100 US CEO Have Greater Retirement Assets That 116 Million Americans

With another year of QE almost in the history books, we were looking for some great examples of how wealth disparity in the US between the pinnacle of the “wealth pyramid”, shown below and everyone else.

We got it thanks to a study by the Center for Effective Government and Institute for Policy Studies called “A Tale of Two Retirements“, which found that company-sponsored retirement assets of just 100 CEOs are equal to those of more than 40 percent of American families, roughly 50 million families or 116 million people.

Here are the findings which indicate a wealth divide so wide it could make Marie Antoinette blush:

  • The 100 largest CEO retirement funds are worth a combined $4.9 billion. That’s equal to the entire retirement account savings of 41 percent of American families – more than 50 million families and more than 116 million people.
  • On average, the CEOs’ nest eggs are worth more than $49.3 million, enough to generate a $277,686 monthly retirement check for the rest of their lives.
  • David Novak of YUM Brands had the largest retirement nest egg in the Fortune 500 in 2014, with $234 million, while hundreds of thousands of his Taco Bell, Pizza Hut, and KFC employees have no company retirement assets whatsoever. Novak transitioned from CEO to Executive Chairman in 2015.

The rich are not only richer, they are also legally allowed to pay far less taxes than most mere mortals: Fortune 500 CEOs have $3.2 billion in special tax-deferred compensation accounts that are exempt from the annual contribution limits imposed on ordinary 401(k)s.

  • Fortune 500 CEOs saved $78 million on their 2014 tax bills by putting $197 million more in these tax-deferred accounts than they could have if they were subject to the same rules as other workers. These special accounts grow tax-free until the executives retire and begin to withdraw the funds.
  • The Fortune 500 CEOs had more in their company-sponsored deferred compensation accounts than 53.8 percent of American families had in their deferred compensation accounts.
  • Glenn Renwick, CEO of The Progressive Corporation, transferred $26.2 million of his pay into his deferred compensation account last year, the most of any Fortune 500 CEO. That reduced his income tax bill by more than $10 million in 2014.

Remember that not only their year-end comp, but much of their retirement funds, are linked to stock performance thresholds, so the CEOs are explicitly motivated to boost their stock price. This means engaging in countless stock buybacks. However, when the debt spigot is put on hiatus and cash in must equal cash out, it means firing thousands workers. And if not firing, then merely reducing defined benefit plans should suffice.

  • Last year 18 percent of private sector workers were covered by a defined benefit pension, which guarantees monthly payments, down from 35 percent in the early 1990s. In contrast, 52 percent of Fortune 500 CEOs are covered by a company-sponsored pension.
  • Nearly half of all working age Americans have no access to any retirement plan at work. The median balance in a 401(k) plan at the end of 2013 was $18,433, enough to generate a monthly retirement check of $104.
  • Of workers aged 50-64, 29 percent have no defined benefit pension or retirement savings in a 401(k) or IRA. These workers will be wholly dependent on Social Security, which pays an average benefit of $1,223 per month.

It gets worse, and more tragic at the same time, because according to BlackRock, Americans and especially Millenials just have too much cash. No really, this is what Blackrock said:

While Americans said that they ideally should have 33% of their net worth in cash instruments, they admit to holding 65%–far too high an allocation to achieve their retirement goals, given low interest rates and the diminishing purchasing power of their cash related to the pressures of inflation. The current asset allocation of American portfolios according to the survey includes 65% in cash, 18% in equities, 6% in bonds, 4% in property, 2% in alternatives, 5% listed as “other.”

Well, perhaps Americans are simply not looking forward to buying what Wall Street and central banks have to sell just ahead of the ritual rug pulling that wipes out 50% of the market every few years. And then there is the question of just how much cash said Millennials have.

Here it the problem according to the Two Retirements report:

Younger Americans face a particularly difficult time saving for retirement. More than half of millennials have not yet begun to save for retirement, as they lack access to good jobs, and have staggering amounts of student loan debt. Americans under 40 today have saved 7 percent less for retirement than people in that age group were able to save in 1983.

So sorry Blackrock, but your feeble mind games will not work on us, even though we realize you would love for everyone to buy your flash-crashy ETFs. The reality is that Americans simply do not have any leftover funds, period, which to fund a retirement, be it invested in cash or BlackRock triple inverse ETFs.

CEOs, however, have nothing to worry about. Not only do they have Congress in their back pocket, they also get preferred treatment by the IRS.

On top of their massive annual compensation, CEOs of most large U.S. corporations have amassed gilded retirement fortunes.We analyzed SEC filings of publicly held Fortune 500 firms and found that the 100 largest CEO nest eggs were worth a combined $4.9 billion at the end of 2014. That sum is equal to the entire retirement account savings of 41 percent of American families (50 million families in total).
While the guaranteed monthly retirement check until death is a thing of the past for the vast majority of Americans, more than half of Fortune 500 CEOs receive company-sponsored pension plans. Their firms are allowed to deduct the cost of these often exorbitant plans from their taxes, even if they have cut worker pensions or never offered them at all.
Nearly three-quarters (73 percent) of Fortune 500 firms also have set up special tax-deferred compensation accounts for their executives. These are similar to the 401(k) plans that some Americans receive through their employers. But ordinary workers face strict limits on how much pre-tax income they can invest each year in these plans, while top executives do not. These privileged few are free to shelter unlimited amounts of compensation in these special pots, where their money can grow, tax-free, until they retire and start spending it.
The CEO-worker retirement divide turns our country’s already extreme income divide into an even wider economic chasm. New analysis by the Government Accountability Office shows that 29 percent of workers approaching retirement (aged 50-65) have neither a pension nor retirement savings in a 401(k) or Individual Retirement Account (IRA). According to a study by the Schwartz Center for Economic Policy Research at the New School, 55 percent of those aged 50-64 will be forced to rely almost solely on Social Security (which averages $1,233 a month).

And so on.

And because we know that readers are mostly interessted in names, here is a selection.

First, the 10 Largest CEO Retirement Funds

Second, the 10 Largest CEO Deferred Compensation Accounts.

A quick primer on these:

In 2014, 198 Fortune 500 CEOs invested a combined $197 million more of their pre-tax income in these plans than they would have been able to invest if they’d been subject to the maximum $24,000 cap that applies to ordinary workers. If they had been subject to this limit, they would’ve owed the U.S. Treasury $78 million more in income taxes last year.
The funds in these special tax-deferred accounts grow tax-free for the rest of the executives’ lives or until they are withdrawn. At that point, the executives make a one-time tax payment at an ordinary income rate. The Joint Committee on Taxation has produced a useful analysis of the financial benefits of tax deferral from the compounding of investment returns.
Executives can also choose where they live when they receive this compensation, including in a low-tax state. For example, CEOs who move after they retire from relatively high-tax New York to Florida, which has no state income tax, would pay substantially lower state taxes on this deferred compensation. These accounts can even be passed on to the executive’s heirs, allowing our country’s extreme wealth concentration to be passed on to future generations. These rules are contributing to the perpetuation of a new aristocracy.

And third, a quick look at the pension funding status at the corporations with the largest CEO retirement accounts:

Finally, here is the full breakdown of Fortune 500 CEOs’ retirement assets.

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19 Comments

  1. IF I WERE IN CENTRAL OR SOUTHERN AFRICA AND SAW SOMEONE FROM BEHIND, WOULD IT BE RACIST TO ASSUME THEY WERE MOST LIKELY A BLACK PERSON?? I THINK NOT. SO IF YOU ARE ON THIS BOARD, THERE IS A VERY HIGH PROBABILITY THAT YOU ARE A RIGHT WINGER… SINCE I AM THE ONLY LIBERAL THAT ROUTINELY POSTS HERE.

  2. I think you make it quite apparent how much anger you have towards those people, but in your anger you’ve gone to an extremes and made an error yourself. In many ways, you’re acting just like the people you hate. Would you say I have a right to be upset? You see my name on a site and just throw me into a group of people without even knowing anything about me?

  3. WELL… MOST OF THE PEOPLE WHO POST ON THIS SITE ARE RIGHT WING REPUBLICANS AND SO CALLED LIBERTARIANS. YOUR NAME IS FAMILIAR… I HAVE SEEN IT ON THIS SITE BEFORE… SO IT WAS MY ASSUMPTION THAT YOU ARE A RIGHT WINGER. IF NOT, SORRY FOR THE ERROR. AT LEAST NOW YOU KNOW HOW MUCH ANGER I HAVE TOWARD RIGHT WINGERS FOR THEIR ROLE IN TRYING SO HARD TO DESTROY MY COUNTRY!!!

  4. John,
    Thanks for the reply. What’s troubling to me is that you have lumped me into an extreme category and branded me as someone terrible simply because I asked you a question. I guess my question is how do you know that I am stupid and brain-washed?

  5. THE RICH GOT THAT WAY BY ROBBING ALL THE REST OF US BLIND… SO TAXING THE RICH TO GET BACK AT LEAST SOME OF WHAT THEY HAVE STOLEN FROM ALL THE REST OF US IS NOT ONLY FINE WITH ME… THAT STRATEGY WORKED… VERY WELL,,, FOR MORE THAN 40 YEARS, BACK WHEN DEMOCRATS MADE THE UNITED STATES INTO THE RICHEST AND MOST POWRFUL NATION ON EARTH, BY TAXING THE RICH QUITE AGGRESSIVELY, AND USING THE MONIES TO BUILD INFRASTRUCTURE, AND TO THUS CREATE TENS OF MILLIONS OF GOOD PAYING JOBS! REPUBLICANS HAVE DESTROYED THAT WHOLE SYSTEM… AND THE PROBLEMS WE ARE HAVING BECAUSE OF THE REPUBLICAN WAYS OF DOING THINGS ARE OBVIOUS TO ANYONE WHO ACTUALLY OPENS UP THEIR EYES AND LOOKS!!! BUT REPUBLICANS REFUSE TO LISTEN TO ANYONE BUT THEIR WEALTHY REPUBLICAN MASTERS, AND WEALTHY REPUBLICANS HAVE MADE IT CLEAR TO THIER STUPID REPUBLICAN PUPPETS THAT DEMOCRATS ARE COMMUNISTS AND SOCIALISTS AND LIBERALS, AND THAT ALL THOSE THINGS ARE EVIL… WHEN IN FACT LIBERALS AND THEIR MODERATELY SOCIALIST POLICIES MADE AMERICAN BLOOM!!! OBVIOUSLY, YOU WILL DISAGREE WITH THAT… BECAUSE YOU ARE ONE OF THOSE STUPID BRAIN WASHED REPUBLICAN PUPPETS!!! GUYS LIKE YOU WILL BELIEVE WHATEVER YOUR BILLIONAIRE MASTERS TELL YOU TO BELIEVE, EVEN IF DOING SO MEANS BADLY HURTING YOURSELF AND YOUR OWN FAMILY AND YOUR OWN FRIENDS AND YOUR OWN NEIGHBORS… AND YOUR OWN COUNTRY!!! YOU RIGHT WING PUPPETS ARE TRULY STUPID BEYOND BELIEF!!!

  6. John, real quick question for you. Do you think that the solution to the separate between rich and poor is to take from the rich?

  7. By the way, Misogianes, I wasn’t taking a shot at you. I’m just pointing out the obvious answer.

  8. Any man or woman, at most, has one functioning pair of hands. So the question is, however productive, smart, qualified, deserving, etc., Anyone deserves such outrageous compensation mentioned in this article?
    Only Looting and Criminality, directly or indirectly, legally or illegally, would render this type of Injustice!

  9. With all of the whining, ranting, yelling, screaming, and tantrum tossing that you do on the topic of poverty, even if you were wealthy, you would have yourself convinced that you are living in a dumpster. Oh, and if Warren Buffet didn’t spend so much time being a liberal hypocrite, he might find some time to help.

  10. SO… THE MILLIONS OF PEOPLE LIKE MYSELF… WHO HAVE ACTUALLY HAD TO LIVE ON THE STREETS AND WHO HAVE ACTUALLY HAD TO FEED THEMSELVES AND THEIR KIDS OUT OF GARBAGE CANS… OR IN THE CASE OF MANY TENS OF MILLIONS OF PEOPLE… WHO HAVE HAD TO FEED THEMSELVES AND THEIR KIDS WITH FOOD STAMPS OR FOOD BANK DONATIONS OR SOUP KITCHENS… DO NOT KNOW WHAT POVERTY IS???? MAYBE YOU SHOULD TRY LIVING LIKE THAT FOR A FEW MONTHS, TO GET OVER YOUR INCRDIBLE ARROGANCE AND SELF CENTEREDNESS!!! THIS COUNTRY IS FULL OF MODERATE TO EXTREME POVERTY… AND MEANWHILE, THERE ARE MILLIONS OF PEOPLE IN THIS COUNTRY WHO LIVE SO HIGH ON THE HOG THAT THEY COULD LITERALLY END POVERTY IN THIS NATION… WITH JUST SOME OF THE MONEY THAT THOSE PEOPLE WASTE EVERY YEAR!!! WARREN BUFFET… OR BILL GATES… EITHER BY THEMSELVES… COULD LITERALLY FUND THE ENTIRE FOOD STAMP PROGRAM FOR THIS ENTIRE NATION FOR AN ENTIRE YEAR… AND THYE WOULD STILL BE BILLIONAIRES! NEVER MIND WHAT ALL THE OTHER 8 PLUS MILLION MILLIONAIRES IN THIS COUNTRY COULD DO!!! CONSIDER WHAT THAT RIGHT WING IDIOT BEN CARSON SAID THE OTHER NIGHT ON THE REPUBLICAN DEBATE… THAT THE TOP 1% COULD GIVE THE GOVERNMENT THEIR ENTIRE NET WORTH… AND IT WOULD NOT EVEN MAKE A DENT IN THE FEDERAL DEBT….!!! THIS GUY IS A LEADING CANDIDATE FOR PRESIDENT???? THE NET WORTH OF THE TOP 1% OF THE US POPULATION IS ALMOST 35 TRILLION…. ALMOST ENOUGH TO PAY OFF THE ENTIRE FEDERAL DEBT TWICE OVER!!! OR… THE TOP 1% COULD PAY OFF THAT ENTIRE EBT… AND STILL BE RICHER THAN THE BOTTOM 80% OF ALL THE REST OF THE PEOPLE IN THE UNITED STATES… COMBINED! I DO NOT THINK THAT YOU ARROGANT SELFISH SELF CENTRED REPUBLICANS EVEN REALIZE JUST HOW FREAKING RICH YOU REALLY ARE… NOR DO YOU SEEM TO UNDERSTAND THAT THE COMBINED NET WORTH OF THE ENTIRE BOTTOM 40% OF ALL THE PEOPLE IN THE UNITED STATES IS…. ZERO… NOTHING… NOT A DAMN THING!!! WHEN I WAS HOMELESS… 40 YEARS AGO, MOSTLY… I WOULD OFTEN WALK AROUND WITH NO MORE THAN A COUPLE OF COINS OR A COUPLE OF DOLLARS IN MY POCKETS. IN THEORY… IF I WERE TO DO THAT TODAY… I WOULD STILL BE RICHER THAN THE ENTIRE BOTTOM 40% OF ALL THE PEOPLE IN THE UNITED STATES…. COMBINED!!! IF THESE STARK NUMBERS… AND THEIR DEEP AND PROFOUND IMPLICATIONS… DO NOT BOTHER YOU… THEN YOU ARE NOT A REAL AMERICAN, NOR EVEN A REAL HUMAN BEING!!!

  11. Just mocking your theory on who is wealthy. You yell and scream about anyone who has a penny more than you, and given that that demographic seems to be most of the population, it is quite obvious why you are so angry.

  12. HOW IS ANY OF THIS MY THEORY??? THE WRITER MADE STATEMENTS OF FACT, CONCISELY ILLUSTRATED WITH A COUPLE OF GRAPHICS THAT SHOWS JUST HOW EXTREMELY CONCENTRATED THE WEALTH OF THIS WORLD REALLY IS. WHAT THAT WRITER FAILED TO MENTION IS… WEALTH IN THE UNITED STATES IS EVEN MORE CONCENTRATED THAN IT IS WORLD WIDE. BUT… OF COURSE… YOU SEE NOTHING WRONG WITH A COUPLE THOUSAND RICH PEOPLE HAVING A GREATER NET WORTH THAN THE BOTTOM 200 MILLION PEOPLE IN THIS COUNTRY… BECAUSE… AFTER ALL… YOU ARE JUST ANOTHER BRAINLESS RIGHT WINGER, AND SEE NOTHING AT ALL PROBLEMATIC ABOUT THE ENORMOUS ECONOMIC, SOCIAL, AND POLITICAL POWER THAT THOSE RICH REPUBLICANS HAVE STOLEN FROM ALL THE REST OF US… BY MOSTLY LEGAL MEANS, OF COURSE. LEGAL… BECAUSE THE PUPPETS THEY PUT INTO OFFICE MADE THEIR CRIMES LEGAL!!!

  13. One of many problems with your theories is that you classify as rich anyone who has one penny more than you, which ends up being a rather large demographic.

  14. I’ll believe democrat’s care when they reenact “glass segal ” which clinton repealed , and get real reforms that affect rich dems also !

  15. All you did was state the obvious 6 times and offering no potential solutions. And the article was replete with poor grammar. And the brilliant left winger below puts all the blame on Republicans.But those dang Democrats do jackshit about effecting change.
    This is journalism at its worst.

  16. HO HUM… MORE OLD NEWS!!! THE RICH ARE SO FREAKING RICH THAT THEY COULD LITERALLY BUY UP THE 10% OF THE UNITED STATES ASSETS THAT THEY DO NOT ALREADY OWN, OUT OF THEIR POCKET CHANGE… BUT THOSE DANG SOCIALISTIC DEMOCRATS DO NOT LIKE THIS EXTREME 3RD WORLD STYLE MALDISTRIBUTIONS OF INCOME AND WEALTH… AND RIGHT WING REPUBLICANS WILL FIGHT THOSE DEMOCRATS TO THE BITTER END… BECAUSE REPUBLICANS… ESPECIALLY RIGHT WING REPUBLICANS… HATE THE IDEA THAT THE RICH SHOULD GIVE BACK EVEN A LITTLE BIT OF WHAT THEY HAVE STOLEN FROMA LL THE REST OF US!!! RIGHT WINGERS LOVE THE CORPORATE DICTATORSHIP THAT REPUBLICANS HAVE CREATED HERE IN AMERICA… AND IF YOU SPEAK OUT AGAINST THAT DICTATORSHIP… OR THE HUGE DISPARITIES IN WELATH AND INCOME… AND ALL OTHER OPPORTUNITIES… THAT THIS CAUSES… REPUBLICANS WILL INSIST THAT YOU ARE A LOSERT AND A SOCIALIST AND HATE AMERICA!!! WELL… RIGHT WINGERS…. JUST REMEMBER THAT MOST OF YOU ARE THE UEFUL IDIOTS AND THE PAWNS AND PUPPETS OF THE RICH… AND ONCE THEY HAVE CONSOLIDATED THEIR ECONOMIC, SOCIAL, AND POLITICAL POWER… WITH YOUR ENTHUSIASTIC SUPPORT AND ASSISTANCE… THEY WILL TOSS YOU ASIDE LIKE USED TOILET PAPER!!! SO.. RIGHT WINGERS AND OTHER REPUBLICANS… ENJOY BEING USED WHILE YOU CAN… THE BENEFITS OF BEING BROWN NOSERS AND TRAITORS ARE FLEETING!!!

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