Originally published in the November 2015 issue of Too Much, the Institute for Policy
Studies newsletter on excess and inequality. Subscribe at www.toomuchonline.org.
Expected monthly retirement
check for David Hote, CEO,
Honeywell, one of nation’s 50
largest federal contractors
Annual earnings that American workers under age 50 can defer
from taxes into a 401(k) retirement account: just $18,000.
Annual earnings that CEOs can defer: no limit.
On August 5, the Securities and
Exchange Commission adopted
new federal regulations that
require publicly traded U.S.
corporations to start annually
disclosing the ratio between
their CEO and median — most
typical — worker pay.
Corporate America had spent
the previous five years
lobbying fiercely to kill this
*A large proportion of Yum workers have no retirement program at all.
“The CEO-worker retirement divide has turned
our country's already extreme income divide into
an even wider economic chasm.”
Sarah Anderson, co-author, A Tale of Two Retirements
Sources: Sarah Anderson and Scott Klinger, A Tale of Two Retirements, Center for
Effective Government and Institute for Policy Studies, October 2015. Shuttlestock.
How to retire on $277,686 per month
Easy. Just become a CEO
at a major American corporation.
America’s 100 most plush CEO retirement nesteggs
now total $4.9 billion, enough to hand those top 100 CEOs
an average monthly check of a quarter of a million dollars for the rest of their lives.
How have America’s chief execs amassed such huge retirement
windfalls? Having rules rigged their way helps, quite a bit.
Total deferred savings for Yum Brands
CEO David Novak, as of start of 2015
Total deferred savings of average Yum Brands
(Taco Bell, Pizza Hut, KFC) worker with 401(k)
American workers have to depend on 401(k)s because corporate execs have
been eliminating traditional “defined benefit” pensions that guarantee
workers a specific monthly sum based on years of service and earnings.
% of private-sector workers in defined benefit plans
Drug giant McKesson closed its pension plan to new hires in 1996.
McKesson CEO John Hammergren now holds a retirement account
large enough to guarantee him a $819,243 monthly check for life.
The most unforgivable
aspect of our current
top-heavy distribution of
retirement benefits? Our
tax dollars actually
subsidize it, in part
through the contracting
different levels of
government do with the
Our tax dollars at work