The Pay Gap Will Ensure That CEOs Enjoy Luxurious Retirement While Workers Keep Struggling
The pay gap between what CEOs make and what they pay their workers is pretty well known. A new report released on Wednesday illuminates a different gap: that between what CEOs have stashed away for retirement and what their workers have been able to amass.
The report from the Center for Effective Government and the Institute for Policy Studies looks at the retirement accounts among CEOs at Fortune 500 companies and finds that on average they have $49.3 million saved. By contrast, Americans have just $2,500 saved at the median.
The 100 CEOs with the largest retirement accounts collectively have $4.9 billion put away, equivalent to the entire retirement savings accounts of 41 percent of American families, or more than 116 million people.
One example is YUM Brands, which owns fast food chains Taco Bell, KFC, and Pizza Hut. David Novak, current executive chairman and former CEO, has the biggest nest egg among all of the CEOs examined at $234 million, which guarantees him a monthly check in his golden years of $1.3 million. The average YUM Brand employee, on the other hand, has just $70,167 stashed away, which amounts to just $395 a month in retirement.
CREDIT: Dylan Petrohilos/ThinkProgress
CEOs benefit from something else. The report notes that just 18 percent of workers in the private sector were given a defined-benefit pension, which guarantees a certain amount paid out each month in retirement, a share that has fallen from 35 percent in the 1990s. Yet half of the CEOs at the country’s largest companies get a pension.
Instead, the trend for employees has been to move toward 401(k) accounts which depend on stock market performance for how much they’ll be worth come retirement and also rely on individual workers’ investment decisions. The average person age 65 or older gets less than $1,000 a year from a 401(k) or Individual Retirement Account, compared to nearly $6,000 from pensions.
The CEO-to-worker retirement gap mirrors the trend broadly for retirement accounts: a family in the wealthiest 10 percent of American society has nearly 100 times more retirement savings stored up than someone in the middle.
