Heads they Win, Tails you Lose

Our executive class, Walmart edition:

Sometimes the effects of our social and income inequality are easy to see, but hard to measure.

But not in this case: despite falling revenues, and despite only reluctantly paying minimum wage to its workers, Walmart increased the pay for its top executives. The people who do the labor get little. The people who make the decisions that can cause falling revenues get more (and more and…) Could it be any clearer what is going on?

This is what Thomas Piketty’s theories look like in practice.

………

A key question for detectives trying to figure out who may have committed a crime is to ask cui bono, “Who benefits?” Who stands to profit from a murder, from a crime? That’s often your perp.

In Walmart’s case, it is not its stockholders who profited. Indeed, this has not been a money year for Walmart shareholders. Despite an overall good twelve months for the stock market in general, Walmart stock bumbled due to lower sales growth.

No joy for Walmart’s customers, or its own employees. Walmart cited cuts in federal food stamps as one reason for its weak sales increase. Since they are paid only minimum wage (and Walmart fights vigorously against any increases) and only are given 39 hours a week or less so as not to qualify for full-time benefits, a fair number of Walmart’s own workers receive food stamps.

Good news though for Walmart’s top executives. The company employed some accounting tricks to “adjust” on paper actual revenues to make them appear higher than in reality. On the strength of that “adjusted” performance, William Simon, CEO of Walmart’s United States unit, received total compensation of $13 million last year. Of that, $1.5 million was a “performance bonus,” paid out actually for declining revenues. In fact, six of Walmart’s top executives received a total of $8.42 million in cash incentive payments for 2014 even as revenues fell and the company closed stores. The former employees of those stores, needless to say, did not receive any performance pay bonuses as they fell deeper into poverty.

They don't get it.

They won't get it if they are riding in an oxcart to Madame la Guillotine.