Wall Street curls its lip at Costco's ungreedy CEO

[GAspnes]

Not that the case is ordinarily phrased this way, but everyone who has been paying attention knows that for the past two decades the United States has pursued a reorganization strategy modeled on the two-caste system popular in banana republics and other Third World oligarchies. The push is toward a society with a handful of extremely rich people, a teeming mass of peasants and very little in between.

<snip>

Shrinking incomes, crappy jobs, crappy service, reptilian companies. Class-warfare agitators blame it all on greedy executives, sellout politicians and Wall Street. Executives, politicians and Wall Streeters blame it on the "global economy," this being a manifestation of divine will and thus impervious to human intervention.

<snip>

In a single paragraph tucked matter-of-factly into Fortune's hymn to Sinegal and his company, as if it were one more piece of incidental data, we learn that "some of the practices that made Costco great have lately come under attack by Wall Street." What the complaint boils down to is that Sinegal is too generous to the peasants. Stock analysts have "pounded on" him to trim workers' health benefits "and to otherwise reduce labor costs." The critics' view is summarized by "Deutsche Bank analyst Bill Dreher, who recently wrote, 'Costco continues to be a company that is better at serving the club member and employee than the shareholder.' "

<snip>

Well worth reading.

http://www.startribune.com/stories/1519/4276361.html

[trotsky]

1. What a great article!

Although I've been maintaining my Wal-Mart boycott, I must confess that we've kept our Sam's Club membership. Buying in bulk really does help the family budget.

I had held off even looking at Costco because I figured they were all the same. Well the heck with that, I'm going to switch my membership.

[cosmicdot]

2. I'll look into one locally

... Costco-inization of the economy vs. WalMart-inization deserves support as a 'best practice' for success ...

typical good ol'boy tactic when one doesn't 'fit the mold' ... seek and destroy w/character assassination and such

[DBoon]

3. My wife LOVES Costco

Bargains, bargains everywhere. Massive warehouse stores with pallet sized boxes of goodies.

Ever spend an afternoon freezing a pallet of Costco muffins (enought for the next 6 months)?

[chelives]

5. Loves Costco

Costco sells more flippin muffins than the average family could possibly eat. Yet 20 million starving children are in this world, includeing the U.S. But Cuba is evil where not one of those starving children live on the island and there is no worker exploitation, things that make you go HHHMMM...

[mastein]

4. Let's think about that statement by Dreher

If the company is serving its employees, they will have long term stability in their labor market, develop a tremendous institutional memory which will help them as they expand and will also get more productivity from each employee if the employees are motivated. That is all basic Organizational Psych.

Hmm, and if the company is serving its consumers, they just might build customer loyalty and trust allowing them to. . . yes, you guesssed it: expand.

So this "analyst" is telling the company to put short term gains ahead of a well reasoned business plan that will generate long term stability and growth for the company... No wonder he gets the big bucks. I only hope he "invests" as well as he analyzes. He will be in a barrel on the street in a week.