Chief executive officers of the nation’s largest companies can look forward to a very comfortable retirement while most working Americans have little or no savings for their old age. The 100 largest retirement funds of CEOs are worth a total of $4.9 billion, or equal to the entire retirement savings of 41% of America's families, according to a new report released this week by the Center for Effective Government and the Institute for Policy Studies.
David Novak, the CEO of Yum Brands until this year when he became executive chairman, has the largest retirement nest egg among Fortune 500 companies—a whopping $234 million, according to the A Tale of Two Retirements report. In the meanwhile, hundreds of thousands of fast-food workers at the company’s Taco Bell, Pizza Hut and KFC business units have no company-sponsored retirement plans.
Other CEOs with the largest retirement packages include Richard Handler of Leucadia National who has $201.3 million in retirement assets and David Cote of Honeywell with a $168.4 million nest egg.
The report highlights yet another troubling aspect of the growing income inequality between the top 1% and the rest of Americans. The lavish retirement packages of executives spur greater retirement insecurity for working families because tax rules give preferential benefits to executives. Current rules also encourage companies to slash employee benefits as a way of boosting profits and stock prices. Since more than half of executive pay is linked to the company’s stock price, every dollar not spent on employee retirement benefits means more money for CEOs, the report notes.