culture, politics, commentary, criticism

Monday, February 12, 2007
Don't it make your red eyes blue. We've said it before and we'll say it again: Red is bad for business, blue is good for business. When it comes to the average American's investment in a 401(k) plan, say, the Bush administration's approach loses money while Clinton's made it. We see this in the markets at large, but we see it pointedly in narrower examples, like the very blue Costco versus very red Wal-Mart. Why? Because a more enlightened, less greed-driven, holistic approach to capitalism is a long-term economic stimulus (
Costco is one of a handful of retailers that has flourished despite Wal-Mart Stores' (WMT) onslaught; Wal-Mart's more downscale Sam's Club chain runs second to Costco. With its strong labor relations, low employee turnover and liberal benefits, Costco has been called an "anti-Wal-Mart." Its approach has paid dividends, because Costco, based in Issaquah, Wash., hasn't encountered the same community resistance as Wal-Mart when it has sought to open new stores. [...]

[Jim] Sinegal, 70, also is one of the biggest bargains among big-company CEOs: In an era of seven- and eight-figure pay packages for CEOs, Sinegal earned a salary of $350,000 in Costco's latest fiscal year, which ended in August. He garnered other compensation of about $100,000.

What's more, Sinegal got no bonus last year, after the company determined that it failed to measure properly the appropriate date for certain option grants from 1996 to 2002, although no evidence of fraud or falsification of records was found. "Jim wouldn't let the board give him a bonus. His view was that the option glitch happened on his watch," Munger says. "How many people behave like that? No wonder everyone loves him."

Unlike Buffett, who draws a salary of just $100,000 as CEO of Berkshire, Sinegal isn't a billionaire. He owns Costco stock worth about $135 million and has options on 1.2 million shares.

Sinegal's compensation and demeanor offer a welcome contrast to former Home Depot chief executive officer Robert Nardelli, who alienated employees with his autocratic style and whose gargantuan exit package of $210 million didn't sit well with shareholders. Costco and Home Depot were two of retailing's biggest success stories in the 1990s, but Home Depot has since lost its way while Costco's growth has continued unabated.
Sounds good, but does it pan out in the value of the stock? Five years ago your investment in Wal-Mart would have lost 20 percent, while your investment in Costco would have gained 20 percent. Quite a spread, reminiscent of the Bush deficit versus Clinton surplus, wouldn't you say?

Costco is blue; Wal-Mart is red. Compare Wal-Mart's slow decay versus Costco's healthy growth.

Greatest Hits · Alternatives to First Command Financial Planning · First Command, last resort, Part 3 · Part 2 · Part 1 · Stealing $50K from a widow: Wells Real Estate · Leo Wells, REITs and divine wealth · Sex-crazed Red State teenagers · What I hate: a manifesto · Spawn of Darleen Druyun · All-American high school sex party · Why is Ken Lay smiling? · Poppy's Enron birthday party · The Saudi money laundry and the president's uncle · The sentence of Enron's John Forney · The holiness of Neil Bush's marriage · The Silence of Cheney: a poem · South Park Christians · Capitalist against Bush: Warren Buffett · Fastow childen vs. Enron children · Give your prescription money to your old boss · Neil Bush, hard-working matchmaker · Republicans against fetuses and pregnant women · Emboldened Ken Lay · Faith-based jails · Please die for me so I can skip your funeral · A brief illustrated history of the Republican Party · Nancy Victory · Soldiers become accountants · Beware the Merrill Lynch mob · Darleen Druyun's $5.7 billion surprise · First responder funding · Hoovering the country · First Command fifty percent load · Ken Lay and the Atkins diet · Halliburton WMD · Leave no CEO behind · August in Crawford · Elaine Pagels · Profitable slave labor at Halliburton · Tom Hanks + Mujahideen · Sharon & Neilsie Bush · One weekend a month, or eternity · Is the US pumping Iraqi oil to Kuwait? · Cheney's war · Seth Glickenhaus: Capitalist against Bush · Martha's blow job · Mark Belnick: Tyco Catholic nut · Cheney's deferred Halliburton compensation · Jeb sucks sugar cane · Poindexter & LifeLog · American Family Association panic · Riley Bechtel and the crony economy · The Book of Sharon (Bush) · The Art of Enron · Plunder convention · Waiting in Kuwait: Jay Garner · What's an Army private worth? · Barbara Bodine, Queen of Baghdad · Sneaky bastards at Halliburton · Golf course and barbecue military strategy · Enron at large · Recent astroturf · Cracker Chic 2 · No business like war business · Big Brother · Martha Stewart vs. Thomas White · Roger Kimball, disappointed Republican poetry fan · Cheney, Lay, Afghanistan · Terry Lynn Barton, crimes of burning · Feasting at the Cheney trough · Who would Jesus indict? · Return of the Carlyle Group · Duct tape is for little people · GOP and bad medicine · Sears Tower vs Mt Rushmore · Scared Christians · Crooked playing field · John O'Neill: The man who knew · Back to the top

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