Example: [Collected via e-mail, November 2012]
Costco CEO pays his employees $17 hour plus benefits and resists Wall Street demands to cut pay and benefits.
Origins: This graphic featuring a photograph and information about Costco warehouse store chain CEO James Sinegal was circulated in November 2012 and was generally accurate, but a bit outdated. Jim Sinegal
But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.
Costco's average pay, for example, is $17 an hour,
Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.
Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."
He also dismisses calls to increase Costco's product markups.
Despite Costco's impressive record, Mr. Sinegal's salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.
In my interview with Costco CFO Richard Galanti, he mentioned Jim Sinegal every couple of minutes, attributing the company's high wages to the CEO's personal values. CFO Galanti acknowledged having at times argued with his boss, urging him to curb Costco's generosity on health care. (Sinegal eventually agreed with him, reluctantly, in 2003 but insisted that care remain affordable to employees.)
Sinegal's kindliness is impressive, but he's also
According to Yahoo! Finance, in 2011 Jim Sinegal's total yearly compensation as a Costco company executive, including salary and bonuses, was $629,000, and he garnered another $12,300,000 through the exercise of stock options.
Last updated: 28 November 2012
Allison, Melissa. "Costco's Colorful CEO, Co-Founder Jim Sinegal to Retire." The Seattle Times. 31 August 2011. Featherstone, Liza. "Wage Against the Machine." Slate. 27 June 2008. Goldwert, Lindsay. "Costco Employees Give company Top Ratings ." New York [Daily News]. 29 November 2010. Greenhouse, Steven. "How Costco Became the Anti-Wal-Mart." The New York Times. 17 July 2005. Schmit, Julie. "Costco Wins Loyalty with Bulky Bargains." USA Today. 23 September 2004.