In the wake of his controversial comments that partially blamed two pregnant employees for a cutback in company benefits, AOL’s CEO Tim Armstrong has quietly restored full retirement benefits to his employees after the public backlash became too large to ignore.
In an internal e-mail to employees, he wrote: “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.”
He added, “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.”
Last week, Armstrong broke the news to employees that he was scaling back 401K contributions, blaming the move on costs associated with Obamacare and “distressed babies.”
“We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were okay in general, And those are the things that add up into our benefits cost,” Armstrong said in the meeting. “So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan.”
The comments set off a media firestorm. And soon enough, one of the mothers of the “distressed babies” decided to speak out in a very public way.
Writing in Slate, Deanna Fei (whose husband is an editor at AOL) spoke about how Armstrong’s words hurt her.
“We experienced exactly the kind of unforeseeable, unpreventable medical crisis that any health plan is supposed to cover,” wrote Fei. “Isn’t that the whole point of health insurance?”
[box type=”shadow”]“I take issue with how he reduced my daughter to a ‘distressed baby’ who cost the company too much money,” Fei wrote. “How he blamed the saving of her life for his decision to scale back employee benefits. How he exposed the most searing experience of our lives, one that my husband and I still struggle to discuss with anyone but each other, for no other purpose than an absurd justification for corporate cost-cutting.”[/box]
Fei went on to point out that Armstrong’s comments weren’t just insensitive, they were loaded with judgment and resentment:
[box type=”shadow”]Let’s set aside the fact that Armstrong—who took home $12 million in pay in 2012—felt the need to announce a cut in employee benefits on the very day that he touted the best quarterly earnings in years. For me and my husband—who have been genuinely grateful for AOL’s benefits, which are actually quite generous—the hardest thing to bear has been the whiff of judgment in Armstrong’s statement, as if we selfishly gobbled up an obscenely large slice of the collective health care pie.
Yes, we had a preemie in intensive care. This was certainly not our intention. While he’s at it, why not call out the women who got cancer? The parents of kids with asthma? These rank among the nation’s most expensive medical conditions. Would anyone dare to single out these people for simply availing themselves of their health benefits?[/box]