President and CEO
Costco Wholesale CorporationSan Diego City College, California
By Evelyn L. Kent
Jim Sinegal is the guy in the white hat, the guy who heads the store everyone is crazy about. If he had a television show, it'd be called "Everyone Loves Jim."
Investors love him. Employees love him. Education proponents love him. Even the press fawns over him. The only folks who seem the slightest bit unhappy with the CEO and co-founder of Costco is the occasional Wall Street analyst.
The New York Times wrote in a July article, "One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco 'it's better to be an employee or a customer than a shareholder.'"
While that hasn't proven to be the case – in the last twelve months the price of Costco's shares has risen from $39 to $56 – Dreher's comment does show what a reputation Costco has for treating its employees well.
It is all part of a plan. "We pay good wages because that enables us to hire good people," Sinegal said. "You want to get great employees and get them to stay with you."
Sinegal is not overly concerned with Wall Street pundits because he is investing in the future. "We're not here with an exit strategy." Long-range planning includes bolstering the areas around Costco's 470 membership warehouse stores in the United States and abroad. "Even people who don't shop at Costco benefit from us being in the community," he said. That is, in part, because his stores drive prices down throughout the area.
Stockholders seem to agree with the man and his ideas. One, when told that Sinegal answers his own phone and makes his own appointments said, "That's why I own stock in the company." Perhaps it is such attitudes that led Dreher to call Costco a cult stock.
Sinegal got his start in discount retail while a student at San Diego City College in California. A one day gig unloading mattresses led to a full time job at a large discount retail chain, Fed-Mart. Eventually he worked his way up to the executive ranks as the chain's founder's protégé.
He has good memories of the school. "It was a great school. I think perhaps the best teacher I've ever had was at San Diego Junior College," he said.
Costco often recruits on community college campuses. Why? "Because so many of us started that way," Sinegal said. And many of them stay and grow with the company. "We foster development of people," Sinegal said. "One of the things that we are proudest of is that we have been able to assemble and develop a team capable of running a $50 billion company."
Part of that fostering is supporting education. The Costco Scholarship fund gives millions to students every year, and Sinegal is involved in many nonprofit academic ventures. He serves on the national board for United Negro College Fund and on the board for a small Seattle preparatory school for underachieving kids. He has served on the Board of Trustees of Seattle University and on the Washington Governor's Commission on Early Learning. The list goes on, as does Sinegal's ambition for his company and its employees and customers.