Facing criticism, AOL chief reverses change to 401(k) plan

CEO Tim Armstrong had to make  an apology.
CEO Tim Armstrong had to make an apology.

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Tim Armstrong, chief executive of AOL, did an about-face Saturday, reversing an unpopular change in the media company’s employee benefits program and apologizing for publicly singling out two families’ health care issues as a cause of those changes.

AOL had recently altered its 401(k) program, switching its matching payments to one lump sum at year’s end instead of throughout the year. The change would have disadvantaged AOL employees, especially those who left the company before Dec. 31. On an internal call last Thursday discussing the new policy, he had attributed the change partly to soaring medical costs associated with two families’ “distressed babies.”

In an e-mail to employees late Saturday, Armstrong announced the company’s reversal.

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