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The Massive Retirement Gap for CEOs Versus Workers

CBS News

When it comes to how income inequality can impact retirement, one has to look no further than the CEO suite.

While top executives earn higher salaries and bonuses than the rank-and-file during their careers, they are also subject to huge retirement windfalls which can make the income imbalance seem almost trivial. Take Target and its former chief executive Gregg Steinhafel, who left the company after its massive credit-card breach and was given retirement plans worth more than $47 million, according to Bloomberg News. [...]

Steinhafel's retirement package "is kind of shocking," said Robert Hiltonsmith, a senior policy analyst at the liberal-leaning think tank Demos. "We've seen that wages have been stagnant and even falling over the past 10 to 20 years, but that undercounts a kind of stealth cut in total compensation, because workers 20 or 30 years ago had a pension. Now, either they are not getting anything or only getting some contribution from an employer through a 401(k) match."

The number of pension plans have dropped by more than 70 percent from 1984 to 2012, while 401(k) plans have boomed to more than 500,000 from 17,000 in the same time period, Bloomberg notes. In an email, Target noted that what Bloomberg calls retirement package includes "a number of items, including deferred compensation, which is earned during the course of working, as part of an annual salary."