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, 42 percent higher than its fiercest rival, 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."...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..."I've been very well rewarded," said Mr. Sinegal, 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."Let that sink in. Does BP, or GM, or anyone else hold that attitude. I'm not sure what they're background is, but that is refreshing. A great example of reasonable and responsible capitalism. Would there were more...
Wednesday, May 7, 2008
I've only been to Costco once- and I got some kickin' jeans- but I stumbled across this article on a sports blog. It is from the 2005 NYTimes and describes the difference in employee pay and benefits between Wal-Mart and Costco. You can read it all if you want, but this was most interesting: