financials

— पांच हजार चार सौ एक — Fascinating news yesterday, as PCC released "PART TWO: FINANCIALS" of the 2022 "Co-op Purposes Report." This report is 16 pages long, and what many might consider the biggest news is buried on pages 12 and 13: for the first time ever, we have made public how much our CEO makes. It also reveals the compensation packages for Board of Trustees members, which is more generous and more complex than many of us ever would have assumed—and yet, according to this report, both our Board and CEO are compensated at a lower rate than those at other, similarly sized companies: Based on several national and Pacific Northwest executive compensation studies, [our CEO]’s base salary is approximately 85% of the median base salary (not including equity compensation such as stock or stock options, a standard piece of executive compensation which PCC does not offer) for CEOs of similarly sized companies, and his total compensation package (base salary together with maximum bonus potential) is approximately 76% of the compensation of CEOs of similarly sized companies. His base salary is also lower than his most recent predecessors in the role. In 2022, [our CEO]’s annual base salary, as set by the PCC Board of Trustees, was $500,000, and he had the opportunity, conditioned upon PCC’s achievement of certain financial goals established annually by the Board of Trustees, to earn a bonus of up to 55% of his base salary. The co-op did not achieve all its financial goals in 2022 and bonuses were reduced to 50% of the target amount. However, at [his] request, [our CEO] did not receive a bonus for 2022. [His] salary for 2023 remains unchanged at $500,000. [He] does not receive additional compensation for his participation as a trustee on the PCC Board of Trustees. And then there's this bit about Board of Trustees Compensation, which I found even more fascinating: PCC competes with other businesses in the Seattle area for qualified and competent individuals willing to devote the time and effort required to serve on our Board of Trustees. Other businesses generally offer directors on their boards a mix of cash and equity-based compensation (generally stock or stock options) as consideration for their service on the board. PCC, being a cooperative, cannot offer equity-based compensation to those who serve on our Board of Trustees. Therefore, in recognition of the considerable duties, time and effort trustees commit to PCC, all trustees other than the CEO (who receives no compensation for his participation on the Board and its committees) receive a stipend of $30,000 per year for their service to the coop. In recognition of the additional time and effort required to fulfill the duties of the chairperson, the chair of the Board receives an additional $12,500 stipend per year, and the chairs of the three standing committees each receive an additional $7,500 per year for their services. The Board and committee chair roles rotate every few years. Based on a 2022 third-party compensation study of board compensation levels from similarly sized private and public companies, the stipends paid to members of PCC’s Board of Trustees in 2022 were roughly 25% of the total median compensation (both cash and equity) paid to directors on boards of similarly sized companies (based on annual revenues), and between 45% and 76% of the median cash-only compensation paid to directors of public and private companies, respectively, of similar size. Anyway. This is kind of big news, mostly because we've had lower-level store staff asking us to disclose the CEO's salary for several years. I can see many being taken aback by a salary of half a million a year—I figured it out, and that's nearly 13 times the wage of our lowest-paid store employees. I'm having a bit more of a cautious approach to reacting to it, though. We can't escape the fact that we all operate in this same capitalist system, and if we want a quality CEO, we have to pay them competitively. And, apparently, it's still lower than the average—almost certainly due in part because of the optics given the type of company we are. I did get into a lenthy text exchange with Claudia yesterday, though, after she also saw this information. At one point she wrote, I made so little working there. And, because Google Chrome has recently taken to sending me notifications of reddit posts about Seattle, this morning I got alerted to this post about the other quasi-big news from yesterday: due to an operating loss in 2022, PCC members will not be getting a dividend this year. Many in the comments, frankly quite rightly, kind of ridicule the fanfare PCC included with the news that we were switching to the divident model just a few years ago—only for the returns to be a fraction of the value members got from the old, monthly 10% off coupons. Every year since, the dividend was gotten even smaller; this year there is none at all. It's totally reasonable that PCC can't really afford it in the current circumstances, but it's also totally fair for members to experience such explicitly diminishing returns and think, What's the point? That said, there's another common thread in the comments on that post, which basically combine to a catch-22. Many are exasperated with PCC's prices, and either don't understand or don't want to hear relevant details like how our supply chain is different and our higher quality products have higher wholesale costs. Plenty of examples of apparently poor quality product—one person said the fresh salsa they bought a year ago was so bad they threw it in the compost—but, another thing these people don't understand is that the people in this thread are not a representative sample, and the biggest complainers just get the most airtime. The people who got great salsa aren't stampeding to these pages to state as much. How we can effectively make the average shopper understand these things, however, is another matter. — पांच हजार चार सौ एक — — पांच हजार चार सौ एक — Aside from all that, I have fairly little to report. I rode my bike home from work. I asked Shobhit what we wanted to do for dinner, and loved his suggestion of grilled cheese sandwiches. I even walked over to Trader Joe's to get a tomato and some basil for them. I came back and made our dinner, while Shobhit was otherwise super busy both updating his spreadsheet of campaign contributors, and speaking to both Sachin and to his brother. He's going to file his candidacy officially today, and assuming no more than ten signatures are rejected for not matching what's on the voter registration, he will definitely be on the ballot for Seattle City Council District 3 in the primary election on August 1. And after that, the thing I actually kept my calendar open for: our second monthly meeting for the 43rd District Democrats, once again held virtually. Much of it was dull, there was a lot of discussion about a resolution against police sweeps of homeless encampments (something people on all sides want to oversimplify when it's a very complext issue). But, also some more introductions of political candidates. This included Joy Hollingsworth, the current front-runner (by far) for District 3 on the Seattle City Council. I witnessed her send a direct message to Shobhit, as they have yet to meet, whereas Shobhit has met nearly all the other candidates, many of them also setting up tables near the Capitol Hill Sunday Farmers Market. Shobhit replied with something along the lines of looking forward to meeting her, and she replied with "contact me any time" and gave her phone number, which Shobhit immediately put into his contacts. She must have had a scheduling conflict last month. She gave a very strong two-minute introduction. Shobhit had to agree. — पांच हजार चार सौ एक — [posted 12:50 pm]