Wall Street complains: Costco too nice to employees

[TalkingDog]

http://www.chron.com/cs/CDA/ssistory.mpl/business/3268811

snip
...not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that 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, 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."

snip
Emme Kozloff, an analyst at Sanford C. Bernstein & Co., faulted Sinegal as being too generous to employees, noting that when analysts complained that Costco's workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent.

"He has been too benevolent," she said. "He's right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden."

[blm]

1. Those of us at DU who can do this should BUY COSTCO STOCK.

.

[peace frog]

2. We should Buy Blue in general but

hell yes! Support Costco, shun Walmart.

[LaurenG]

16. I shop there every week.

I agree. May as well get some dividends.

[Demonaut]

33. I'm single and I shop there, and a lot of portional freezing....

Dumped my Sams Club card the day I got my Blue Report

[glitch]

28. Costco should sell stock directly to it's customers. No brokers.

Wouldn't the street just have a cow over that?

[Mojambo]

3. I've been thinking of applying to Costco

I can only work part time right now, but it seems like a very progressive place.

[leftynyc]

4. I'm at Cosco almost every week

and at 44 years of age, I've never walked into a Wal-mart. Add this to the reasons why.

[IChing]

5. I was told by a professor in college that the only reason you have unions

Is that, business is not doing their job. If business was doing their job the workers wouldn't need to organize.
Costsco is opening a store in the next county, just groundbreaking the site and 2000 people showed up for 150 jobs at the booth they set up because of Costco's reputation.

[vi5]

18. I agree with that 100% and from experience...

Through high school and college I worked at various factories and shop floors and such. There were companies I worked at that weren't union and when unions tried to get them to join they were met with at least indifference and at worst confrontational anger. The reason was that the company they worked for treated them well. They knew that by unionizing they would be losing more than they gained by setting up a wall between them and that management that they had such a good relationship with.

On the other hand all the places I worked that were unionized definitely needed to be in order for the employees to get a fair shake.

[IChing]

27. At the same time most places that treat their workers well are

far and few between, I've been in unions and never ever regreted it and have helped labor organize by speaking as a voice, which is democracy in the work place.

Democracy in the work place is where the pay off can be for the organization and individual.

The Payoff of Participation

Anyone who has been fortunate enough to work for a democratic organization or leader has probably experienced some of the benefits:

Higher motivation
Higher self-esteem and self-confidence
More initiative
More creativity
More self-discipline
More accountability
Higher productivity
More internal motivation to reach your full potential
Stronger feeling of fate control

[mondo joe]

6. In other words: Good employers make bad employers look bad.

The top salary is much closer to the median salary than what I'll bet you'd find in most comperable companies.

[OrlandoGator]

7. Costco is just plain better than Sam's Club.

Better products, better quality, better employees, better selection, better prices.

Screw Wal-Mart. People get exactly what they deserve when they shop there.

[nicknameless]

8. Beautiful, Blue Costco!

Let's flaunt their difference to as wide an audience as possible.
Recommended! :thumbsup:

[blondeatlast]

9. Gotta love this--it's just good business!

Despite Costco's impressive record, 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 American companies.

Stock prices up and his salary is modest; contrast that with United Airlines CEO Glenn Tilton; running UAL into the ground and making a FORTUNE.

[Maat]

10. Bless him!

What a great CEO!

Hey, here in Temecula/Murrieta, the parking lot of the local Sam's Club looks very empty compared to CostCo.

And it's a Rethuglican district!

I'm proud to both own Costco stock and to regularly shop there!

[cestpaspossible]

11. Costco stock UP, WalMart stock DOWN, and the analyst's conclusion

is that Costco should be more like WalMart :eyes:

[peace frog]

14. The Wall Street Journal

can cry me a frickin' river... bozos.

[punpirate]

12. This might have some merit...

... were Costco losing money. In fact, they are profitable. They just aren't as profitable as Wall Street would like. When they start holding up WalMart Corp. as the industry standard, it's nothing more than greed. These idiots think that not showing 20% quarter-by-quarter increases in profits is a sign of failure.

[TahitiNut]

23. It's the argument of "owners" ahead of "workers" ...

This is the corruption that infests our perverted 'capitalist' system -- that it's OK to fuck over the people who create the wealth in order to line the pockets of the "owners" who live off the labor of others.

The constant myopic drumbeat of impoverishing the working class so the indolent wealthy can buy a fancier gas-guzzling foreign car is driving this nation below banana republic conditions.

It's plantation economics ... the basis of colonialism itself. It's no accident that 17th century thinking predominates in government today.

[Deja Q]

13. Costco too benevolent or the others too EVIL?

God, we live in such a sick twisted fuck of a "society"...

[Ishoutandscream2]

39. Ain't that the truth

I could not get over this article. It was so Mr. Potterish from "It's a Wonderful Life." I can just see George Bailey replying, "Doesn't it make them good citizens, good customers..."

Tell me again, what century do we live in?

[Beware the Beast Man]

15. Even better reason to buy, buy, buy!!!!

I love Costco.

[Career Prole]

17. Unreal...another article last year in the WSJ had the same theme.

Are the media after Costco too?

From March 2004 WSJ...
But Costco's kind-hearted philosophy toward its 100,000 cashiers, shelf-stockers and other workers is drawing criticism from Wall Street. Some analysts and investors contend that the Issaquah, Wash., warehouse-club operator actually is too good to employees, with Costco shareholders suffering as a result.

"From the perspective of investors, Costco's benefits are overly generous," says Bill Dreher, retailing analyst with Deutsche Bank Securities Inc. "Public companies need to care for shareholders first. Costco runs its business like it is a private company."

http://online.wsj.com/article_email/0,,SB108025917854365904-INjeoNplaV3oJ2pan2IbauIm4,00.html
(subscription required)

[Beware the Beast Man]

I really see this as an attempt to shake investor confidence

On the part of the WSJ and its backers. More people should be tipped off to Costco's good ethics. This can only help them in the long run.

[blondeatlast]

35. Exactly. nt

[mondo joe]

21. Funny how he says investors aren't happy - Costco stock did well, and

the investors always have the option to exert some control if they're that unhappy.

[blondeatlast]

34. Think of it this way--they are turning the industry inside out. I spent

many years in retail, and as is well known, it's a pink collar ghetto for the most part.

In comes an interloper who has premium brands, low prices, good service, and good relations with employees--and is continuing to INCREASE its profit margin.

This makes the rest of 'em look completely incompetent. They can't have that. I remember when Southwest Airlines was an upstart (another company with excellent employee relations, I have fa,ily/friends who are very loyal). they pretty much said the same thing in much milder terms.

Now look at who in the airline industry is making a consistent profit, and who is losing money--fast.

Costco and Southwest are good businesses that are bad, bad, bad for business in general.

[nicknameless]

19. Costco's CEO: Current corporate pay disparity "is wrong."

"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."

[The Traveler]

24. Oh my Gods

A capitalist who gets it.

[The Traveler]

20. Costco has just won a new customer

Splendid. Bravo. A value system not based on pure corporate greed in operation in business. Yes. I will spend my money there.

[Disturbed]

26. Costco is a great example of how customers and employees..

should be appreciated. Most Corps have the "Piss on them tude." Just like the RW has about most Amerikans that aren't wealthy.

[sakabatou]

22. That's right people!

No company wants happy customers or employees unless they want less income!

[tk2kewl]

25. Less for the people who do the work

more for the crooks

[tommcintyre]

29. Let them know you appreciate their efforts:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x140889#140928

[Snotcicles]

30. I have not set foot in a stinking Wal-Mart in six years, after the good

things i have been hearing about Costco lately I will be seeking one out
and start taking my business there.

[Pawel K]

31. Here in ABQ Sam's Club is openning right next to Costco

I hope Sam's Club is ran out of there quick.

[hippiegranny]

32. Costco rocks

and they're scaring the pants off the old boy network. HA ha.

[progressivebydesign]

36. I LOVE Costco!! I haven't set foot in a Walfart in years! ha! n/t

[tinrobot]

37. Costco is a HAPPY place....

You walk in and it feels nice. Maybe it's because the employees want to work there. They're also very helpful. I love going to that place.

Constrast that to a store like Wal Mart where the employees throw daggers at you for asking a question.

I also buy my gasoline at Costco. I figure if I'm going to give big oil my money, Costco might as well skim some off the top so they can use it for progressive causes rather than oppressive wars.

[1984ever]

38. I think I might have to go get my Costco card this weekend.

n/t

[bear425]

40. I used to work for Costco, years ago. It's a great company

and I'm thinking of going back. The pay rate is extremely fair and the benefits, too. Very little attrition due to employee happiness. If you have a location near you, get a card. It's well worth it for the savings.

[Occulus]

41. I'd like to heave a big ol' FUCK YOU to some Wall Street analysts

Just gratuitously, you see. They deserve that much.

[YOY]

42. How dare anyone...

realize the cost of living for the average working person! The pinstripes say DAAAAAMN YOU COSCO!!!!

:sarcasm:

[proud patriot]

43. which is why I shop there

:hi:

[Tux]

44. Mmmmm

Seems like a winner to me. Think they would mine hiring a computer/network technician with a bachelor's in psychology?