retail news in context, analysis with attitude

Got the following email from MNB reader Cynthia Fisher, regarding the point I keep making here about CEOs who make sometimes outlandish salaries, and even get rewarded for driving down labor costs in stores where employees are on the front lines of making those units successful:

With all due respect to the points made about high salaries for CEOs vs those of their employees, I think some balance is needed in the conversation. How many employees of a company have the complete responsibility of that of a CEO, especially a CEO of a publicly traded company? There is a huge point, not being mentioned, about the respective responsibility and accountability of a CEO vs that of an employee. As an employee I do my job and walk away at the end of the day. As a CEO, everything is laid at his or her feet with regard to all aspects of the company including, but not limited to, employee safety and job security, company marketplace viability and the financial solvency of the entire organization as well as the value to the stockholders. Stockholder investment makes possible the creation of companies and the subsequent jobs for those employees.

The media enjoys their national drama campaigns promoting the picture of all these poor employees being unfairly treated while fat-cat CEOs enjoy the lavish life. That’s really an unfair and over-generalized assessment and with a little research into the daily life any CEO running an organization, large or small, it would unravel that fairytale. We need to stop vilifying and creating divisiveness between those who take on risk and responsibility against those who choose to settle for a paycheck. Long gone are the days of workers being mistreated in sweat shops in the U.S. Our laws and the work of labor unions have made it more than fair for employees to work in this country and no one has to work for a bad or unfair CEO - we all have choices. Of course there are bad, undeserving CEOs just as are there bad, undeserving employees. With today’s journalist continuously on the hunt for anyone successful whom they can destroy with a tweet or a post, and usually with little factual content to back up the whole story, we have made it a crime to be successful. I challenge anyone who has not done so, to go out and start a business, risk everything financially, work through the sleepless nights and stress of the multitude of issues that plague owners, CEOs, presidents, etc., of any company, small or large. Trust me, it’s a much better life punching a clock and walking away at 5:00 to enjoy your evening. And in fairness, I believe most companies pay their CEOs and employees based on that difference of responsibility and value added to the success of the organization. I’m not a CEO; I’m a mid-level manager, but I believe my CEO is severely underpaid for the weight placed on his shoulders every single day he is responsible for and to his employees and his shareholders whose jobs and investments are secured or risked by his decisions. That’s a heavy load to bear alone and for this responsibility these leaders, job creators and economic drivers should be well compensated. If we are going to have this discussion, let’s make sure we tell the whole story with all the facts. If you haven’t worn the shoes, it’s unfair speculation to criticize and make general judgements.

Thank you for taking the time to read my viewpoint. We, as American business leaders and generators, can and should do better. We should want to encourage others to become entrepreneurs and help create companies and jobs that will keep our economy strong and make it possible for all to prosper. We need companies both large and small to accomplish this. I challenge any employee to learn what it takes to be a CEO and reach for that goal. That knowledge alone will make them more valuable as employees. No one is appointed CEO to a company worth mentioning without first having been tested by fire and having earned it. Who among us, quick to criticize, is up for that test?

While I have a problem with the sometimes outlandish salaries, in the end I think CEOs ought to make pretty much whatever the market will bear ... my bigger issue is when these same CEOs will not acknowledge and adequately reward the people at store level who are responsible for making the shopping experience a pleasing one.

Few shoppers know who the CEO is when they walk into a supermarket ... but they probably know who the good checkout people are, or who the people are behind the seafood counter, or who bake the fresh rolls. Those people, I would argue, are extraordinarily critical to a retailer's success ... and I think that's the same argument that Jim Sinegal would've made when he ran Costco, and Howard Schultz of Starbucks would make now.

I think smart CEOs know that while they may bear the ultimate responsibility for their company's success, they also know that they only are as successful as the people on the front lines make them.

Now, concerning a related commentary - my suggestion that if Haggen is to have any chance at succeeding, it needs to hire a rock star CEO who can instantly change the culture and push the company in a viable direction through force of personality - MNB reader Robert Hemphill wrote:

Hey, would you support paying the “retailing superstar” a premium financial package?  Might need to do so, and it might be the best investment you could make.

Again ... I have no problem with premium financial packages. But if it were me, I'd immediately tell the folks working in the stores - all of whom have to be feeling vulnerable and insecure at this point, without a lot of hope for the company's future - that we're going to sink or succeed together, and that if we succeed, they will share in the financial profits. It would be my goal to get every employee to feel engaged, and to have a palpable sense of ownership.

And that could be the best investment the company would make.

Also, regarding Haggen, another MNB reader wrote:

Have you seen the pricing structure at Haggen??  Every week their ads come out and they get beat up…I mean beat up.  Don’t get me wrong, I appreciate the look and feel of Haggen but they need to be more than competitive and they haven’t been out of the gate. Try being competitive first and I believe customers will come.

The big question is whether customers will come back ... since so many of the ones who had an initial negative impression will have to be persuaded to give the company a second chance.
KC's View: