• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Chart of the Day: Costco Is in First Place For Fair Wages

Costco is ahead of the curve on keeping employees, and politicians, happy.
By KEVIN CURRAN Mar 08, 2019 | 03:38 PM EST
Stocks quotes in this article: COST, AMZN

While Costco Wholesale  (COST) is getting attention for its minimum wage hike, the company is already a leader in fair pay.

Shares of the big box retailer have surged to their highest level since early December after an earnings report that easily bested estimates even amid the wage hike, which puts the company on par with Amazon (AMZN) for base pay.

"We announced that we're taking our starting wages from $14 and $14.50 up to $15 and $15.50 per hour in both the U.S. and Canada," CFO Richard Galanti told analysts on Thursday. "In addition, we're also increasing wages for supervisors and introduced -- and also introduced paid bonding leave for all hourly employees."

He noted that the increases will represent a three to four basis point headwind in SG&A expenses which will be felt through the front half of the year as the company seeks to be more fair with its pricing models and remain ahead of the retail industry curve.

However, when the company's payment practices are fully examined, the company has long been ahead of its peers in terms of fair pay and appears more than capable of balancing livable wages for employees and returns for shareholders.

"The company seeks to develop long-term relationships with employees," a recent 14-A filing from Costco explains. "Those working in the Company's membership warehouses receive pay and benefits more generous than their counterparts at competitors. This long-term investment in its workforce has benefited the Company with greater loyalty, and the Company consequently benefits through what it believes to be the lowest employee turnover rates and the lowest shrink rate in the industry."

The benefits include equity grants, which company filings note are a "meaningful portion of compensation" for over 5,000 employees. The benefit is significant as it is something that Amazon has done away with in order to raise its minimum wage to $15 per hour, garnering approval from America's foremost Democratic socialist, Bernie Sanders.

The commitment of executives is clear as well, as the pay ratio of W. Craig Jelinek, Costco's CEO, to his median employee's salary is far below that of some of his peers.

In fact, only Amazon's pay ratio is lower, with Jeff Bezos electing to take a lower salary given his already enormous wealth.

If politicians again push for higher wages and more equitable compensation for executives and employees, Costco is likely one of the last companies to be affected.

(Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now.)

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Earnings | Investing | Stocks | Consumer | Retail | E-Commerce | Analyst Actions | U.S. Equity | Stock of the Day

More from Stocks

Trading Like It's 1999!

James "Rev Shark" DePorre
Jan 27, 2023 4:46 PM EST

The mood was bubbly as speculative investors piled into stocks with any minor exposure to Artificial Intelligence.

More Good Dividend Stocks With Pretty Charts

Bruce Kamich
Jan 27, 2023 1:31 PM EST

In this second part of a two-part series, we look at the final five of 10 stocks with the best of the both worlds.

Even Some Out of Fashion Names Are Now Back in Style

Jonathan Heller
Jan 27, 2023 12:30 PM EST

Sure, we're only one month in to 2023, but so far these stocks are starting the new year with a bang.

I'm Making Small Bets With These 2 Stocks

Bret Jensen
Jan 27, 2023 11:30 AM EST

While I remain cautious on the overall market, I continue to act upon the limited opportunities I'm finding in the current market.

Chevron Is Crushing It and for My Portfolio Too: Here's the Trade

Stephen Guilfoyle
Jan 27, 2023 10:51 AM EST

The only reason to exit the stock now is profit-taking.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:48 AM EST REAL MONEY

    Watch Doug Kass on the Daily Rundown!

    In today's Action Alerts PLUS Daily Rundown, Doug ...
  • 11:03 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend On Real Money

    It's time to start using this power to build great...
  • 03:06 PM EST BOB LANG

    LEAPS Webinar

    This week, I offered a free webinar session talkin...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login