Unhelpful in the Battle Against Socialism’s Growing Appeal: Sherwin Williams Eliminates Employees’ 401(k) Match Amidst Stock Buybacks and Increased CEO Compensation

As I’ll get to in a few paragraphs, socialism as an economic and political philosophy is gaining traction in this country, especially among younger voters. For those of us defending free market economics, it doesn’t help us when corporations behave in a way that gives capitalism a bad name.

Sherwin Williams has just announced that it is suspending its 401(k) matching program, which matched employee retirement contributions at an amount up to 6% of an employee’s pay. This is expected to save the company about $165 million per year.

Meanwhile, Sherwin Williams has also flushed away $892 million on stock buybacks in the first two quarters of 2025 to prop up its stock price, a move which is critically important for Sherwin executives, whose compensation is heavily based on stock awards and the performance of its stock.

Sherwin’s revenue and profit have been solid but flat for several years in a row. Revenue was $23 billion in 2023 and 2024, and it is tracking for $23 billion again in 2025. Net Income was $2.5 billion in 2023, $2.6 billion in 2024, and it is tracking at $2.5 billion for 2025.

With revenue and profit stuck, Sherwin has decided it needs to slash total compensation and benefits to employees, thus the $165 million cut to employees’ retirement funds.

By contrast, Sherwin Williams’ President and CEO, Heidi Petz, continues to lavishly reward herself for Sherwin’s stagnant financial performance. With board approval, Ms. Petz’s total compensation increased from $10.1 million in 2023 to $12.9 million in 2024, a 28% increase. Of the $12.9 million in compensation, $9.9 million was in the form of stock and stock options, so there is clearly an incentive for Ms. Petz to nudge the price of the stock upward by whatever means. Since the company’s flat financial performance isn’t driving the stock price higher, stock buybacks are another way of achieving that objective. It sure is convenient that Sherwin was able to repurpose cash that might otherwise be used toward employees’ 401(k) match for the purpose of stock buybacks.

News of Sherwin Williams suspending its 401(k) match broke a couple of weeks ago:
“Sherwin-Williams said to pause 401(k) matching as macro headwinds dent sales” [MSN / Seeking Alpha – 9/17/2025]

Sherwin-Williams will temporarily suspend its matching contributions to employee 401(k) plans due to weak sales and higher costs, Cleveland.com reported this month, citing an internal communication. The suspension will apply to the paint manufacturer's policy of matching 100% of the first 6% of eligible employee 401(k) contributions, starting October 1.

CEO Heidi Petz said the decision was a result of high mortgage rates weakening housing demand and inflation reducing DIY demand. Tariff policies also dented industrial demand and raised costs for the company. "Sherwin-Williams is not immune from these conditions, which have lasted longer and been more impactful than anticipated," Petz said, adding that macroeconomic headwinds will likely persist through at least the first half of 2026. The company has also taken up cost-saving measures such as reducing third-party spending, delaying new hires and restructuring global assets.

I’ve read several news reports about the financial headwinds forcing Sherwin to cut employees’ compensation via suspension of the 401(k) match, but I have not been able to find any documentation of “cost savings” to be realized by giving a haircut to executive bonus plans. Neither have I been able to find any reporting that stock buybacks are being suspended to conserve cash.

Whenever I discuss executive pay, I receive some pushback arguing that stock incentives are not an expense, and therefore do not affect a company’s profit. That’s true. Executive stock incentives come from diluting the ownership of existing shareholders and redistributing it to company executives. But when a company uses its cash to buy back shares, and then it awards stock shares to its executives, it is a two-step distribution of the company’s cash and equity to its executives.

Our friends at the Heartland Institute recently released a very disturbing poll indicating that socialism is becoming increasingly popular among young voters:

Heartland/Rasmussen Poll: 53% of Young Voters Want a Socialist to Win the 2028 Presidential Election, 76% Want Government to Nationalize Major U.S. Industries [Heartland Institute – 9/04/2025]

Additionally, 76% of respondents said they “strongly agree” or “somewhat agree” that “Major Industries like health care, energy, and big tech should be nationalized to give more control and equity to the people,” suggesting that increasingly more young American voters favor radical socialist policies.

In case my persistent bashing of woke corporations and rapacious executives causes any misunderstanding, please know that I am a passionate capitalist / free marketeer. I detest socialism and communism. What bothers me is how many corporate executives do not share my passion. Too many executives seek oligopolistic barriers to competition, regulatory favor, and labor laws that allow them to use foreign labor that is chattel-adjacent. Many executives also see their companies as a pool of wealth that they are entitled to tap into for personal self-enrichment.

The open contempt that much of corporate America expresses for American labor and labor expense is dangerous. If we don’t want young Americans getting seduced by the appeal of socialism, we can’t have corporate executives re-allocating employees’ retirement benefits toward uses that will personally benefit those executives.

In a free market economy, CEOs like Heidi Petz have the ability (with the pliant acquiescence of their Boards) to loot their own companies and cut employee pay and benefits. But just because they can, doesn’t mean they should.

Similarly, voters have the option of casting their ballots for candidates who will nationalize corporations and also loot them. Just because they can, doesn’t mean they should do so either. But the scary part is that they can vote to impose socialism.

The job for those of us defending capitalism from the siren song of socialism is made much harder by executives who feel entitled to ever-growing 8-figure compensation, irrespective of their companies’ results, and made worse by their attitude that employees and labor expense are a pestilence that reduces executive bonuses.

My latest piece at The Blaze, “If Intel Gets Government Cash, Taxpayers Deserve Equity” also touches on the issue of corporate America and socialism.

Intel took a $9 billion handout from the federal government in a deal arranged by the Biden administration. President Trump responded by having the government take a non-voting, 10% equity share in the company. Because Intel received what amounted to a huge capital infusion from taxpayers, its shareholders rightfully deserved to have their equity diluted accordingly. While “free market conservatives” were assailing the Trump administration for taking an ownership stake in a publicly traded company, they tended to ignore the most offensive part of this transaction – the redistribution of wealth from taxpayers to a major corporation.

I also point out that this is not “unprecedented” for a Republican administration, since it was President George W. Bush in 2008 who handed over $700 billion to major financial institutions during the financial crisis, and in consideration, the government took an ownership share in those companies.

In return, those banks gave the government preferred stock, which didn’t have voting rights either – but did give the government first dibs on dividends and liquidation. That’s ownership.

Even better, Bush’s Treasury also demanded warrants — rights to convert into common stock down the line. If Trump had exercised those warrants in his first term, the federal government could have taken actual equity in Goldman Sachs, JPMorgan Chase, and the rest.

The piece is behind a paywall, buy if you’re a Blaze subscriber, I’d be honored if you’d give it a read.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

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