Costco Walter Jelinek

Costco is a discount stores industry in the United States. Costco was founded in 1983 and hold employment to 195,000 employees. The headquarters of Costco are in Issaquah, Washington and was founded by James D. Sinegal and Jeffery H. Brotman. The CEO of Costco is Walter Jelinek. Jelinek is about the customers satisfied, employees happy, and keeping prices low and controlled. Jelinek is more focused on giving customer’s low prices and employees great benefits than earning as profit for himself and the company. Costco has low priced nationally branded and private branded products. The warehouses of Costco are located in the U.S., Canada, the UK, Japan, and Australia. The products that Costco provide are in the following categories: appliances,

It is well known for the many ethical practices that make the company successful. Two of the good ethical manners are the customer service and employee service. As stated before, the CEO Walter Jelinek puts his employees and customers before his salary. Jelinek is one of the few CEO you hear about taking a cut in his salary so that he can provide low prices and great employee benefits. Costco is just as generous to the customers as it is the employees. There are roughly 4,000 different products provided by Costco. Most products are sold in bulk unlike Costco’s competitors. The prices of these products are marked up 14 percent or less over cost. The private branded products such as Costco’s own Kirkland is marked up no more than 15 percent. There is not much profit made off of the customers by marking the prices high up like most businesses. 89 percent of Costco’s profit comes from the memberships. The membership renewal rate is almost 90 percent. Not only does Costco have low prices for the customers but great customer service. The employees at Costco are offered great pay, hours, and benefits. This spills out over to their work ethic which effects their great customer

This is much higher than todays minimum wage. In 2009 during the economic downturn, the company gave a $1.50 raise to the employees instead of layoffs and wage cuts even though sales were declining. 80 percent of Costco’s employees have health care through the company. The employees that have coverage through the company pay less than 10 percent on the plans premiums. Costco offers two medical plans, a dental plan, a pharmacy plan, a behavioral health benefit, a hearing aid benefit, Cobra, a Vision plan, a benefit coverage while on leave of absence, and a 401K retirement plan. The 401K has 3 parts, (1) a Pretax and Roth salary deferral contributions option, (2) Costco matching contribution, and (3) Costco discretionary contribution. Employees of 18 years of age that have completed 90 days of service within 12 consecutive months are eligible to participate in the Pretax and Roth deferrals. Costco’s matching contributions match the employee contribution or salary deferral up to a certain amount. Costco will also elect to discretionary contribute if and employee meets the requirements but does not legally have to do so. The discretionary contributions are the employee’s and remain that way after termination. Although, the discretionary contributions are on a vesting schedule. If an employee terminates before 100 percent vested they will lose a certain amount of that money. These great benefits and great pay are factors of Costco’s five