Troubled Random House Freezes Pension Benefits; Continues to Match 401K Contributions
Celebs are getting paid million dollar advances on books that will likely never sell out their advance, but Random House has decided to freeze the pensions of current employees and totally eliminate pension for future hires. The current employees' pensions will no longer grow, however, the existing 401K matching plan of up to 6 percent will be maintained. Simone & Schuster CEO Carolyn Reidy suggested part of the problem is that people were buying fewer titles.
"What I think is happening is that you would have somebody who would go into a store and buy a front list title, and then … buy a second book. And now they aren't buying that second book," says Simon & Schuster CEO Carolyn Reidy.