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posted by takyon on Sunday October 22 2017, @09:22AM   Printer-friendly
from the FIRE-sector-doing-bad-math-again dept.

The Intercept reports:

Bank of America Merrill Lynch downgraded Chipotle and warned investors that the stock will "underperform", complaining that the restaurant chain is paying its workers too much, and that cutting labor costs further will be difficult for the chain.

[...] Chipotle spokesperson Chris Arnold called Bank of America's analysis "flawed and inaccurate", adding that the restaurant chain hasn't cut employee hours but recently increased hours in conjunction with the addition of queso to the menu.

"That analysis is making estimates and conclusions about our management practices over a 12-year time frame from 2006 to 2017", Arnold told The Intercept. "Obviously, the scale of our business and labor wages have changed dramatically over that time frame. Drawing conclusions from 2006 and applying them as a directional change to our business over the past 12 months is simply flawed."

[...] "We continue to pay wages and offer benefits that are competitive and that reflect the priorities of our employees", Arnold said. "And with a commitment to developing and promoting people from within, we are providing significant opportunities for advancement."

The downgrade is a symptom of Wall Street's maniacal obsession with labor costs.


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  • (Score: 2) by looorg on Sunday October 22 2017, @10:40AM (1 child)

    by looorg (578) on Sunday October 22 2017, @10:40AM (#585928)

    Technically you probably could. If you become a stockholder. But to actually lower bonuses and such you probably need to be the absolute majority stockholder so it will probably be somewhat expensive.

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  • (Score: 4, Interesting) by JoeMerchant on Sunday October 22 2017, @03:05PM

    by JoeMerchant (3937) on Sunday October 22 2017, @03:05PM (#585963)

    There's a larger problem at work: if you become a majority stockholder in one institution and you start squeezing C-level compensation in your institution, the C-levels in other institutions can start squeezing your bottom line in response. I think this eventually happened to Ben and Jerry's. Save me the PR flak about how they just couldn't attract competent talent - competent in this arena means a member of the club, able to negotiate with other members of the club on comparable footing. It's a caste system, not by birth, but by the number of digits in an individual's net worth. If a mere 7 tries to negotiate with a 10, the 10 will never give them a break. However, if an 11 approaches the same 10, that 10 will do the 11 a favor in hopes that someday the 11 may throw the 10 a bone in return.

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