My Costco Card lapsed back when I stopped drinking, but I am going to renew it this weekend. Because of this man. One of the good guys. Job Creator. The anti-Romney. The Good CEO. Patriot. Called The Sam Walton of the 21st century for his humility and seeming defiance of all things Wall Street, Jim Sinegal is the recently retired CEO of Costco, where he played a major role in building the discount store into the third-largest retailer in the country.
I feel an affinity for Jim Sinegal because, like my Dad, he was placed in an orphanage when his folks were too poor to take care of him. Born in Pittsburgh, he has made a point of acknowledging the role “government” played in his success, through the public school system, Junior College in San Diego and later San Diego State. It was at SDU where he says he and his fellow students looked to the just-returned Korean War veterans for inspiration:
“These were people who had seen so much who had been matured by the war. We learned a lot by how they carried themselves”.
At Costco, Jim created a model that rewards workers handsomely, offering well above-average pay for warehouse-store workers, even while competitors cut benefits, resulting in low turnover and a family feeling to the company. Jim came to work every day proudly wearing one of Costco’s $17 dress shirts. His office was in the hallway at Costco’s Issaquah headquarters, where his door was always open to the rest of the staff. His desk was a Formica-topped folding table, a Costco sale item and he has been known to give employees his cell phone number.
By all accounts, despite commanding a $76 billion retail empire, Sinegal remained humble, principled, honest, and down-to-earth, with a voluntarily low salary and bonus that equaled only about twice that of one of his store managers. He is an anomaly in a corporate world filled with ruthless business practices, gold encrusted staplers, bloated executive compensation and unethical dodges.
Disliked by Wall Street investors and analysts because of his insistence that adequate employee compensation was good for business, his critics accused him of being too generous to his employees while others countered that Costco’s generous compensation structure actually increased productivity and reduced loss due to turnover and theft. Jim Sinegal viewed the sizable salaries as a way to build a consumer base. In 2004 he told the Los Angeles Times:
“I don’t see what’s wrong with an employee earning enough to be able to buy a house or have a health plan for the family. We’re trying to build a company that will be here 50 years from now”.
Sigh. With every word this man becomes more and more attractive. He has a lot of praise for President Obama, in particular for saving the U.S. auto industry and its hundreds of thousands of good jobs. He cites the auto “bailout” as an example of the idea that prosperity flows from the consumer spending of the middle class, not the fortunes of the rich.
“It doesn’t do any good for Costco to have the lowest price on a 70-inch TV set if nobody can afford to buy one”.
Marry me, you benevolent silver fox.