December 28th 2023.
Craig Jelinek, the CEO of Costco, is leaving the company with his head held high. His farewell performance was marked with a notable financial crescendo - a total compensation of $16.8 million for 2023. This figure includes a base salary of $1.1 million, stock awards nearing $15 million, and additional perks. His total compensations for 2021 and 2022 were $8.8 million and $9.9 million respectively.
Within the vast workforce of 289,000 Costco employees, the median compensation is reported at $50,202. This equates to a CEO pay ratio of 336 times the median employee pay, which is a clear indicator of income disparity within the company. It's noteworthy that the median worker has witnessed a substantial raise from the previous year’s compensation of $45,450.
Jelinek's compensation is commendable, but still lower than that of other retail giants’ CEOs. Doug McMillon of Walmart has a total of $25.3 million, while Brian Cornell of Target has a total compensation of $17.6 million.
Costco's reporting practices offer transparency beyond regulatory requirements. While the SEC mandates companies to consider part-time workers in determining median employee compensation, Costco voluntarily discloses a supplementary calculation focusing solely on full-time employees, constituting approximately 60% of its workforce. The median compensation for full-time employees stands at $66,783.
On January 1, Jelinek will retire and pass the CEO baton to Ron Vachris, who has been with the company for over 40 years. He started as a forklift driver and is now set to assume the role of CEO with a total compensation package valued at $11.5 million. Jelinek is only the second person to helm Costco in its 40-year history.
It is indeed an honorable feat for Jelinek to be remembered as the CEO of Costco. He has left the company on a high note, with the legacy of a generous compensation package and a commitment to transparency.
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