Walmart's Now Ex-CEO To Pocket $113 Million Pension, 6182 Times Greater Than Average WMT Worker's 401(k) Balance

Tyler Durden's picture




 

Remember when Hank Paulson grudgingly left Goldman to become Treasury Secretary? As was disclosed subsequently, the move may have been ungrudging in retrospect due to a very specific ulterior motive: in July 2006, Henry Paulson liquidated 3.23 million shares of Goldman in a one time public sale. At the then GS stock price of $152 this meant a one time gain of $491 million. But not just $491 million - $491 million tax free. The reason: In 1989, the government created a one-time loophole for select high level positions to "help attract highly talented professionals away from the private sector." Thanks to the loophole, the candidate could liquidate their entire portfolio without paying a dime in capital gains taxes. Without this loophole, had Henry sold his shares at the exact same price and time, he would have been liable for more than $200 million worth of state and Federal capital gains taxes.

Moments ago, as we reported, the CEO of Walmart, Mike Duke, retired. And while he will hardly pocket quite as much as Hank Paulson, since unlike Hank the Tank he will be subject to taxation, his departure may raise even more eyebrows as his retirement package, to which he is now entitled, is a whopping $113 million, or about 6,182 times greater than the average 401(k) balance of a typical Wal-Mart worker according to a NerdWallet analysis. Naturally, this is orders of magnitude greater than the already debatable ratio of CEO compensation, which was $20.7 million in 2012, or about 305 times more than the average Walmart manager, and 836 more than the take home of the median Walmart worker.

NerdWallet's take below:

These pension plans, which typically consist of non-qualified retirement plans, are offered at the company’s discretion and are reserved for top executives. CEOs often defer receiving their multimillion-dollar cash bonuses till their retirement years, storing the cash away in a retirement plan that typically allows them to pay lower taxes once they draw on the money.

 

A key factor behind massive CEO pensions is CEO total annual compensation, which typically consists of cash bonuses and stock options awards. In September, the SEC proposed rules requiring publicly traded companies to disclose the ratio of their CEO’s compensation to the median compensation of all other employees. While the rule is currently undergoing a 60-day public comment period, NerdWallet Taxes has calculated the pay gap ratio between CEOs and non-executive employees, which include managers and non-managers.

 

Walmart’s CEO tops the list with a pension that is more than 6,000 times larger than the non-executive employee’s average 401(k) balance of $18,000, according to Walmart’s latest January 2013 figures available from financial information company BrightScope. Walmart’s employee 401(k) plan was valued at $18.1 billion, but covered roughly 1 million employees, the highest in our sample.

WMT discussed this previously, when Walmart spokesperson Brooke Buchanan told HuffPo he took issue with the study’s description of Duke’s retirement package as a pension, noting that it is technically a deferred compensation plan that accrues over time.

“Our CEO has been with us since 1996, and so [the compensation package] is obviously something that’s been acquired over many years,” Buchanan said.

 

“We are the world’s largest retailer, and this [the CEO job] is a pretty tough job,” Buchanan said. “We want to make sure the right person is in that job. We have a responsibility to our shareholders to have the right people in the job.”

And now that the CEO has had enough of doing his tough job, Mike will have much more time to work on practicing his smile.

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Mon, 11/25/2013 - 10:26 | 4187556 Cognitive Dissonance
Cognitive Dissonance's picture

The looting of the American middle class has many more miles to go before we sleep.

Mon, 11/25/2013 - 10:52 | 4187650 pemdas
pemdas's picture

When the proxies come, I always vote NO on the executive compensation. Wish the mutual funds would do the same.

Mon, 11/25/2013 - 12:04 | 4187876 Buckaroo Banzai
Buckaroo Banzai's picture

"Wish the mutual funds would do the same."

What, are you kidding? That's a great way to get kicked out of the club. NO pissing in the pool allowed!

Mon, 11/25/2013 - 11:23 | 4187733 unrulian
unrulian's picture

Relax...he started the employee to employee food drive....he's a nice guy.

/s

Mon, 11/25/2013 - 18:34 | 4189058 ajax
ajax's picture

 

 

HEY AMERICA!!! IF WE CAN'T BE FREE AT LEAST WE CAN BE CHEAP!!!

Cheap with wages that is, cheap with the quality of life for all those working poor with toothaches and no way to pay a dentist, viruses with no way to pay a doctor.

Hey Walmart: A Pox On Your House.

 

Mon, 11/25/2013 - 11:28 | 4187749 Hulk
Hulk's picture

Fortunately, a few of us are on the road not taken !!!

Mon, 11/25/2013 - 11:35 | 4187778 ejmoosa
ejmoosa's picture

If this is looting, then it's voluntary. 

You do not have to shop, work there, or own their stock.

We should focus on the looting by force instead.

This is just a diversion to keep you unfocused on the state sponsored looting.  And so far, it's working.

Mon, 11/25/2013 - 11:57 | 4187851 Pizza man
Pizza man's picture

Thanks for some sanity, ejmoosa. Next Tyler is going to be scream THERE SHOULD BE LAWS!

 

How about a few articles about unions looting members forced to pay dues and then spending it on a political party they don't agree with?

 

Or why there are so few mfg jobs created? (regs, taxes and litigation!) You want to help the poor? Create huge demand for labor. Shooting WMT and Burger joints is mindless.

Mon, 11/25/2013 - 12:55 | 4188030 ejmoosa
ejmoosa's picture

Thanks...

 

And if anyone wants to blame someone, blame the shoppers at Wal-mart before you blame Wal-mart, who have provided the sales dollars that allowed Wal-mart to grow.

Oh wait, of course no one here shops at Wally World, right?

Wal-mart allowed low income shoppers to stretch their dollars further.  Then the middle class followed them into the stores.  

Wal-mart has helped many more people survive on meager incomes from OTHER sectors of our anemic economy than it has ever led to earn meager incomes.

Would all those shopping at Wal-mart be better off had they been forced to shop elsewhere and at higher prices.  No.

 

The problem is NOT Wal-mart.  It's the economic reality that makes Wal-mart the only viable option. That's where the blame belongs for this entire scenario.

 

That leads us straight back to the Federal government, the Federal Reserve, and it's endless monkeying with a free market economy to eek out that very last bit of consumption.

 

 

 

 

Mon, 11/25/2013 - 12:06 | 4187878 Buckaroo Banzai
Buckaroo Banzai's picture

Exactly. This is one of the symptoms of the disease, not the disease itself.

Mon, 11/25/2013 - 12:16 | 4187911 Pizza man
Pizza man's picture

YESSSSSSSSSSSSSSSS!! And getting folks riled up about WMT does the poor exactly ZEROgood. Let's attack the problem, statism.

Mon, 11/25/2013 - 12:42 | 4187983 moneybots
moneybots's picture

"This is just a diversion to keep you unfocused on the state sponsored looting.  And so far, it's working."

 

Corporate looting drives state sponsored looting.  One person gets 113 million while Walmart workers apply for government benefits in order to survive.

 

 

Mon, 11/25/2013 - 13:26 | 4188115 walküre
walküre's picture

You still don't see how it works, do you? WMT is a big corporate welfare whore. The stock is boosted up by fake trillions the Fed blew into the banks. The same elite who owns the Fed, controls the banks, controls the boards in places like WMT. The assistance programs SNAP etc directly benefited corporate welfare whores like WMT. The employment conditions at WMT do not cover the cost of living and WMT can count on the taxpayer to pick up the tab for that as well.

The guy who gets $113 million as retirement package is at the top of the shit pile and deserves to get shot. Who needs this much money? Nobody. Can the people afford to compensate one guy to that extent. Not really. A bounty of a couple million on his head would do the trick and save alot of money. It would also send a clear message of what a person's retirement is worth.

Mon, 11/25/2013 - 15:01 | 4188414 Uber Vandal
Uber Vandal's picture

What many people often forget, or fail to recognize, is that Wal-Mart DOES dictate the price it will pay to its suppliers, including how they transport it now, and that has cost a number of jobs, businesses, and communities.

(Decade old artilces that are starting to see answers to the questions posed now)

http://www.fastcompany.com/47593/wal-mart-you-dont-know

http://www.businessweek.com/stories/2003-10-05/is-wal-mart-too-powerful

http://usatoday.printthis.clickability.com/pt/cpt?action=cpt&expire&urlI...

http://www.rarethoughts.com/walmart.html

And, a bit more recent article:

http://www.enterrasolutions.com/2010/06/walmart-continues-to-squeeze-sup...

 

 

 

Mon, 11/25/2013 - 12:16 | 4187914 DosZap
DosZap's picture

No SOB on earth deserves a 113 Million dollar pension, not while workers are stiffed at EVERY turn.

Unacceptable.

Mon, 11/25/2013 - 10:27 | 4187557 Shizzmoney
Shizzmoney's picture

Smart to leave before SHTF. 

Usually arsonists know where the fire starts.

Mon, 11/25/2013 - 10:30 | 4187573 I am Jobe
I am Jobe's picture

WMT , DELL. HPQ, IBM, TGT, and many more care about their employees well being.  

 

Mon, 11/25/2013 - 12:43 | 4187984 Colonel Klink
Colonel Klink's picture

Bwahahaha, nice sarcasm.  IBM (from past experience) like all the others just bleed their workers dry then cast aside the spent shell.

Mon, 11/25/2013 - 10:32 | 4187576 dizzzave
dizzzave's picture

At what point to people decide they've had enough, hoist the black flag and start slitting throats?

Mon, 11/25/2013 - 10:40 | 4187607 CPL
CPL's picture

About the same time pigs fly.  Or use the system and current infrastructure in place to take it all back by removing the allowances given to people that really don't have a concern about anyone else but their bag of loot.  Which is quickly losing purchasing power.

Mon, 11/25/2013 - 10:57 | 4187669 RaceToTheBottom
RaceToTheBottom's picture

Forget the black flag.

Turn the US flag over; upside down.

That is far more representational of what has happend to this once great country

Mon, 11/25/2013 - 12:10 | 4187891 Vendetta
Vendetta's picture

Indeed.  The US is truly a nation in distress due to unbridled, unwavering corruption

Mon, 11/25/2013 - 12:22 | 4187929 Pizza man
Pizza man's picture

Exactly..and it would NEVER be happening unless we were "ripe for the picking". Remember, WE voted for the arseholes. There was no military coupe.

Mon, 11/25/2013 - 22:49 | 4189579 StychoKiller
StychoKiller's picture

Maybe so, but WHO selected the candidates first?

Mon, 11/25/2013 - 18:29 | 4189047 Upland27
Upland27's picture

sounds like a mencken quote

Mon, 11/25/2013 - 10:33 | 4187585 Kina
Kina's picture

That was because he was so successful and raised their profits x 6,000

worth evrey penny no doubt... he will probably tell you how great he was..

 

The pilfering of America.....you wonder why during the French revolution they dragged these types out to the guilloteine

Mon, 11/25/2013 - 10:34 | 4187586 mickeyman
mickeyman's picture

He paid into it, didn't he?

Mon, 11/25/2013 - 10:46 | 4187632 Chief Kessler
Chief Kessler's picture

that's right, wow his 401k deduction must have been $83,000 per week, what a guy!

Mon, 11/25/2013 - 10:33 | 4187587 ziggy59
ziggy59's picture

Long Pitch forks...

Mon, 11/25/2013 - 10:34 | 4187590 Rentier
Rentier's picture

I bet the Walmart 401k number is heavily skewed by a few with lots and many with none....$18k would be very hard to pull off for 80% or more their employees even with then having EBT cards...

Mon, 11/25/2013 - 11:18 | 4187705 Disenchanted
Disenchanted's picture

Oct 2010(under Duke):

 

 

Ever on the lookout for ways to slash costs, Walmart (WMT) executives have found yet another place to trim: After nearly 40 years, the retail behemoth is eliminating profit-sharing payouts to workers. This is one of those maneuvers that makes the bottom line look better in the short term, but could have insidious negative effects in the long run.

 

Instead of the profit-sharing plan, which added as much as 4 percent to workers' pay at the always-profitable chain, Walmart will offer an up to 6 percent match on funds workers deposit into their company 401(k) retirement accounts. The beauty of this seemingly magnanimous offer is that many low-paid retail workers don't participate in retirement plans.Bloomberg reports retail companies generally see lower-than-average participation rates, and the average is 75 percent.

 

 

source: http://www.cbsnews.com/news/walmarts-short-sighted-cost-cut-profit-shari...

Mon, 11/25/2013 - 15:24 | 4188488 waterhorse
waterhorse's picture

I wonder how well Wal-Mart's "dead peasant insurance" scheme is doing?

Mon, 11/25/2013 - 10:34 | 4187591 toady
toady's picture

Sweet golden parachute. Nice work, if you can get it. How much does the next guys contract say he gets? And where do I sign up?

Mon, 11/25/2013 - 10:36 | 4187594 bania
bania's picture

What do you expect when you're 6,000x smarter than the average person?

Mon, 11/25/2013 - 10:43 | 4187618 Chief Kessler
Chief Kessler's picture

That's right Bania, 6000x smarter and better.  Don't tell me I don't deserve it, I earned it.  I can't believe Tyler is actually printing this kind of socialist drivel. Mr. Wal-nuts earned a bazillion dollar retirement package, that's his business and none of ours, after all we can be happy to mow his lawn and protect his interests with our lives if necessary.  Take your socialism out to the gun range and shoot it.

Mon, 11/25/2013 - 10:36 | 4187596 Bryan
Bryan's picture

So what?  Why is this important?  Should we steal his retirement income and distribute to all the WMT workers then?

Mon, 11/25/2013 - 10:44 | 4187619 Bangin7GramRocks
Bangin7GramRocks's picture

STEAL! It was never his! You are probably the first asshole to laugh when people lose there hard earned pensions through bankruptcy, but you defend a worthless cunt like this!

Mon, 11/25/2013 - 10:55 | 4187658 Bryan
Bryan's picture

Well, I'm trying to figure out what the issue is here, is all.  I sincerely don't know the story about this guy and this article appears to assume that the reader knows.  So... you're saying he personally bankrupted the company and caused pensions to be lost?  If that's the case, then he's evil.  But I have a feeling there's more to it than a personal mission to destroy a company.  A link to a story about it would be helpful.

Mon, 11/25/2013 - 11:07 | 4187693 Bangin7GramRocks
Bangin7GramRocks's picture

Wal-Mart isn't bankrupt. Only it's "treasured employees" file for bankruptcy. This guy ran a company that is the biggest welfare queen in the country and he gets hundreds of millions of dollars while his employees can't afford food. This is really the kind of country you want to live in? Really?

Mon, 11/25/2013 - 12:03 | 4187871 Bryan
Bryan's picture

OK I see.  So the argument here is that the CEO gets a lot of money and the workers get little?  How would you propose to fix this problem?  I really am not trolling here... I really don't know what the answer would be.  I believe capitalism is preferable to socialism because it allows more freedom of workers to gain wealth and become 'owners' rather than workers.  Am I wrong?

Mon, 11/25/2013 - 12:20 | 4187925 DosZap
DosZap's picture

As the worlds LARGEST retailer, bump your employees perks,insurance costs help, a livable wage, anything to help their workers to be better producers.

Mon, 11/25/2013 - 12:46 | 4187992 Pizza man
Pizza man's picture

The best thing for WMT workers is a BETTER JOB TO GO TO than working at WMT. I cringe whenever I read that Living wage fantasy land socialist bullcrap. See how well that worked out for the US automakers and the tax payers. There are 10th of them than 30 years ago and we just spent 50 billion "saving" their unions..I mean the auto company, 25 B of which is gone.

Sure, let's arbitrarily start raising everyone wages. That fixes America.

Mon, 11/25/2013 - 13:31 | 4188130 walküre
walküre's picture

Nuke Wall Street and the problem is gone. The value of money and all things will find a new equilibrium and truly the strongest and smartest will come out on top. The inbred elite, not so much.

Mon, 11/25/2013 - 22:52 | 4189589 StychoKiller
StychoKiller's picture

Sorry, but rules and regulations from Washington and the States also have a hand in driving a Country's economy into the ground!

Tue, 11/26/2013 - 03:48 | 4190025 Pizza man
Pizza man's picture

Exactly Skiller.Wall Street, the finincial capital of the world is not the entire problem. Maybe nuke the top 1% on Wall Street?? But don't expect that to fix the country. But I am of the opinion our problems are much more DC centric. 

Mon, 11/25/2013 - 12:56 | 4188037 Bryan
Bryan's picture

Yes, agreed that employees should get the amount of money and perks that is required to have enough employees to run the business.  So is $18,000/yr enough to get enough lowest-level employees to run the business?  Apparently so.  If not, they would have to pay more to get enough I would guess.  How is that a problem?  If it's not enough money for the employee to live on, then a different or second job would be called for, or a reduction in discretionary spending.  Or, the employees could form a union and go on strike and demand higher wages.  Isn't this process already available?  I just don't think the company doling out perks and higher wages when they clearly can get by with the wages they are paying now is the only answer.  The company's job is to make the highest profit possible from the goods/services they provide.  The worker's job is to gain the highest wages from the work they can provide.  Where is the inequity in that?

Capitalism is difficult, and does create inequalities in personal wealth.  Life is difficult and it's hard to see people suffer.  Volunteer, and donate from your own wealth on a regular basis.  You don't need a government to force you, or to do it for you.

Mon, 11/25/2013 - 12:21 | 4187930 Bangin7GramRocks
Bangin7GramRocks's picture

I'm asking why a certain level of compensation was justified for most of the 20th century and then suddenly it rose exponentially as wages for employees were decreasing to where we are now. Do you have a number where you would say, "wow, that's too much"? 2 billion? 10 billion? Should the unwashed masses work for $1 a day, how about 50 cents?

Mon, 11/25/2013 - 12:48 | 4188005 ejmoosa
ejmoosa's picture

Why?  Because instead of making decisions that affected 20,000 employees, decisions are being made that affect 20,000 stores. 

 

Tell me, where do the unwashed masses work for $1 a day?  Even if there were no stated mandated minimum for you to sell the most basic of resourses-your labor, it would not go for $1 a day.

Well, it might if you added NO value whatsoever.

Here's an idea.  If you do not like the wages being paid, start your own business, and let's see what YOU choose to do and how long you stay in business.

 

 

 

Mon, 11/25/2013 - 13:32 | 4188136 walküre
walküre's picture

Bangladesh, Vietnam, Indonesia are places where people will work for $1 a day.

Mon, 11/25/2013 - 14:46 | 4188362 ejmoosa
ejmoosa's picture

So what you really want is a New World Order that levels the playing field for everyone right?

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