business news in context, analysis with attitude

• The Puget Sound Business Journal has a story pointing out that “Costco Wholesale Corp. CEO Craig Jelinek made 191 times more than the Issaquah-based company's median employee, according to a proxy disclosure filed Monday … Jelinek's compensation in the year prior to June 29, 2018 included an $800,000 salary, a $97,000 bonus, nearly $6.3 million in stock awards, a $107,000 change in pension value and $107,000 in other compensation including retirement contributions, life insurance and use of a company car.

“Costco's median employee – including full-time, part-time, seasonal and temporary employees – made $38,810 in the same period. Jelinek makes 150 times than the median full-time employee, which made $49,288 in 2018.”

The story makes the point that this is the first time that Costco has disclosed this ratio “since it became required under the Dodd-Frank Wall Street Reform and Consumer Protection Act.”

There seems to be an implied criticism of Jelinek in this piece. Though it doesn’t make the comparison, if I recall correctly - and I couldn’t find the actual numbers while doing a quick online check this morning - one of the things that Jelinek’s predecessor, Jim Sinegal, was know for was a tight ratio between his salary and that of Costco’s media employee. Sinegal, if I recall correctly, never had a salary higher than $350,000 a year, though he clearly did much better than that through stock and bonuses. To be clear, though, Costco’s employees seem to be making a decent wage, and I admire companies that are transparent about wage disparities.)

• The Houston Chronicle reports that H-E-B has opened a Joe V’s Smart Shop, its value-driven banner, in the Pasadena neighborhood of Houston; it is the ninth Joe V’s that the company has opened since 2010.

H-E-B promotes the Joe V banner as having prices that are between 15 and 20 percent lower than the local competition.

• The Milwaukee Journal Sentinel reports that “Green Bay-based retailer Shopko has sold another chunk of its pharmacy business, this time to supermarket chain Hy-Vee Inc,” selling it “the business of 22 Shopko pharmacies in Wisconsin, Iowa, Illinois, Minnesota, Nebraska and South Dakota … The acquisition comes just days after Kroger Co. said it was buying the pharmacy files at 42 Shopko locations, including 25 in Wisconsin.”

The story notes that “Shopko has more than 300 stores in the central U.S., West and Pacific Northwest. Formerly a public company, Shopko was purchased in 2005 by Sun Capital Partners Inc., a private equity firm based in Boca Raton, Florida.”

• The Puget Sound Business Journal reports that the Bellevue Square shopping mall in Bellevue, Washington, cannot force Whole Foods to keep its ‘365 by Whole Foods’ store there open.

Amazon-owned Whole Foods shuttered the store more than a year ago because of underperformance, “claiming unspecified challenges at the site prevented the successful operation of a grocery store.”

Bellevue Square sued, “attempting to enforce terms in the lease that require the Whole Food store to conduct business without interruption for at least 10 years.”

A Washington State appeals court ruled this week that a provision in the lease that allowed Whole Foods to pay rent and penalties without actually operating the store was an “adequate remedy” for the mall.
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