I thought market forces were about just that - if you do well in the market you are presumably doing something right. However it seems that it isn't enough to be doing well, to have a better P/E ration than your competitors and to have a higher share price. Oh no...
Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. 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."
The owner of Costco has a nice riposte however...
"On Wall Street, they're in the business of making money between now and next Thursday"
And heaven forbid that companies should look after their customers...
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."
[via City Comforts]
