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Location: Formerly Pleasanton Ca, now in Marietta Ga
10,348 posts, read 8,564,711 times
Reputation: 16689
Quote:
Originally Posted by WVNomad
I agree with this in concept, but I just looked at Kroger’s financials.
In 2020, operating profit and EPS for Kroger were up 50% from 2019
EPS: $3.47 vs. $2.19
Operating Profit: $4.1 billion vs. $3.0 billion.
Just seems to me that the firm has the ability to weather the pandemic by more fairly compensating it s employees and also projecting a positive public image. I’m not suggesting this would necessarily be a sustainable cost increase forever, but I think the financials show they could afford to do it right now. And I do think it would make them look like a good corporate citizen.
I agree with Athena53. What happens when they roll the wages back? Why should they get a raise? Are they working harder per hour than pre pandemic? You are v
Basically saying the employees should be getting a profit sharing plan since you say Kroger is doing well. When Kroger isn’t doing well, should the employees take an hourly pay cut?
I will add that if employees feel they aren’t paid enough they have the freedom to leave And work elsewhere to seek market wages.
Tough crowd here....I think it is interesting that nearly all of us (including me) agree that Kroger is well within their rights as a business entity to shut down operations for whatever reason (don’t like the local wage laws, see better opportunities elsewhere, etc). What I find disturbing though is that many of you also seem to applaud Kroger for doing this...like it is the right thing to do. I’m certainly not knowledgeable enough about Kroger’s finances but in spite of Kroger’s so called razor thin margins, they did have an increase in operating profit to $4.1 BILLION, and they currently have $2.8 BILLION of cash on hand. If they have 200 employees in those two stores and the work 2000 hours a year, that works out to $4 x 200 x 2000 = $1,600,000....if I did my math correctly that is .04% of 2020’s profits. You guys seriously believe these sorts of marginal changes to Kroger’s financial situation are going to put the company of the brink of financial ruin? The Kroger’s CEO compensation in 2018 (sorry..only thing I could find quickly) was about $12 MILLION. That’s for one year..if he took a cut of 10% just for one year, that would cover 75% of the $4 increase.
I agree with Athena53. What happens when they roll the wages back? Why should they get a raise? Are they working harder per hour than pre pandemic? You are v
Basically saying the employees should be getting a profit sharing plan since you say Kroger is doing well. When Kroger isn’t doing well, should the employees take an hourly pay cut?
I will add that if employees feel they aren’t paid enough they have the freedom to leave And work elsewhere to seek market wages.
My thoughts:
(1) Once the pandemic is at a point where people are not risking their health by working in environments that are currently susceptible to catching COVID, I would agree that the premium pay legislation is no longer necessary. Reasonable people can disagree when that time comes, but it should not be a permanent entitlement.
(2) They May or may not be working harder, but they are working in more dangerous conditions in an industry that is critical to all of us. We need them to stock shelves, package meet, etc so we have all ready access to food.
(3) Kroger is doing well by many measures of financial success...see my previous posts. They have lots of cash on hand. A 10% cut in the CEO’s compensation for one year would cover 75% of the cost of the $4 premium for one year (see my previous post for math and assumptions)
(4) You are correct...Kroger employees can leave at anytime. But do you really want to be the company that lets that happen under these conditions? This is the time you ought to be showing his much you really value your employees and demonstrate your commitment to them.
I worked at Kroger during summers between school semesters thirty plus years ago. I haven't kept up with what they do. Even as a part timer, they offered health insurance, stock options, increased pay on holidays and possibly Sundays, and offered a one time use 5% discount on groceries each week. They were a good company to work for and our store manager was highly respected by all of us. I'm sure there have been changes over the years and not sure if all of those benefits still exist. They have a model of what works and if the forced pay increases don't work, then it is understandable that they would leave the market in that area.
Tough crowd here....I think it is interesting that nearly all of us (including me) agree that Kroger is well within their rights as a business entity to shut down operations for whatever reason (don’t like the local wage laws, see better opportunities elsewhere, etc). What I find disturbing though is that many of you also seem to applaud Kroger for doing this...like it is the right thing to do. I’m certainly not knowledgeable enough about Kroger’s finances but in spite of Kroger’s so called razor thin margins, they did have an increase in operating profit to $4.1 BILLION, and they currently have $2.8 BILLION of cash on hand. If they have 200 employees in those two stores and the work 2000 hours a year, that works out to $4 x 200 x 2000 = $1,600,000....if I did my math correctly that is .04% of 2020’s profits. You guys seriously believe these sorts of marginal changes to Kroger’s financial situation are going to put the company of the brink of financial ruin? The Kroger’s CEO compensation in 2018 (sorry..only thing I could find quickly) was about $12 MILLION. That’s for one year..if he took a cut of 10% just for one year, that would cover 75% of the $4 increase.
It doesn't help your case where you say "so called" razor thin margins and then turn around and cite total dollars of profit when those values are all readily available.
Those billions get divided amongst hundreds of millions if not billions of shares of stock.
They're a massive company and I would hope we do not have a return to the dishonest ploys of 2007 or so where "record profits" were screamed without regard to concepts like inflation or company size.
There are so many grocery stores, often very close together; it must be pretty cheap to run them.
Raising wages makes it more expensive, so they'll close a few. If you really want to shop at that store brand, you'll drive a little further; otherwise, you'll shop what's left.
I hope this doesn't hurt poor neighborhoods, which usually have fewer choices already, and are subject to ghetto pricing.
For all those complaining about increasing the minimum wage, are you promoting a permanent underclass?
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