Tuesday, July 19, 2005
Hero
It's not often I read a CEO story online and think, "Wow. What a great guy." Meet the exception, Jim Sinegal, CEO of CostCo. He has a very interesting philosophy, really. CostCo should limit their markups, pay their employees good wages and give them exceptional benefits.
The reaction of Wall Street Analysts:
And Dreher's comment makes them sound like a bunch of whiny, ungrateful bastards. "Boo-hoo. All we do is sit on our fat asses waiting for dividend checks, and the CEO of CostCo has the nerve to give his customers fair prices and pay his employees a living wage."
Give me a break.
The Sinegal saga gets even better though. His annual salary? $350,000. Compare that to CEO's of companies that make multi-millions, at the expense of employees and customers. Find me a company that's just laid off a few thousand workers, and I'll show you a company that just gave huge raises to its executives. Here's Sinegal's explanation of his behavior:
We need more executives like Sinegal, and we need to kick bankers like Dreher to the curb. We need to extinguish the culture of greed. Because, honestly, does anybody in this country really need more than $350,000 a year?
I'm not advocating Socialism, just sanity. For far too long, big companies have approached ridiculous executive salaries via the "dog's balls" theory -- because they can. That greed has come at the expense of the workers who make those huge salaries possible in the first place.
Luckily we have people like Jim Senegal in business. We need more like him. And the ultimate irony is that CostCo probably will outlast a lot of the competition. As Sinegal reminds us in the article:
The reaction of Wall Street Analysts:
Some Wall Street analysts assert that Sinegal is overly generous not only to Costco's customers but to its workers as well.Look at that quote again, because it epitomizes everything that's wrong with Corporate Attitude. Excuse me, but shouldn't it be better to be an employee or customer of a business? Granted, stockholders are the "owners" of a company, but without happy customers to give them the money and loyal employees to keep things running, those stockholders are nothing.
Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Wal-Mart's Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder." [Emphasis added].
And Dreher's comment makes them sound like a bunch of whiny, ungrateful bastards. "Boo-hoo. All we do is sit on our fat asses waiting for dividend checks, and the CEO of CostCo has the nerve to give his customers fair prices and pay his employees a living wage."
Give me a break.
The Sinegal saga gets even better though. His annual salary? $350,000. Compare that to CEO's of companies that make multi-millions, at the expense of employees and customers. Find me a company that's just laid off a few thousand workers, and I'll show you a company that just gave huge raises to its executives. Here's Sinegal's explanation of his behavior:
"I've been very well rewarded," said Sinegal, 69, who is worth more than $150 million thanks to his Costco stock holdings. "I just think that if you're going to try to run an organization that's very cost-conscious, then you can't have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong."Hear, hear.
We need more executives like Sinegal, and we need to kick bankers like Dreher to the curb. We need to extinguish the culture of greed. Because, honestly, does anybody in this country really need more than $350,000 a year?
I'm not advocating Socialism, just sanity. For far too long, big companies have approached ridiculous executive salaries via the "dog's balls" theory -- because they can. That greed has come at the expense of the workers who make those huge salaries possible in the first place.
Luckily we have people like Jim Senegal in business. We need more like him. And the ultimate irony is that CostCo probably will outlast a lot of the competition. As Sinegal reminds us in the article:
"On Wall Street, they're in the business of making money between now and next Thursday," he said. "I don't say that with any bitterness, but we can't take that view. We want to build a company that will still be here 50 and 60 years from now."
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