If you have ever wanted to see the evil, exploitative face of the overclass, look no further than this article on Costco:
"They could probably get more money for a lot of items they sell," said Ed Weller, a retailing analyst at ThinkEquity.
IF shareholders mind Mr. Sinegal's philosophy, it is not obvious: Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19. Mr. Dreher said Costco's share price was so high because so many people love the company. "It's a cult stock," he said.
Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco's workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent.
"He has been too benevolent," she said. "He's right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden."
Mr. Sinegal says he pays attention to analysts' advice because it enforces a healthy discipline, but he has largely shunned Wall Street pressure to be less generous to his workers.
"When Jim talks to us about setting wages and benefits, he doesn't want us to be better than everyone else, he wants us to be demonstrably better," said John Matthews, Costco's senior vice president for human resources."
This is a company that makes money hand over fist. They have a steady-growth stock. They give consumers a good value. The CEO makes only about $500K per year (which is, believe it or not, frugal). In other words, everyone's happy. And the response from the analysts is to ask why he can't squeeze his workers harder.
In the 1800's, these guys would have been asking if it's not possible to beat the slaves just a bit more.