What Stores Will Close?

California. No non-grocery posts.
storewanderer
Posts: 14396
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 299 times
Contact:
Status: Offline

Re: What Stores Will Close?

Post by storewanderer »

pseudo3d wrote: April 7th, 2022, 11:39 am
The fact is, given Kroger's immense size, a seven-figure raise is not going to mean much if it was redistributed toward other payroll. The numbers are all out there in their annual reports; you can play armchair accountant all you want.

EDIT: Keep in mind that the seven-figure raise would be a VERY different issue if layoffs were happening everywhere in the company, divisions were being cut loose, the stores are starved of capex, and the stock price is plummeting. But they aren't.
I think it is more of a wage gap show. It looks bad. It is bad. Still, as you point out, the CEO could work for free and "redistribute" earnings to everyone lower and it would be meaningless due to the size of the company. Still, calling the pay gap out makes good headlines how the CEO gets paid in an hour what the average employee gets paid in a (year?). Then in the stores it starts to rub employees how the CEO is paid millions a year yet the store can't even get money to repair/replace broken equipment or buy rugs to put down on the floor at entry when it rains due to a "budget cut can't buy any more supplies until after the end of the quarter."
pseudo3d
Posts: 3854
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: What Stores Will Close?

Post by pseudo3d »

storewanderer wrote: April 7th, 2022, 10:11 pm
pseudo3d wrote: April 7th, 2022, 11:39 am
The fact is, given Kroger's immense size, a seven-figure raise is not going to mean much if it was redistributed toward other payroll. The numbers are all out there in their annual reports; you can play armchair accountant all you want.

EDIT: Keep in mind that the seven-figure raise would be a VERY different issue if layoffs were happening everywhere in the company, divisions were being cut loose, the stores are starved of capex, and the stock price is plummeting. But they aren't.
I think it is more of a wage gap show. It looks bad. It is bad. Still, as you point out, the CEO could work for free and "redistribute" earnings to everyone lower and it would be meaningless due to the size of the company. Still, calling the pay gap out makes good headlines how the CEO gets paid in an hour what the average employee gets paid in a (year?). Then in the stores it starts to rub employees how the CEO is paid millions a year yet the store can't even get money to repair/replace broken equipment or buy rugs to put down on the floor at entry when it rains due to a "budget cut can't buy any more supplies until after the end of the quarter."
Thank you for clarifying. It's definitely not good from a PR perspective, and is the most obvious "where does the money go" culprit (as opposed to, say, unnecessary remodels or political contributions), but is pretty negligible as far as payroll goes.
veteran+
Valued Contributor
Valued Contributor
Posts: 2234
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1204 times
Been thanked: 72 times
Status: Offline

Re: What Stores Will Close?

Post by veteran+ »

pseudo3d wrote: April 7th, 2022, 11:39 am
veteran+ wrote: April 7th, 2022, 7:13 am
pseudo3d wrote: April 6th, 2022, 4:16 pm
I'm not going to disagree with the fact that the C-suite is overpaid, but...by how much, really? I did the math a while back, and if the CEO didn't take the big $6.5 million raise and instead distributed it to employees (465k according to some numbers), it would equate to maybe an extra $14 per person per year. If it were only Ralphs (27k), then it goes up to around $240 per person per year...you could play around with numbers but it would seem to me that there's not really enough to go around just by breaking into the C-suite's piggy bank.
That sort of math does not explain or excuse the problem.

In 2020, the ratio of CEO-to-typical-worker compensation was 351-to-1 under the realized measure of CEO pay; that is up from 307-to-1 in 2019 and a big increase from 21-to-1 in 1965 and 61-to-1 in 1989.

I believe it is worse than the above.

The C-suite and their trumped up qualifications and dismal performance do not deserve more than 25-to-1.

And they still would be wealthy!
Ratios become more meaningless under larger companies (if it was a small company, ratios would naturally be much closer), and are tied to worker compensation. Under your 25:1 solution, if a typical Kroger employee made less than $30k a year, then the CEO would make something akin to $800k a year, but that's assuming that raises or inflation never happen. If system-wide employee raises take in affect, that cuts into the bottom line that much more.

The fact is, given Kroger's immense size, a seven-figure raise is not going to mean much if it was redistributed toward other payroll. The numbers are all out there in their annual reports; you can play armchair accountant all you want.

EDIT: Keep in mind that the seven-figure raise would be a VERY different issue if layoffs were happening everywhere in the company, divisions were being cut loose, the stores are starved of capex, and the stock price is plummeting. But they aren't.
Well, it's not MY solution. These are numbers produced by pundits that evaluate the compensation disparities. I believe those disparities are vulgar and excessive.

Armchair accountant? Hardly. This is about the ever elusive and disappearing "American Dream" as it relates to a debilitated "Middle Class". What helps the nation? Surely not that accumulation of uber wealth at the tippy top? Sending rockets into space does not help with that "dream".
pseudo3d
Posts: 3854
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: What Stores Will Close?

Post by pseudo3d »

veteran+ wrote: April 8th, 2022, 9:13 am

Armchair accountant? Hardly. This is about the ever elusive and disappearing "American Dream" as it relates to a debilitated "Middle Class". What helps the nation? Surely not that accumulation of uber wealth at the tippy top? Sending rockets into space does not help with that "dream".
Well, when you're talking about the disappearance of the middle class and lack of upward mobility, there's a whole host of sociological, demographic, and political issues that are far beyond the scope of a CEO collecting a few million this year than he did last year (and this forum).

My running assumption was that you had blamed the lack of general wage increases on the Kroger CEO's bonus, which of that point, I tried to refute.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2700
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 290 times
Status: Offline

Re: What Stores Will Close?

Post by ClownLoach »

I'm not defending high executive compensation, but remember that the majority of their pay is from stock grants and stock based bonuses (which sometimes are paid via weird insurance derivative type investments and not even the company directly). If the stock does badly (because they mismanage the business) then they don't get paid or can even have effectively negative pay years because their previous stock grants have been wiped out. This is very real because it has happened to me where I was issued restricted stock and the CEO ran the company into the ground so effectively I got paid less than a Store Manager one year l despite supervising a dozen of them. Bonuses are the same thing, instead of guaranteed salary they have to achieve financial targets to be paid which are not only sales and profit but also have kickers such as employee engagement survey results, customer service surveys and other operational metrics like shrink. If the executives plow full speed ahead and slash the payroll to try to pad their bonuses they will actually get nothing because of the balance of other metrics required like the survey scores. The boards have to approve these packages and they are vetted against other companies, audited by third parties, etc. to prevent unjust enrichment. Every now and then there are problems with these packages as we saw with Toys R Us where the executives had to pay back because they had unjust contracts but that is rare and usually only in private companies that have more leeway.

Usually where you see high salaries are underperforming companies where they need a better CEO from the outside to fix problems but it is risky for anyone good to jump into a sinking ship. In a good company you'll see low salary with higher bonus potential that is stock based. There are usually greater rewards for fixing broken or underperforming businesses. What seems distasteful is that usually there are also guarantees that if the company fails or goes into liquidation under an outside hire executive they are guaranteed a payout anyway (because it doesn't always look so good when you're leaving a Chapter 7 liquidation and looking for another job as CEO, now who wants you?)

What do all of these have in common though? For the most part the shareholders are the ones footing the bill. Stock is issued to pay the executives the majority of their compensation package which means that the other shareholders are all diluted. In other words the shareholders pay the CEO and executives to do their job and raise the stock value accordingly. Hence when stock values tank the CEO is usually first on the chopping block. So back to the comments before where the math was done (not even considering the fact that stock pays most of the salary) and the average employee wouldn't see a $20 bill if the entire CEO compensation package went to line level. The executive pay really truly does not make a difference at all on what the employees make.

The other comment I will make is that the average corporate office has been slashed to ribbons over the past two decades. Retailers who had nearly a million square feet of office space had cut so much headcount from the offices that they could fit in a 100K Sq foot building and that was before the pandemic. I understand the ratio saying the CEO now makes 350X average employee when it was around 20X decades ago. But I would imagine that if you measure straight dollars - office to stores/DCs/etc. these days the exact reverse has occurred and far less is spent on corporate payroll vs store payroll than ever before. That CEO in the 70s sitting in a plush office smoking a cigar with 50 Executive VPs directly reporting to him, and 1000 VPs under that, is long gone. Now he or she may only have 7 or 8 Executives and maybe 20 VPs. There are retailers like Walmart where a District Manager now covers multiple states when in the past they maybe would have covered 8 or 9 stores total. I have seen major retailers just this year go from having 8 or 9 DMs for SoCal alone all the way to just ONE. I would imagine that today the average Executive has 50X the budgetary and unit responsibility they did back in the 70s. You could easily argue in nearly every case that you are at a far greater risk of being eliminated at the corporate offices today than at a store, and if you are in the office you should expect to see your responsibilities at least double every other year with very little if any pay increase, making it nearly impossible to get your job done without starting earlier, staying later, working weekends for zero additional pay until you're so completely burned out that they reward you by replacing you with a younger, inexperienced, and much lower paid person.

The grass isn't any greener on the corporate side. Perhaps it is even worse these days. After two decades of this I am completely exhausted with it and looking to escape retail once and for all. It isn't going to get any better, in fact is just going to keep getting worse.
storewanderer
Posts: 14396
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 299 times
Contact:
Status: Offline

Re: What Stores Will Close?

Post by storewanderer »

ClownLoach wrote: April 10th, 2022, 12:54 pm

The grass isn't any greener on the corporate side. Perhaps it is even worse these days. After two decades of this I am completely exhausted with it and looking to escape retail once and for all. It isn't going to get any better, in fact is just going to keep getting worse.
Race to the bottom. Miserable race for all. Larger operations are just too big and at the whim of Wall Street. But retail can still be a lot of fun. You may enjoy a smaller retail chain, way smaller... even two stores is still a chain, albeit a small one. They probably pay less and have fewer benefits but if it works... and is enjoyable... as long as the small chain is viable (and if it does end up going away, well, there are other small operations to go work for too).
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2700
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 290 times
Status: Offline

Re: What Stores Will Close?

Post by ClownLoach »

storewanderer wrote: April 10th, 2022, 8:33 pm
ClownLoach wrote: April 10th, 2022, 12:54 pm

The grass isn't any greener on the corporate side. Perhaps it is even worse these days. After two decades of this I am completely exhausted with it and looking to escape retail once and for all. It isn't going to get any better, in fact is just going to keep getting worse.
Race to the bottom. Miserable race for all. Larger operations are just too big and at the whim of Wall Street. But retail can still be a lot of fun. You may enjoy a smaller retail chain, way smaller... even two stores is still a chain, albeit a small one. They probably pay less and have fewer benefits but if it works... and is enjoyable... as long as the small chain is viable (and if it does end up going away, well, there are other small operations to go work for too).
I agree something smaller would be a lot more fun. Wall Street has taken all the fun out of retail for everyone from the line level bagger to the District Manager. There truly was no better job in the world than a District Manager in a growing company, where you could push for new stores to open and experience the joy of promoting your team and knowing that you personally created jobs in the community. But that just isn't what Wall Street wants now.
storewanderer
Posts: 14396
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 299 times
Contact:
Status: Offline

Re: What Stores Will Close?

Post by storewanderer »

ClownLoach wrote: April 10th, 2022, 9:12 pm

I agree something smaller would be a lot more fun. Wall Street has taken all the fun out of retail for everyone from the line level bagger to the District Manager. There truly was no better job in the world than a District Manager in a growing company, where you could push for new stores to open and experience the joy of promoting your team and knowing that you personally created jobs in the community. But that just isn't what Wall Street wants now.
The biggest problem I have observed is everyone is at the whim of upper management (who is at the whim of Wall Street). If upper management is stable and seems to be committed to their company for the long term, that typically helps everything else moving through the various layers of the chain. But all it takes is a bad quarter for a management team that has been doing a fantastic job for a decade, to start getting completely trashed by Wall Street. It is really a terrible situation. And if a management team starts getting treated like that, then everything below them just crumbles too.

The bigger problem is what you experienced/observed is happening throughout various business sectors. Also in government, health care, etc. This is not a retail only problem. This is across the board.
jamcool
Store Manager
Store Manager
Posts: 1019
Joined: March 5th, 2009, 10:27 pm
Been thanked: 50 times
Status: Offline

Re: What Stores Will Close?

Post by jamcool »

To many Blackrocks, who buy businesses and break them up.
veteran+
Valued Contributor
Valued Contributor
Posts: 2234
Joined: January 3rd, 2015, 7:53 am
Has thanked: 1204 times
Been thanked: 72 times
Status: Offline

Re: What Stores Will Close?

Post by veteran+ »

storewanderer wrote: April 10th, 2022, 8:33 pm
ClownLoach wrote: April 10th, 2022, 12:54 pm

The grass isn't any greener on the corporate side. Perhaps it is even worse these days. After two decades of this I am completely exhausted with it and looking to escape retail once and for all. It isn't going to get any better, in fact is just going to keep getting worse.
Race to the bottom. Miserable race for all. Larger operations are just too big and at the whim of Wall Street. But retail can still be a lot of fun. You may enjoy a smaller retail chain, way smaller... even two stores is still a chain, albeit a small one. They probably pay less and have fewer benefits but if it works... and is enjoyable... as long as the small chain is viable (and if it does end up going away, well, there are other small operations to go work for too).
I have done both and I am glad to be done with both.

Big or small, private or public the vast majority of the problems (IMO) have always been from the top.
Post Reply