Under and Overpaid In Seattle

Discussion
Jun 23, 2004
George Anderson

By George Anderson


According to the United Food and Commercial Workers Union (UFCW), the average
grocery worker in the Puget Sound area makes $18,000 a year.


The amount paid to the chief executive of Albertsons, Larry Johnston, is considerably
more — 911 times more to be exact, reports the Seattle Times.


Mr. Johnston was among the executives included in a piece on chief executives’
compensation in the area.


According to the report, Mr. Johnston earned $3.3 million in salary and bonuses
last year. He has also benefited from a restricted stock program since taking
over the helm of Albertsons in 2001.


Nationally, chief executives of major corporations make approximately 300 times
that of the average worker, according to Business Week’s compensation
survey.


Moderator’s Comment: Does an executive’s compensation
have an impact on the morale and performance of company employees? Are retailers
(union and non-union) setting themselves up for major labor strife because of
the perceived disparity in compensation paid to top executives and rank and
file employees?


We did find fault with the Seattle Times piece
for creating the perception, (based on our reading), that somehow Larry Johnston
was profiting while others in the company were suffering because of the reorganization
he has led. In many cases, the chain was smart to leave markets and reduce headcount.
The fact that so many have lost jobs since he took over should not be connected
to any problems someone might have with Mr. Johnston’s comp package.


George Anderson – Moderator

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