Anheuser-Busch Cos. will change the way it calculates lump-sum pension
payouts that will mean a reduction in payouts of about 5 percent to 6 percent in
2009 and about 15 percent by 2012, according to an internal memo addressed to
salaried employees from Tim Farrell, vice president of corporate human
resources. The change will affect only salaried employees.
Effective January 1, interest rates tied to corporate bonds will be used to
calculate the lump-sum pension payouts and certain annuity payout options,
according to the memo. The company had used the average of the 30-year U.S.
Treasury bond rates for the months of August and September to determine the
payouts.
“Even with these changes, Anheuser-Busch will continue to offer a very fair
plan, with retirement benefits above the 75th percentile of our corporate
peers,” Farrell said in the memo.
The memo also lays out an early retirement program that is not tied to the
lump-sum payout change and says the company will reduce its long-term incentive
program, which includes stock options and restricted stock, by 20 percent to 40
percent.
Anheuser-Busch is trying to prevent a takeover by Belgium-based InBev. It
plans to reduce costs in an effort to try to convince investors that InBev’s
offer is too low.
Anheuser-Busch on June 11 received an unsolicited, nonbinding proposal from
InBev to acquire all the outstanding shares of Anheuser-Busch for $65 per share,
or $46.35 billion, in cash. The stock closed at $62.21 on Monday, June 30, on
the New York Stock Exchange.
Filed by Pensions & Investments, a sister publication of Workforce
Management. To comment, e-mail editors@workforce.com.
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