extremely powerful company lead by some of the leading businesspeople in the world. The difference between Amazon and the bear is exactly why Amazon is solely responsible for its decisions.
> misapplying
That'a s matter of opinion; IMHO, it was and is not at all misapplied.
If you're making 30k / year, having any kind of equity in lieu of traditional compensation (bonuses, wage increases) is an extremely risky affair. Amazon's stock has increased x6, but that is not normal, nor is it indicative of future performance. For those living paycheck to paycheck, there are far better methods of compensation that will ensure a higher quality of life without huge amounts of risk. An increase of just $1-2 per hour would easily make up the difference.
White collar workers can absorb the risk in the case of a market downturn, but I'm not sure that blue collar workers can.
It would be really nice if EVERYONE not in the 1% got a raise of some sort. An extra 1-2 an hour or whatever...
However then the prices of everything would go up for everyone, just like they are everywhere.
When the 'living wage' 15 USD/whatever minimums are passed don't the prices of everyday living just rise to meet that extra cash in the market?
Meanwhile everyone who was previously making a little above minimum wage, mostly the (lower/mid) middle class, get shafted, because they do not get raises.
This argument comes up every time raising the minimum wage and its just bad math and bad economics.
Around 3% make the federal minimum wage raising the minimum wage to say 10 would barely move the needle as far as the available money supply. If most people have the same amount of money then rational actors aren't going to raise the prices much.
On the other hand a person going from 7 dollars an hour to 10 will have 43% more money in their pocket.
It ought to be intuitively obvious that the benefit to the poor is not related in a linear fashion to prices.
If you were to graph an expected increase in price based on minimum wage they would expected to become close to proportal when an increase in minimum wage was also the average wage.
One can also argue that rising minimum wages directly benefit the economy as this money will be immediatly consumed.
Giving $10 to a poor person will result in $10 more goods and services demand. Giving $10 to a very rich person will probably make 1/10th of a share change hands and have no effect on the real economy whatsoever.
This argument is a fallacy because it implies that money not spent is wasted somehow, but that is opposite of the truth, that savings underpin investment and thus growth.
Considering that the largest economic problem of the last 20 years (well all human history really, but it's been a keystone of economic strife recently) is the dramatic difference in the wealth growth between the wealthy and the wage increases of the remaining population, that whole "trickle down economics" myth has been sorta shorted out.
"Growth" can represent too many things and is thus a great slippery beast that can be used to obscure helping the wider population. We continue to see economic "growth" but wage increases has been stagnant for decades. Owners need fewer workers to amass revenue due to changes in the type economy as well as automation. You can grow a business without benefiting as many people as you used to. Look at how many people Bell Labs had working for it when it was in it's heyday vs how many people work for Google now.
Why does the article keep comparing warehouse workers at Amazon with salespeople at Sears? Those don't seem like comparable positions (sales comp is often very performance based) and thus, compensation wouldn't be the same.
Maybe compare the salespeople at Sears with account managers or some similar position at Amazon?
> “Most of these people retired with a good pension,” said Jon White, who worked at Sears for 38 years, most recently as a manager in a store in Lithonia, Ga., before retiring in 2008. “Most of them are comfortable for the most part — cashiers, clerks, replenishers, all kinds of workers.”
It would have been exceedingly easy for the NY Times to do research to get us some numbers. Instead we get this handwavy quote.
And this statement doesn’t invoke a lot of confidence for me. The article talks about profit-sharing for salespeople, then this quote says “most” retired with a “good” pension. So there were some that didn’t retire with a good pension? Who were they?
And then the quote ends with “most” are “comfortable”. Comfortable is quite different than the prior part about profit-sharing and retiring with the equivalent of a million dollars today.
That quote is just so exceedingly vague it doesn’t answer the question that The NY Times itself poses.
I think for a long time they are going to have a larger number of blue collar workers than white collar. In in an automated future - who will look after and maintain the robots?
Don't forget that they now also own Whole Foods that currently are 'people' heavy.
Quote: While Amazon employees at its Seattle headquarters make an average salary of more than $110,000, according to Glassdoor data cited by the Seattle Times, the paper reported Thursday that the company’s median employee earned just $28,446 last year. That’s because the vast majority of Amazon’s 566,000 employees are not white-collar workers in Seattle but blue-collar workers toiling in the company’s 140 “fulfillment centers” across the country
https://splinternews.com/a-staggering-number-of-amazons-empl...
> They're enot Amazon's main employees, developers are.
According to [0] (page 30), Amazon's median compensation was $28,446. Where's your justification that either "main employees" are way less than half of Amazon's total employees or $30K/year is a normal developer salary.
I don’t know that the NYT has it out for Bezos, but he’s a very easy target. He has a long reputation of treating employees badly while amassing enormous wealth.
>The better question is - why are so many in such a hurry to defend billionaires?
I think it's because the tech industry is positively lousy with deluded persons who see themselves as embryonic billionaires. When you believe your asshole sprays gold coins every time you update a git repo, you tend to overlook that production is arranged under capitalism to have the ownership class expropriate the majority of the value that workers create.
Lets Occam's razor this shit. Is Amazon a megacorp with the ability to throw their weight around and have a large impact on the world? Or are they a little mom-and-pop operation that have wondered into the crosshairs of newsmen conspiring against them because Bozos is the owner of a rival paper? In an era where NYT would like nothing more than to stop the bleeding from papers to online, and migration from NYT to Wapo isn't even on their radar?
Dunno; maybe because its fronted by the world's richest man, treats its workers badly, and has a bunch of sweet deals with the CIA? Or maybe it's because Bezos owns a rival paper.
I think the Times is awful, venal, half tabloid, and generally doesn't go after the powerful enough, but I don't think they look at WaPo as 'rivals.' They're basically the same thing, owned by a different set of oligarchs.
I've noticed that the NYT has it out for anything remotely related to capitalism. Didn't they put out a article a while back about how Jeff Bezos becoming so rich is terrible, and they purposely neglected to mention the millions of Americans that also gained in wealth due to Jeff's actions.
These days the NYT is doing some very biased reporting.
If you read the NYT it is at the very least staunchly moderate on capitalism, if not (in my opinion) a doggedly fierce advocate for it, especially at a time when much of its readership is pushing to the economic left.
During their best years, when Sears was a genre-defining behemoth, workers owned 25% of the company, and a warehouse worker could get the same kind of retirement package a salesman could if they had the seniority.
They build an empire that lasted over a century, and flourished.
Sears' downturn didn't come until two decades after they phased out worker-friendly policies like profit sharing, and their decline was based on poor strategic decisions, not the profit-sharing that had existed decades earlier.
In other words, being excellent to their employees worked out great for Sears.
The sears salesmen directly drove revenue. He was being incentivized to increase revenue. The warehouse worker is not directly driving revenue at Amazon. The developers do...and they are being incentived to keep doing so.
According to the article, it would appear this was not limited to salespeople:
“Most of these people retired with a good pension,” said Jon White, who worked at Sears for 38 years, most recently as a manager in a store in Lithonia, Ga., before retiring in 2008. “Most of them are comfortable for the most part — cashiers, clerks, replenishers, all kinds of workers.”
I would assume that "replenishers" are directly analogous to current Amazon warehouse employees.
Exactly this. It's staggering how intellectually dishonest this piece is. I don't understand what is happening at the NYT, but this and other pieces like it lately are representative of just awful journalistic standards.
I joined Amazon as an SDE 1 in early 2015. I was promoted to an SDE 2 in q4 2016. I just was promoted this year to SDE 3.
Hard work, navigating to the right projects, and managing both upwards and down... senior and junior people on my part... I feel a bit ripped off. I'm not sure I would have wanted to get promoted knowing where my comp now falls.
The thing I'm unhappy about is that my target comp isn't actually that much more than where it already was as an SDE 2.
Without going into specific numbers, what Amazon does is if the stock value goes up, you only reap the benefits insofar as your existing grants are worth more. That means if you're above the target comp they assigned you, then you get no additional stock.
My job role as an SDE 3 has changed. I have more responsibilities and the influence I built as an SDE 2 has solidified. It's not easy by any means.
I'm going to just a bit longer as there is some initial vest that's wrapping up early next year... and then I go somewhere else.
My total comp this year is upwards of $250k because of the stock appreciation, but basically I got shafted with the promo raise. My salary and total comp didn't increase. I'm just reaping a higher stock price of vested shares.
Edit
In response to the article
>A warehouse worker hired now at Amazon who stays until retirement would leave with a fraction of that.
A buddy of mine works at the NYT in a tech role. NYT isn't doing anything different than Amazon. It takes a lot of nerve to write these kinds of articles... Hypocrisy at its finest.
First, back up a second and appreciate your position. You were an SDE 1 in 2015, and you're an SDE 3 now. You're making over a quarter million a year. Your career is on a rocket trajectory. Most SDEs don't ever even make it to 3.
Should you leave? Yeah, probably, but only because that's my general advise to most Amazon SDEs. Many (but certainly not all) of the teams there are not super fun to work for. Odds are you'd be happier at any given alternative. Maybe your team's great, but you seem pretty unsatisfied, so yeah, leave.
Should you leave because of the money? Probably not, no. You're at the bottom of a new pay grade. You'll probably be making more over the next couple of years, and if you're on track to Principal, whoo boy is there money there. On the other hand, they say a recent promotion is a great time to quit. Go interview with Facebook or whoever and see if they'll pay more for an Amazon SDE 3 than Amazon will. Who knows, maybe they'll even buy you your unvested shares.
Generally, every American who makes less money than they deserve, has two choices:
(1) Find a way to make more money.
(2) Appeal to the sense of fairness to get sympathy from the community.
Sadly, according to US federal law (4 U.S.C. §§ 888), anyone who earned a total compensation in excess of 7 times national average individual median income, loses the right to option (2). Any attempt to exercise it will result in penalties such as heavy downvoting and ridicule on social media.
If not for these harsh legal restrictions, I would have offered you my very sincere sympathy and words of support.
The good news is that with your fast career progression at Amazon, and willingness to work hard, you will likely significantly increase your compensation when you enter the job market again.
I refuse all kinds of gifts, except for information and knowledge material, from anyone except my immediate family. I also do not gift anyone who may have a business or personal relationship with me now or any time in the future.
Curious about how many hours you would say you work each week? Or how many total hours per year? A normal 40 hours per week is usually seen as about 2000 hours per year.
No worries! Just wanted to note for anyone else that comes across this that mother’s also go unpaid for leave in the US. Sad state of affairs. I just got back from South America and folks were shocked when we talked about US labor laws.
And now that Sears is bankrupt, their pension fund is going into default and passed to the government who will need to fulfill those obligations (thankfully the pension benefit guaranty is not funded with tax revenues).
Of course, I'm not blaming Sears retirees. They deserve their pensions as much as any other person. But the reality is that corporate America learned this lesson a while ago and Sears is just one of many examples.
Is not about pleasing shareholders and fucking up employees as this article claims. It's a problem of business viability and long-term expectations.
Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. And guess what, they will punish you at much larger magnitude than your declining revenue. So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral. And now your employees will be pissed, and the press will come and write an article claiming that your once frugal company is now a money firepit and that morale is low, completely forgetting their initial narrative on how you used to fuck over your employees.