But as the five-year chart below shows, Wal-Mart's stock has been a serious laggard of late. Meanwhile, its more socially conscious discounting cousin, Costco (NYSE: COST) has been on a tear.
Over the past five years, shares of Wal-Mart have lost more than 10% of their value. Costco is up better than 100% over the same period.
A piece in the Seattle Post-Intelligencer sheds some light on the kinder, gentler corporate culture that is producing results for Costco. The article is excellent and worth reading, but this one part of one sentence probably sums up the major difference between the two companies better than anything else: Chief Executive Jim Sinegal, the penny-pinching, self-effacing multimillionaire who is beset by handshakes, hugs and even kisses from employees.
It's hard to imagine anyone hugging Wal-Mart CEO Lee Scott. Kicking him in the crotch? Perhaps. But certainly not hugs. And Sinegal even, gasp, donates large amounts of money to Democrats. He tries to visit each Costco location at least once per year.
Furthermore, "He has kept his salary at $350,000 for the past six years, a fraction of what most other Fortune 500 chief executives earn. He also turned down a $200,000 bonus last year because of disclosures of sloppy bookkeeping regarding company stock option practices, and he reimbursed the company $62,463 for using the company's aircraft for personal use."
Is it just me, or is hard to imagine Lee Scott doing any of these things? If the stock's pitiful performance since he became CEO isn't a good enough reason for the company's board to consider urging him to retire to spend more time with his family, perhaps the arrogant corporate culture and terrible reputation that he has helped to craft should be.
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Reader Comments (Page 1 of 1)
12-03-2007 @ 7:55PM
Brockage said...
And the drumbeat against Wal-Mart goes on and on and....................
12-04-2007 @ 12:26AM
ketah said...
Wow... It's nice to see that some one will put it out there for every one to see that Wal-Mart really does suck.
Lee Scott makes millions and does nothing to bolster the lives of the hourly employees and the salaried managers in the stores. Scott sits on his comfy chair counting the pennies that add up to his millions while 2/3 of his hourly employee's need public assistance because of the low wages and sub standard insurance. Some one needs to do a story about the stress related illness that the salaried mangers deal with. I know of no less than 40 Asst. Co and Store managers that have high blood pressure or are on Xanax and other meds to cope. The stock is not the only thing dropping. So are manager with strokes and other ailments.
12-05-2007 @ 8:52PM
SHK said...
Clearly, Ketah is either a union organizer or simply a mental midget. Zac Bissonnette has chosen to take one piece of data to support a conclusion that he had already reached. His article is hardly an indepth look at an extraordinarily complex corporation. Wal-Mart was dramatically overvalued when Scott took over the helm, trading at 59 times earnings. In addition, the company had begun a slide in performance that was not going to be reversed by anyone without a transformational reorganization effort. The company is now trading at about 15 times earnings and showing tremendous momentum in both sales and earnings. Check Cosco's recent results and you will not be as impressed. Over the next 6 months, the street will understand that Wal-Mart's reorganization efforts have taken firm hold. Scott is running the largest co. in the world. His pay is small in relation to his responsibility, particularly as compared to others in similar roles. Only a left-wing, tunnel-visioned, imbiscile would think otherwise. If you don't want to own the stock, don't. If your going to comment on the stock/company, do a little homework.
12-07-2007 @ 12:39AM
ketah said...
No... not mental midget... clearly not mental midget... no not union organizer..
You, clearly and idiot... Look at what has happened to the company since Scott took over the wheel.. better yet.. read the Susan Chambers memo and that will give you great insight into what the thought process of the idiots at the helm of Wal-Mart think. Pay attention... I started buying stock 8 years ago at 75 dollars a share... where is it now? I've seen it as low at 39 and some change a share... Don't tell me I don't know what I'm talking about.. I'm a salaried manager that has been with the company 8 years. I see the P&L's I see the memo's and I get the direction of the HO... I also get to go to K.City and Dallas to the year end meetings.. Mental Midget not in this life.. Knowlege beyond your comprehension.. I'd say so..
12-04-2007 @ 12:03PM
dee morris said...
why do you always compare wal- mart with costco?? sam's club should be compared with costco not wal-mart!!!!
12-06-2007 @ 11:08AM
quicksilver02 said...
Because Walmart & Sams Stocks are rolled into one , So that is why they compare costco with walmart. They are comparing stocks. :-)
12-04-2007 @ 1:13PM
roudy11z said...
I'm sure that "Wennie Fuzz" Lee Scott has no compassion for his employee's like Sinegal does. Maybe if Lee had tried to do right then things would be different at WMT . Most CEO's are basically SELFISH anyway if you've noticed.
12-07-2007 @ 7:12PM
Fran Pipkin said...
Walmart will never do the right thing. They are a train on the wrong track and won't even admit it is. They just keep cutting employees hours all the while service suffers and the lines get longer. Its no wonder people are going elsewhere to shop. Stocks slide and the only ones getting the blame is the employees that are working their butts off for 4 hours a day(that is all they allow them to work at 12-16 hours a week) at minimum wage and no benefits.
12-11-2007 @ 5:27AM
matthew said...
i have worked for k-mart and a ufcw union grocery company.the funny thing is these places cut hrs regularly and refuse to give employees enough hrs and decent money to make a decent living.i am sick and tired of all the constant picking on walmart when other retailers,fast food joints and union grocers and etc treat their workers far worse and pay far worse than walmart does and nobody says a darn thing about that.k-mart ,target,and the other high cost union grocers have more workers on state and govt food stamps and welfare programs than walmart does because of the poverty level wages they pay and their refusal to give full time work to the ones who want it so they can try to make a halfway decent living so they can get off food stamps and welfare at these places.sorry i dont buy all the baloney and propaganda on wm.and i dont buy it that costco is that great and pays that great either.costco has more congestion than walmart.its funny that traffic,safety and livability is never an issue when costco builds a store but always is when walmart wants to build.70,000 the average costco customers household income.sorry thats well beyond most average peoples affordability to shop there regularly.
12-18-2007 @ 6:52AM
Cole said...
Everybody here is talking like Wal-Mart is going out of business! Are you serious!? You can't predict the fate of Wal-Mart based upon a five year chart! How long have they been in business? I'm sure that this is very biased and maybe some people have had bad experiences with Wal-Mart, but I'm sure Costco has had it's low points as well. People, Wal-Mart isn't going anywhere for a long while, like it or not. Their stocks can plummet but they'll rise soon enough I'll bet my last dollar. Unfortunately it's the cut-throat business men that make it in this business, not the soft caring kind. Sad but true.
1-11-2008 @ 6:13AM
susan_l said...
As to the Costco vs. Walmart, I am sure Costco can afford to pay thier employees 'supposedly more,' if Walmart used eminent domain to confiscate private lands after pressuring and greasing local polictians as many times. Then having the gall to ask for further tax breaks. In the end, taxpayers pay for those higher wages and benefits just as Walmart drops their lack medical benefits on society. No difference. Except, that one stabs you from the front and the other from the back. This Scumco (Costco) P.R. crap from thier impoverished CEO (who lives next to Steve Balimer and Billy Gates), to their wealthy employees who drive Ford Focuses because they want to...ridulous.