Costco’s Dilemma: Be Kind To Its Workers, or Wall Street?
“When it comes to workers, companies can be accused of not paying enough ó or paying too much. Wal-Mart Stores Inc.’s parsimonious approach to employee compensation has made the world’s largest retailer a frequent target of labor unions and even Democratic presidential candidate John Kerry, who has accused the Bentonville, Ark., chain of failing to offer its employees affordable health-care coverage. In contrast, rival Costco Wholesale Corp. often is held up as a retailer that does it right, paying well and offering generous benefits. But Costco’s kind-hearted philosophy toward its 100,000 cashiers, shelf-stockers and other workers is drawing criticism from Wall Street. Some analysts and investors contend that the Issaquah, Wash., warehouse-club operator actually is too good to employees, with Costco shareholders suffering as a result.”