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Bloomberg has a story about how a closing of the proposed $13.7 billion acquisition of Whole Foods by Amazon also is likely to "mark the end of one of the most reasonable - perhaps the only reasonable - executive compensation schemes in America."

The story goes on: "No one will cry for Whole Foods CEO John Mackey, of course. Forbes estimates his net worth at $76 million. The Amazon deal made him $9 million richer practically overnight. That nine-figure payout is one most Americans will never see. But it should also be noted that in America’s executive suites, a nine-figure payout — especially when a megadeal like Amazon-Whole Foods is involved — is just as rare. They are usually much, much higher." Especially when one compares his payout to that of Yahoo CEO Marissa Mayer, who after five years of almost complete failure in the role "pocketed nearly a quarter of a billion dollars."

Mackey's "entire payout comes from the fact that Mackey is, like many others, a Whole Foods shareholder. He will receive no merger bonus. No golden parachute will deploy. There are no options to vest. Mackey hasn’t be granted one in more than a decade." In fact, "Mackey’s public stance against excessive executive pay is well-known," and "no executive at the company is allowed to be paid more than 19 times the average worker’s salary."

On this one, I am completely in synch with Mackey's reasoning, and I think the Mayer payout is nothing short of obscene. That said, they won't be adjusting Amazon's compensation program to match Whole Foods', I expect.


Fast Company reports that Whole Foods CEO John Mackey apparently is convinced that a takeover by Amazon will not impede his company's approach to "conscious capitalism," which he defines as when a "firm has a purpose beyond profit," and that "gives precedence to its workers, vendors, customers, and community as much as shareholders, thus creating a holistic interdependence."

Selling to Amazon, the story suggests allows Mackey "to preserve some of these values, instead of being chewed up by Wall Street or being chewed up by a rival."

But "for all his genius in building a 460+ store network and generating more than $8 billion a year," the magazine writes, "Mackey ultimately failed to square the needs of shareholder capitalism with the needs of conscious capitalism. And the future of Whole Foods, now in the hands of a quite different company, is uncertain."

It isn't like Jeff Bezos consistently bows to the needs and demands of shareholders. But ... it will be really interesting to see how much of Whole Foods' culture will be intact in just a few years.


Bloomberg has a story about how the Amazon-Whole Foods deal may affect Target, which "has been losing shoppers despite an expanded food offering that includes more fresh produce, gluten-free and organic products, and grab-and-go items. Now Target will likely face a reenergized Whole Foods that’s backed by a deep-pocketed parent-to-be already challenging the company in apparel and beauty products." Target, the story suggests, "stands to fare even worse once Amazon applies its digital know-how—pricing algorithms, customer-preference data, free shipping—to Whole Foods’ portfolio of antibiotic-free meats, organic kale, and hopped-up craft beers."

There may be a bigger problem for Target, Bloomberg writes: "Perhaps most worrisome for Target is that its customers are also fans of Whole Foods and Amazon. Almost 1 in 4 of Target’s grocery shoppers also shops at Whole Foods, according to consultant Magid, compared with fewer than 1 in 10 for Wal-Mart and supermarket chain Kroger Co. More than two-thirds of moms aged 27 to 51 who shop at Target also use Amazon Prime, vs. 42 percent of all consumers."

Target ought to outsource its grocery operations to Amazon/Whole Foods in the same way that it has outsourced its HBC/Rx business to CVS. Might be a real game-changing combination...
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