The country's largesst department store chain, Sears, Roebuck and Co., intends
to phase out its pension plan, eliminate most stock options, and reduce bonuses.
The object, according to Bloomberg News, is to make Sears more competitive with
Wal-Mart Stores Inc. and other discount retailers, which tend to offer less-costly
benefits to their employees.
Bloomberg says the move includes:
- Shifting workers under the age of 40 to self-financed 401(k) plans.
- Dropping stock option grants for salaried employees, except for directors
and vice presidents.
- Raising pay for about 20 percent of the company's 135,000 hourly workers.
Sears also plans to end healthcare-coverage subsidies for future retirees,
according to Bloomberg. Instead, they will have the option of purchasing coverage
through Sears' group plan when they retire. The company intends to limit health
care plan subsidies at this year's levels for future retirees who are now age
40 or older.
The changes were announced Tuesday to the Chicago-based retailer's 225,000
"Our mission is to grow this business, and to do that we need to make
sure we are providing pay and benefits that are in line with what our employees
want and what our customers are willing to pay for," Sears spokesman Chris
Brathwaite told Bloomberg. He said the adjustments will not change Sears' pay
and benefit costs in the short-term.
Sears Chief Executive Officer Alan J. Lacy, who is cutting expenses while spending
more to remodel stores and add clothing brands such as Lands' End to win back
shoppers, received $2.8 million in salary and bonuses in 2002--78 percent
more than he got the year before. He and most other top Sears executives didn't
receive stock options in 2002, the latest period for which figures are available,
according to Bloomberg..
Bloomberg News, via the Baltimore Sun