James Sinegal, former CEO of Costco, was criticized by Wall Street for putting employees before profits! His response is great.
James Sinegal is the co-founder of Costco and held the position of CEO from its inception in 1983 to his retirement in 2012. Sinegal wasn’t your every day CEO, though.
He subscribed to the idea that treating your employees well will, in turn, get them to treat/serve customers well.
Sinegal made sure that most of his employees received benefits, and gave them compensation and benefits much higher than the industry standards.
For example, over 90% of Costco employees qualify for employer-sponsored health insurance; the U.S. retail industry average is just under sixty percent. As a result, Costco has the lowest employee turnover rate in retail.
Not everyone loved his style of management, however. Wall Street analysts criticized his policies of putting employees before shareholders and profits. Sinegal didn’t let this faze him. “We want to build a company that will still be here 50 and 60 years from now," he said in an interview with the Houston Chronicle.
One of his more famous quotes is “you have to take the shit with the sugar."