Most fast food workers don’t earn enough to retire with much of a pension. Then there is David Novak, executive chairman of YUM Brands (YUM.N), the conglomerate that runs Taco Bell, Pizza Hut, and KFC outlets.
Novak’s total retirement holdings, including deferred compensation, are worth $234 million – more than any other Fortune 500 chief executive.
Novak tops the list of Fortune 500 CEOs with the largest retirement nest eggs, according to a study from two progressive think tanks – the Center for Effective Government and the Institute for Policy Studies.
Their data comes from Security & Exchange Commission filings for the 500 largest public companies. The figures are stunning and cast a harsh and troubling light on soaring retirement inequality. The report offers yet another indication that runaway income inequality is producing grossly unfair retirement outcomes.
Novak is an accomplished business leader with a big-time record of creating value for shareholders – and most of his retirement nest egg consists of bonuses and deferred stock over his 29 years at the helm. YUM stock appreciated 900 percent during his tenure, a company spokesperson notes.
Still, among all Fortune 500 CEOs the current average value of just pensions is $9.4 million. That includes the present value of defined benefit pensions, 401(k) account balances and other deferred compensation. For example, John H. Hammergren, CEO of drug wholesaler McKesson Corp. – which froze its employee pension fund in 1996 – has the largest Fortune 500 pension account, valued at $114 million.
The report’s figures are stunning, and they offer yet another indication that runaway income inequality is producing grossly unfair retirement outcomes.
In 2013, pre-retirement households (age 55-64) with annual income below $39,000 had median total retirement savings of $13,000 in 401(k) and IRA accounts, according to the Center for Retirement Research; middle-class households (income from $61,000 to $100,000) had median savings of $100,000. Only in the highest-income band ($138,000 or more) were accumulations significant at a median of $452,000.