AOL CEO Tim Armstrong has done a 180 and will not be changing the company’s 401(k) employer match policy after all.
The policy change caused an uproar, and apparently Armstrong “got mail” from a lot of unhappy employees.
On Thursday, Armstrong announced that AOL would make its 401(k) employer contribution on December 31 in an annual lump sum rather than parceling it out during each pay period as most, but not all, companies do. That meant that any employee who quit, got fired, or was laid off before the end of the year would forfeit the employer match. Moreover, all employees would lose out on the opportunity to see their retirement account grow over the course of the year through compounding of those additional funds.
At the time, Armstrong said AOL had to make changes because Obamacare-compliant health insurance was costing the company an additional $7 million, which he did not want to pass along to employees. He added during a conference call/town hall with the AOL workforce that the company had to pay out an additional $2 million in health benefits because of the difficult pregnancies of two workers who had in his terminology “distressed babies.”
…The leadership team and I listened to your feedback over the last week. We heard you on this topic. And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution. The Human Resource team will be in contact with all employees over the next week to explain the change and to answer any other benefits related questions you might have. We are proud to provide AOLers with a robust benefits offering that spans from exceptional healthcare coverage to 401K’s to AOL fitness programs and beyond. On a personal note, I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific healthcare examples in trying to explain our decision making process around our employee benefit programs.”
Tim Armstrong earned $12 million in fiscal year 2012, which included various bonuses and incentives.
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