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CEO Donates His $3.6 Million Bonus to Employees
By Ashley Lutz | Business Insider – 5 hours ago>Lord Wolfson, Chief Executive of Next (Ben Gurr - WPA Pool/ Getty Images)The CEO of British retailer Next decided to donate his multi-million dollar bonus back to employees.
Lord Wolfson's bonus was £2.4 million, or about 3.6 million U.S. dollars, Telegraph UK reports.
Employees who have been with the retailer since June 2010 or longer will get 1% of their salary. That means that the average clerk, who makes about $30,000, would get $300.
Wolfson called the act "a gesture of thanks and appreciation from the company for the hard work and commitment you have given to Next over the past three years and through some very tough times," the Telegraph reported.
Next, a clothing and department store company, dealt with declining sales over the past several years as consumers reigned in spending.
But Wolfson was able to execute a turnaround, and today the store is doing great.
Perhaps his gesture will inspire other high-powered CEOs to do the same.
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Permalink Reply by ProblemAgain on
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there was a plant in the northeast in a small town(i think it was in maine)...and the plant burned down....the owner of the company kept his employees on payroll while the plant was rebuilt. he was quoted as saying 'they are my most valuable asset' you KNOW that those employees will do whatever it takes to make that company re-emerge successfully...enlightened selfinterest...what is good for your employees can be even better for the company
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funny how it seems to work if you look at the big picture...
Walmart Pays Workers Poorly And Sinks While Costco Pays Workers Well And Sails-Proof That You Get What You Pay For
38 comments, 11 called-outComment NowFollow Comments
A protest in Utah against Wal-Mart (Photo credit: Wikipedia)
Costco’s most recent quarterly earnings report reveals a fairly healthy eight percent rate of growth in year-on-year sales—including a five percent rise in same store sales. What’s more, with membership fees rising from $459 million in the same quarter last year to $528 million this year, it’s pretty clear that a significant number of customers are moving over to the retailer to do their discount shopping.
Meanwhile, Costco’s primary competitor, Walmart, saw an anemic 1.2 percent rise in sales, while other competitors such as J.C. Penny and Target TGT +0.29% experienced even greater disasters in their sales results.
In an identical economy, how do we explain Costco’s growth vis-à-vis the failures over at Walmart?
Here’s a crazy thought—might it have something to do with the fact that Costco pays nearly all of its employees a decent living (well in excess of the minimum wage) while Wal-Mart continues to pay its workers as if their employees don’t actually need to eat more than once a week, live in an enclosed space and, on occasion, take their kids to see a doctor?
And just in case the occasional Walmart employee finds a way to squeak by, the company has sought to put an end to that by cutting their employment roles by 1.4 percent, even as they increased their store count by thirteen percent.
The result?
Walmart service now pretty much sucks—and customers don’t like it.
Without enough employees to get the basic work of a retail operation done—and with those on site being paid a wage so low that it is difficult to expect much in the way of pride or motivation—Wal-Mart merchandise remains stacked on pallets in the warehouse rather than making it to the floor where customers can find the products they want. At the same time, check-out lines are painfully long and annoying as the overall shopping experience continues to deteriorate.
One is left to wonder about the value of offering products at a lower price if those products are not on the shelves when the customer needs to buy them?
“Wal-Mart Stores WMT -0.18% (WMT) has been cutting staff since the recession—and pallets of merchandise are piling up in its stockrooms as shelves go unfilled. In the past five years the world’s largest retailer added 455 U.S. Walmart stores, a 13 percent increase, according to company filings in late January. In the same period its total U.S. workforce, which includes employees at its Sam’s Club warehouse stores, dropped by about 20,000, or 1.4 percent.” The article continues, “A thinly spread workforce has other consequences: longer checkout lines, less help throughout the store, and disorganization. Last month, Walmart placed last among department and discount stores in the American Customer Satisfaction Index, the sixth year in a row the company has either tied or taken the last spot. The dwindling level of customer service comes as Walmart has touted its in-store experience to lure financially strained shoppers and to counter the threat from online rivals such as Amazon.com AMZN -1.86% (AMZN).”
Harold Myerson writes in a terrific piece published in today’s WashPo—
“One lesson that emerges from the experience of low-end retailers is that putting workers in crummy, low-wage jobs tends to yield crummy service as well. McDonald’s earnings have fallen, the Wall Street Journal reports, and a management webcast to franchise owners acknowledged that customer dissatisfaction is rising in part because “service is broken.” Myerson adds, “Some of the most successful retailers follow a different path. As MIT management professor Zeynep Ton argued in Harvard Business Review last year, Costco and Trader Joe’s pay their workers far more than many of their competitors, offer their employees opportunities for promotion and enjoy markedly lower worker turnover and far higher sales per employee than their low-road counterparts. Sales per employee at Costco are nearly double that at Sam’s Club.(emphasis added)”
As the old saw goes, you get what you pay for. Costco pays their employees a livable wage and gets sales per employee at double what Walmart subsidiary Sam’s Club gets from their employees who work for lousy pay.
Maybe the time has come for Wal-Mart to take a lesson from Costco and consider the potential upside of treating employees like human beings.
It might just prove to be good for business.
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Rick Ungar 
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Permalink Reply by Lifesighs on
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I have worked for 2 different companies who believed this way and made sure the employees were not only well paid but had other perks besides in benefits and bonus checks. The turnover in employees was minimal so costs of training and lost knowledge stayed low.
When I left the 2nd company to move west I convinced my son to apply for a job there and leave his other job, he did and he is currently still working there 23 years later. He met his wife who also works at the company she's been there for 25 years now. No lay offs, bonus every year, company picnics and parties and good health benefits when I worked there they reimbursed any deductables paid. It is like a family atmosphere, they have problems from time to time like any business but the employees pitch in because it means something to them to have success.
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taaadaaaa...enlightened self-interest....it really works out well for all sides. the company has skilled and dedicated employees...the customers get absolutely topnotch help and service...so they LIKE coming back to that business...they feel appreciated because they are appreciated...and increased revenues grow the top compensation too....
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Permalink Reply by Wayne Goodwin on
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My last job of 25 years was at a Family owned business . I started back in 1979 to work for the company $4 dollars an hour . Each year we got a dollar raise and free health ins . Best Blue Cross had . Each year Ins went up . Raises went down to 5o cents a year . Because of Ins rates . Company owner , witch worked there also plus his kids as they got old enough worked also . After a few years he found out that if he got rid of some of his money he would save on his taxes . He started giving employes around 2 extra weeks of pay each time of the year around the time of inventory or called the end of his physical year . His kids got a huge amount around 6 to 8 thousand dollars extra . Some employes acted like they should have gotten more . When he found out . Well the extra 2 weeks pay was cut out plus raises were getting far apart . The kids kept getting their money and raises each year . When i got hurt i was making 10 dollars an hour . Life was good there for a while ....
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