The retirement savings accumulated by just 100 chief executives are equal to the entire retirement accounts of 41 percent of U.S. families -- or more than 116 million people, a new study finds.
In a report scheduled for release today, the Center for Effective Government and Institute for Policy Studies found that the 100 largest chief executive retirement funds are worth an average of about $49.3 million per executive, or a combined $4.9 billion. David C. Novak, the recently departed chief executive officer of Yum! Brands Inc., is at the top of the list, with total retirement savings of $234.2 million.
In recent years, pay and income inequality across different income groups have received increasing attention in the U.S. Significantly less attention has been focused on the growing gulf in retirement savings, a lack of focus that the study’s authors say they are attempting to address.
“This CEO-to-worker retirement gap is a lot bigger than the pay gap and one more indicator of the extreme level of inequality that is really tearing the country apart,” said Sarah Anderson, the report’s co-author and the global economy project director at the Institute for Policy Studies.
Some of the chief executives with the biggest retirement stashes are at companies that have cut retirement benefits for new employees.
Leucadia National
Leucadia National Corp., the holding company that owns investment banking firm Jefferies Group Inc., last year cut by half its matching 401(k) contributions for employees hired after January 2014. Those hired prior to that date receive a match of as much as 3 percent of employees’ income; new employees get a match of up to 1.5 percent. Leucadia CEO Richard B. Handler ranked second on the list of biggest retirement assets among executives, with $201.3 million. Except for a $219,739 pension benefit, all of the assets are deferred compensation.
“Mr. Handler does not have a retirement package, golden parachute, or even an employment contract," said Richard Khaleel, a Leucadia spokesman. “Mr. Handler has voluntarily deferred most of his cumulative compensation over the past 25 years and kept the vast majority of that deferred compensation invested alongside shareholders of Jefferies and, now, Leucadia, in those companies’ common shares. With the exception of charitable donations and tax-payment sales, Mr. Handler has never sold a share of Jefferies or Leucadia."
Yum Brands, which owns KFC, Taco Bell and Pizza Hut, used to offer pensions to most workers but eliminated that option for employees who joined after 2002, replacing it with 401(k) plans.
Novak’s deferred compensation “was directly linked to the performance of the company and primarily consists of bonuses he earned and deferred into YUM stock, which appreciated 900 percent during his leadership,” said Jonathan Blum, the company’s chief public affairs officer. “He chose to defer the majority of his compensation in YUM stock as he believes in the long-term growth of the company.”