Published on: April 20, 2022
Got the following email from an MNB reader about our continuing coverage and commentary about labor issues facing retailers:
The dynamics in today's labor world are certainly interesting, especially the unionization movement. Along with that is the focus on CEO compensation, specifically how it dwarfs basic employee compensation. In the CNBC piece you mentioned, the fact that 85% of CEO comp derives from stock performance is important. I'm more or less OK with CEO's being compensated by the increase in their company's stock price, because they're the ones driving that performance from the top. Obviously the entire "team" has to contribute, and presumably many employees well below the executive suite also share in stock performance compensation.
Tangentially, I've been reading recently about star baseball players' contract negotiations. Several have recently turned down annual comp of $20mm, most if not all of which is guaranteed. I'm only guessing, but I'll bet that number is about 254 percent greater than the average MLB team employee, like the locker room attendant, team nutritionist, groundskeepers, etc.etc. All of whom get a share of playoff and World Series money when their team does well. Fair? Not fair? The star players, like the "star" CEO's, are the ones driving the success, right?
I'd challenge your presumption that "many" employees well below the executive suite share in stock performance compensation. I'm not sure that's true, and I certainly don't think that it is a standard part of their compensation packages. But if you tell me that the ideal company is one in which the proceeds of an improved stock price are shared with all employees, I'm not going to argue.
One thing, though. A stock price is not necessarily indicative of how effective a company is in achieving long-term goals and implementing strategies and tactics. It is indicative of how investors feel about the company, and their interests tend to be short-term (hence Jeff Bezos telling investors from the beginning that if they wanted a short-term profit, they should put their money elsewhere). I like the approach that Costco's Jim Sinegal used to take - despite the entreaties of investors and analysts, he refused to raise margins and lower wages, figuring that neither would be good for the company long-term, and that he was leading for the stakeholders, not the shareholders.
As for baseball players … I think that, relative to their contribution to society, they're generally way overpaid. So are movie stars, for that matter. I tend not to get as verklempt about it here because a) I'm writing mostly about retailers, and b) they're being paid their millions by people who have billions. (That said, I generally was pro-player in the recent lockout, if forced to choose a side.)
I'm also not sure that it is a completely fair comparison to retailing, since the players actually are ther ones on the front lines when it comes to professional sports - they're not the owners/CEOs. But if your argument that support staff personnel needs to be paid more
From another MNB reader:
Listened to your podcast about corporate disconnect, then strolled down to the CNBC piece about the CEO/Employee pay gap started to widen again. Hmmm.
MNB reader Joe Axford had this reaction:
All your key points today are so true, and I have to say that Hannaford is one company that gets it right. I feel like an important asset working there, and not a liability, like some other companies. I am proud to be a valued associate at Hannaford, and they deserve this shout out!
Yesterday we posted an email from an MNB reader about the story focusing on the Dollar General store manager, Mary Gundel, who loved her job but was frustrated by working conditions and lack of support from leadership; she decided to air her frustrations on TikTok, and promptly got fired.
The MNB reader wrote, in part:
Let's look honestly at the employee. Accept the things one cannot change and change the things one can. (Resign.) What does it have to do with anything or anyone else? Another person might have been practicing acceptance each and every day in the face of such challenges and worked towards ideals, never wavering in the face of such insurmountable odds. Just because this person didn't like the working conditions doesn't mean the company is wrong or bad…
Which prompted another MNB reader to write:
The first commenter today on DG by the words she used it was obvious she was saying Mary Gundel should have applied the "Serenity Prayer", and everything would have been ok!
I knew that the phrasing in the original email rang a bell … and you're right, it is remarkably similar to the Serenity Prayer, which starts out this way:
God grant me the serenity to accept the things I cannot change, courage to change the things I can, and the wisdom to know the difference…
The thing is, Mary Gundel did know the difference, and endeavored to create change.
That said, the Serenity Prayer also suggests that a person should take the world … one day at a time; enjoying one moment at a time; taking this world as it is and not as I would have it; trusting that You will make all things right if I surrender to Your will; so that I may be reasonably happy in this life and supremely happy with You forever in the next.
To be honest, I'm not big on surrendering to anyone's will. I'm sort of more in line with the motto of The Christophers:
"It's better to light one candle than to curse the darkness."
Mary Gundel, in my view, tried to light a candle. Good for her.
The other day, I offered a hostile assessment of a proposed California law that would mandate a four-day work week. In retrospect, I should've been clearer about something - that I'm totally okay with the idea of a four-day work week. I just think that companies ought to offer it because they believe it will be good for their employees and productivity, not because it is foisted upon them.
I also had an exchange with another MNB reader, who write:
Congratulations Kevin, you are starting to sound like a true conservative. Welcome to the land of logical and level headed thinking.
To which I responded:
I am conservative about some things, liberal about others, and like to think that I actually relatively centrist and open-minded about most issues … But the only "true" thing I am is skeptical about anybody who thinks their way is the only logical and level-headed approach to anything.
Another MNB reader reacted:
Boom! Mic drop.
But I missed an opportunity. I should've added what else I believe in … the soul, the small of a woman's back, the hanging curve ball, high fiber, good scotch, that the novels of Susan Sontag are self-indulgent, overrated crap. I believe Lee Harvey Oswald acted alone. I believe there ought to be a constitutional amendment outlawing Astroturf and the designated hitter. I believe in the sweet spot, opening your presents Christmas morning rather than Christmas Eve and I believe in long, slow, deep, soft, wet kisses that last three days.
But I don't believe in dogma. Nobody's.