After ‘Distressed Babies’ Crack, AOL Chief Backtracks

Tim Armstrong changes his mind on pension plan changes

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David Paul Morris / Bloomberg / Getty Images

AOL CEO Tim Armstrong.

AOL chief executive Tim Armstrong has apologized for singling out the “distressed babies” of two employees, and has reversed course on a controversial company 401(k) plan that many employees opposed.

Armstrong singled out the medical issues suffered by two employees’ children as examples when discussing AOL’s increased medical costs last week, reports the New York Times. “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 O.K., in general,” he said on Thursday.

“I made a mistake,” Armstrong wrote in a note to employees on Saturday. “I apologize for my comments last week at the town hall when I mentioned specific health care examples in trying to explain our decision-making process around our employee benefit programs.”

But it wasn’t just the “babies” comment that had Armstrong in hot water: AOL also recently made an unpopular adjustment to its 401(k) program, changing the payments to one year-end lump sum rather than throughout the year, disadvantaging many employees.

But Armstrong reversed the unpopular 401(k) policy change along with his mea culpa.

“We heard you on this topic,” he wrote. “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.”



In 1998 AOL was CEOd by Steve Case, and his brother Dan was MY CEO client for a consulting project cleaning up account rclassification for IPO allocations. Dan definitely heard me loud and clear speaking to my volunteering with distressed babies at the SFGH. And he also heard me unmistakably speaking to breaking  Trading with the Enemy violations pending my approval from Legal . Too bad that Case doesn't have anyone on staff with the heart to spin their volunteer work to help the firm's image. I know from experience that scarce resources when it comes to retracting bonuses and messing with 401K contributions will turn staff from bad to worse. Frankly, the only save I see on this is to pay up. and up. And offer thosse distressed mothers of distressed babies a reason to see humanity where there appears to be none whatsoever.