Employees & Executives Alike Feel the Hunger at Whole Foods
Whole Foods Market is that rare, publicly traded company that actually does align the interests of its management team with those of its workers and stockholders. In fiscal 2008, the natural foods and organic grocery chain's compensation and benefits program continued to reflect the company's philosophy of egalitarianism. Cash compensation (salary and non-equity bonuses) for executives remained capped at a multiple of 19 times the average annual wage of hourly workers, or $652,400 and $34,334, respectively, according to the annual proxy filing.
In contrast, the chief executive officers of large U.S. companies averaged $10.8 million in total compensation in 2006, more than 364 times the pay of the average U.S. worker, according to a 2007 survey presented by the AFL-CIO union.
In 2008, Whole Foods founder and chief executive officer John Mackey voluntarily cut his annual salary to one dollar (and earned zero in cash incentive bonus). The annualized average rate of pay for all named executive officers, excluding Mackey, was $412,000. Albeit no named executive officer received performance-based bonuses in 2008, four executives (excluding Mackey) did receive $150,000 in discretionary bonuses approved by the board. Amid the recession, as hard-pressed consumers are turning more to value foods, the company is struggling to attract traffic through its store doors to purchase premium--more expensive--organic, grocery items. Given the economy, the company has opted not to issue guidance on comparable store sales for 2009.
Approximately 96% of the options granted under Whole Food's plan have been granted to workers who are not executive officers. Unfortunately, in less prosperous times, the good intentions of egalitarian philosophy are no better than clothing ourselves in fig leaves. Workers dependent on option bonuses for discretionary spending learn to go without--as they make less per hour than the executives. The share price of Whole Foods has plummeted almost 70 percent in the past 52-weeks, closing at $11.48 a share in trading on Tuesday. The weighted average exercise price of options granted to executives and non-executives was $21.52 a share and $24.72 a share as of January 2009.