Agreed, the amount of money they made is their net income.
But, if they paid out additional money in salaries,
that number would be in cost of sales.
So, taxes would be reduced, and logically,
dividends would be reduced too.
So, it would be most logical to compare the additional
salaries paid out vs. operating income or 27B.
Gross is $127m on that link. not the whole story and Wiki invest even
says so if you read down a little.
Their operating income is more like $27m and net income is $16m. Which
number do you believe.
That is not really much on a half a trillion dollar operation with
over 2 million employees. A good chunk of that gets shared with the
stockholders, some of whom are Walmart workers.
If they raised the overall salaries by another $3 they could still get
food stamps, what's your point?
All raising the bottom tier of wages does is raise what the government
calls the poverty level and about the same number of people will get
Walmart is just the whipping boy for that fact that we have a
significant number of people in the work force without the skills to
get a decent job. Paying them more for menial tasks is not helping
anything. It is only inflationary, pushing up the cost of living,
particularly at the low end and putting you right back where you
Bob whizzed out Henry Ford and the white washed story that it was his
altruism that made him raise salaries. The fact is he did it to reduce
turnover and retain skilled workers. These minimum wage jobs are not
paying for skilled workers.
You would then have the drones shuffling around Walmart who can't even
point to the tire department making more than some skilled trades.
The line job at Ford was still something that took a few weeks or even
months to learn. All the "line" did was keep that from being a
craftsman who had years of training. Along with those menial jobs they
still had a number of highly skilled workers like welders and
You can't compare that to a modern day retail person who doesn't even
have to know how to count out your change. (watch what happens if the
registers are down)
You can wax on about how wonderful it would be if everyone made $16 an
hour for just showing up but at the end of the day, their labor needs
to pay for itself or the company can't afford to hire them.
Unfortunately the consumer has spoken. They are not willing to pay the
price for competent service so we end up with places like walmart.
It is only going to get worse and walmart is just the canary in the
like 60-70% of the money comes from non-cash sources specifically stock
options. That doesn't translate to actual money for pay roll. Indeed
most of the compensation comes from the shareholders (through dilution
of shares, etc.) as opposed to out of the cash register.
Three years ago I was talking about McD's and looked at their proxy
and if you took away EVERY penny of actual cash compensation from those
listed in the report, you could give every employee in the organization
a 50 cent bonus.
So keep it money to actual money.
His actual money was only around $4 million (1.2 in salary and $2.8 in
cash incentives) the rest came from the stockholders. (BTW: That $19
million was down $6 million from the year before) If you took the cash
part of the compensation, you could give the 1 million or do employees a
one-time bonus of a whopping $4.00.
year. A couple years ago there was a big hooha over the big raises at
McD's. All of that was because McD's happen to do good enough that year
that the bonuses (again about 7 0% stock-relate) to be triggered. They
had gotten ZIP, nothin', nada except salaries for the four years before.
Look through the 10-Ks and you will see many are set up that way.
The compensation packages just keep growing because companies
Actually they keep going because Congress (in its infinite wisdom and
in a flurry of bipartisanship include unanimous or nearly so votes in
both Houses) changed the laws in the mid- 80s. The really funny part is
that they changes were brought about because they were concerned with
what they then viewed as overly paid executives.
In order to fight this Evil, they effectively capped executive
salary (what they are paid to actually run the company) by making
nothing more than $1 million deductible. (If you look at the proxy
filings for most publicly held companies, a large %age of them still top
actual salaries at that point).
Then, in an attempt to "align the interests of the shareholders and
the executives", tax-favored performance based things such as stock
options, etc. So, instead of paying someone for actually running the
company, they paid them to run the books. I don't think it was
coincidence that first book-cooking scandal took place within the next
two years after passage.
Over the long haul, all sorts of things occurred. In no apparent
order of importance:
1). Executive pay rose substantially (although interestingly
enough if you look at many of the indicators they rise and fall with the
stock) and execs were paid orders of magnitude more than even the most
captive board would have had the balls to pay them before.
2)> The concentration of wealth starts the spike around the same
3). The marker people like to point to, ratio between exec pay and
the average on the shop floor, ballooned. After bouncing around 30X or
so during the 60s, 70s, and early 80s, it took off cresting north of
300x before falling back with the stock market and then back up with the
So to those clamoring for Congressional action I point to the
above and suggest they be damn careful what they wish for.
are so wrong.
Again only about 20% -30% of that is actual cash that could be
?Statistics are like bikinis. What they reveal is suggestive,
but what they conceal is vital.?
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