Winner: John Mackey and Walter Robb, Whole Foods
Whole Foods (NASDAQ:WFM) paid its two co-CEOs $1.2 million in total direct pay in 2012. With the exception of one dollar, all of it went to Walter Robb (right), who has been with the company since 1991. Founder John Mackey has received $1 in annual salary since Jan. 1, 2007, foregoing all bonuses and stock options.
As a matter of principle, none of WFM’s employees can receive cash compensation more than 19 times the average hourly wage of full-time workers. In 2012, the average was $18.63 for an annual wage of $38.747, putting the salary cap at $736,200. Due to Whole Foods’ exceptional performance in 2012, its six named executive officers besides Mackey forfeited an average of $717,000 in cash compensation as a result of its salary cap.
It’s very rare to hear about executives willingly foregoing any compensation, let alone three-quarters of a million dollars.
That’s not to say its executives aren’t compensated well. All six of the named executive officers received option awards in 2012, ranging from a low of $465,412 to a high of $955,803. But even here, the company does a good job spreading the wealth. According to Whole Foods’ proxy: “Approximately 96% of the options granted under our Stock Incentive Plan have been granted to team members who are neither an executive officer nor a director.” No wonder WFM has been selected by Fortune magazine in 15 consecutive years as one of the “100 Best Companies to Work For.”
Although Whole Foods’ stock has had some ups and downs in recent times, long-term it has easily outperformed its grocery store and S&P 500 peers. Evidently, you don’t have to pay people obscene amounts of money to get them to work hard. You just have to treat them with respect.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.