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    Highlights for week ending February 1, 2003
  • Janet Krueger has submitted a shareholder resolution proposing "that IBM's Board of Directors establish a policy and practice of fully disclosing in a single section of the Company's annual report all forms of compensation issued to Company executives. This should include, but not be limited to, salary, bonuses in all forms, loans, deferred compensation schemes such as 401k, EDSP and the IBM Savings Plan, stock options, life insurance, retirement benefits and any other executive perks that constitute a significant current or future liability for shareholders."

  • Washington Alliance of Technology Workers (WashTech): The Great Tech Job Exodus. Excerpts: "Forrester predicts that successful CIOs will aspire to become chief operating officers. The study notes, 'IT execs who successfully manage the offshoring of their technology operations will make the case that they can tackle outsourcing of other corporate operations.' It adds, 'Executive stature will be measured by the size of the outsourcing contracts that they manage, not the number of employees.'" ... "Research firm Gartner Inc. warns that U.S. companies could soon see a worker backlash. Employees are being pressed to work endless hours, while facing threats that their jobs may be moved overseas, notes research director Diane Morello. 'My best advice is for IT workers to organize,' Bernstein says. 'What tech workers lack is bargaining power that protects them from overseas competition.'" ... "In 2001, nearly 700,000 IT job cuts in the U.S. were announced, more than a third of total payroll reductions proposed by U.S. firms, according to Challenger, Gray & Christmas Inc. In 2002, proposed reductions in IT jobs were 33 percent of overall announced job reductions."
    • Thinking about India. View info from the offshoring presentation given to Microsoft employees by Windows Division chief Brian Valentine. (Microsoft PowerPoint presentation).
    • Take Action! Tell your elected officials it is imperative that the U.S. Congress launch an immediate study of the IT offshoring trend. Excerpt: ""Even if you've managed to make it through the tech implosion without losing your job, the next body blow may be just around the corner. It is increasingly likely that the job you have now may not even exist in this country in the very near future. Recent reports indicate that U.S. employers will move about 3.3 million white-collar service jobs and $136 billion in wages overseas in the next 15 years. IT giants such as Microsoft, HP and IBM are leading the way."

  • San Jose Mercury News: Labor group protests offshore tech hiring. Excerpt: "Courtney cited industry reports that U.S. companies will move about 3.3 million white-collar service jobs and $136 billion in wages overseas in the next 15 years. 'IT giants such as Microsoft, HP and IBM are leading the way,' he said. Bruce Frager of Los Gatos thinks such grass-roots campaigns are necessary on a national level. Frager said his son, a software engineer in the valley, lost his job in October when his employer told him he was being replaced by 10 engineers in Russia for half the cost."

  • Business Week Cover Story: The New Global Job Shift. The next round of globalization is sending upscale jobs offshore. They include basic research, chip design, engineering--even financial analysis. Can America lose these jobs and still prosper? Who wins? Who loses? Excerpt: "Corporate downsizings, of course, are part of the ebb and flow of business. These layoffs, though, aren't just happening because demand has dried up. Ex-BofA managers and contractors say one-third of those jobs are headed to India, where work that costs $100 an hour in the U.S. gets done for $20. Many former BofA workers are returning to college to learn new software skills. Some are getting real estate licenses. BofA acknowledges it will outsource up to 1,100 jobs to Indian companies this year, but it insists not all India-bound jobs are leading to layoffs." If link is broken, view Adobe Acrobat version [PDF--39 KB].


  • Business Week: Perilous Currents in the Offshore Shift. Companies now desperate to cut costs by sending skilled, high-paying jobs overseas often don't understand what they're really doing.


  • WashTech: IT outsourcing trends underscore the need to take action.


  • New York Times: After 10 Years, Corporate Oversight Is Still Dismal. Excerpt: "Yet 10 years later, it looks very much as if the corporate governance revolution of 1993 is back at Square 1. Boards are quicker to punish incompetence — but no more apt to spot criminality. They will howl when quarterly numbers are depressed, yet shut their eyes when the numbers are squishy or even fraudulent. They will use stock grants and options to align management's interest with that of shareholders, yet ignore the temptation the options create for management to drive up stock prices with false promises, take the money and run." ... "Shareholders were lulled into believing that the growing use of stock options as part of executive pay would align management's interest with theirs; instead, it tempted executives to push up share prices with accounting tricks. 'One of the great drivers of the scandals we've seen in the last few years was executives trying to preserve paper wealth,' said Warren L. Batts, an adjunct professor at the University of Chicago Graduate School of Business."


  • The Labor Educator: A Bleak Outlook Faces Workers Who Will Soon Reach Retirement Age.


  • InternalMemos.com: IBM Compensation Programs for 2003, internal memo from Steve Mills, Office of the Senior Vice President & Group Executive, Software, to the "U.S. Software Group Team.
  • "

  • InternalMemos.com: IBM Canada: Compensation for 2003, internal memo from Ed Kilroy, General Manager, IBM Canada, to "All IBM Canada Employees."


  • The ERISA Industry Committee (ERIC) (whose slogan is "Representing the Employee Benefits Interests of America’s Largest Employers") sent a letter to U.S. Senators advocating against Senator Harkin's amendment prohibiting implementation of proposed regulations regulations by the Treasury Department that would make cash balance plans legal. Read their letter [PDF--16.7 KB].


  • Committee on Education and the Workforce (Democratic Staff, U.S. House of Representatives): Employer Cash Balance Statements: Fact and Fiction. Editor's note: It's interesting to compare this fact sheet with that in the ERISA letter above.


  • Committee on Education and the Workforce: Over 200 members of Congress Urge President Bush to Protect Pensions of Older Employees. Excerpt: "Reflecting a deep and growing concern about Americans’ retirement security, more than 200 bipartisan members of the House and Senate wrote to President Bush Thursday calling on him to withdraw proposed regulations that, if allowed to go into effect, would permit companies to cut long-time employees’ pensions by as much as 50 percent."


  • Committee on Education and the Workforce: Former corporate managers from IBM, AT&T and Verizon speak about cash balance plans. Excerpt: "Over the last decade, many thousands of older employees in this country, from over 300 large corporations, have lost significant portions of their promised pensions through these cash balance conversions. Over 800 age discrimination charges have been filed at the EEOC and are still open. Multiple lawsuits have been filed in federal courts -- a lawsuit filed against IBM in 1999 now has 140,000 certified class members.

    Against this backdrop of lost pensions and angry older workers, the Treasury has decided to come riding to the rescue on their white horse. But wait! They aren't protecting older workers. They aren't even admitting age discrimination has occurred. Instead, they've decided to wipe the books clean by legalizing all of the corporate thefts that have occurred since January 1, 1988. Not only are they changing ERISA law by removing worker protections in order to legalize cash balance plans, they are attempting to do so RETROACTIVELY."

  • St. Louis Post-Dispatch: Longtime employees are eying Treasury's new pension rules. Excerpt: "To many, it may have looked like little more than congressional politicking last week as Democratic Sens. Dick Durbin of Illinois and Tom Harkin of Iowa temporarily held up the confirmation of John Snow as Treasury secretary. But in Bethalto, Ill., longtime IBM employee Kathi Cooper viewed it as one more step in her personal battle to protect her pension - and those of older workers across the nation. 'I can't get in enough people's faces to make people understand,' said Cooper, 52, who is starting her 25th year as an IBM employee and her fourth year as lead plaintiff in a lawsuit against the technology giant's conversion to new pension plans in the 1990s. That type of switch - from a traditional plan to what's known as a 'cash-balance plan' - sparked so many age-discrimination complaints that the IRS stopped approving them in 1999. But the Treasury Department, home to the IRS, recently proposed new rules that, once final, would allow such conversions to begin anew. 'If those Treasury regs go through, the raping and pillaging of pension trusts - taking from the old and giving to the young - will take place among 23 million baby boomers' Cooper said."


  • Fast Company: Are We Out of Options? They were the currency of the American dream. Now they are worthless paper -- a symbol of CEO greed. What went wrong with stock options? Excerpt: "What's the simple explanation of what went wrong with options? Too many options went to too few people. Our calculations show that the top five executives at the 1,500 largest U.S. companies got $18.3 billion in stock-option profits in 2000, up more than fivefold from the early 1990s. Over the course of the decade, those executives made a collective $58 billion. Today, CEOs and a thin layer of executives in corporate America own a total of 12 billion options, giving them control over about 11% of all outstanding public shares. They hijacked what could be one of the most important innovations in decades."


  • AARP: Statement by AARP Federal Affairs Director David Certner in Opposition to Proposed Treasury Department Regulations on Cash Balance Pension Plans. Excerpt: "AARP joins the more than 200 Members of the House and Senate in urging the President to withdraw the Treasury Department's proposals for cash balance pension plans. If enacted, these regulations would undermine the retirement security of millions of midlife and older workers."
     
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