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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.
(Score: 5, Interesting) by bzipitidoo on Sunday October 22 2017, @11:36AM (3 children)
Brian Moynihan, CEO of Bank of America, took $20.2 million in pay in 2016. Steve Ells, CEO of Chipotle, took $25.1 million in pay in 2013. Ells has been criticized for taking more pay than the executives of Ford, Boeing, and AT&T, and investors actually rejected a pay plan that would have paid Ells and his number 2 even more money.
Yeah, sounds like Moynihan is scared. Scared that Chipotle is bucking the current corporate dogma on the proper level of pay for minions and peons, making the rest of them look bad. As if executive pay alone isn't enough to make them all look like greedy thieves. Maybe Moynihan is jealous too.
(Score: 2, Insightful) by Anonymous Coward on Sunday October 22 2017, @12:56PM
Ford, yep the company that paid its workers top dollar so they could eventually afford Fords.
(Score: 0) by Anonymous Coward on Sunday October 22 2017, @07:05PM
Well BoA needed to hire John Kerry to help them with this chain of events. What else did you expect?
Moynihan is scared
Hardly. At that level in the bank they probably do not care. Having worked at the bank for awhile now I can say they are rolling around in trillions and screw over anyone they can to make more.
Moynihan and his ilk are middle men. They see paying someone too much as a problem. They think everyone is an interchangeable cog. At that level of salary and compensation money is basically meaningless to them. They just want to make sure they have the most. They do not realize you really do get what you pay for. Because they do not have to 'bargain hunt'. They just buy whatever someone else tells them is the best. You get what you pay for. Just ask circuit city.
(Score: 2) by JoeMerchant on Monday October 23 2017, @02:05AM
So, I'm all for fair, level playing field, etc. - but... in an organization like Chipotle, total annual revenue around $4B, annual gross profit between $500M and $1B, Ells taking $25M in pay for a good year (where they earned $500M more than a poor year), isn't any kind of a problem for the organization, or even "fairness" - sure, I'd like a lot of than money to be going to the rank and file as part of "fairness" - but, with 64,000 employees, you could divide up the entire $25M evenly among them all and it would come out to just over $1 per person per day, $390 for the year, figure those employees average 1000 hours worked per year (lots of part timers), and that's a $0.39/hr bump in pay... wheee, let's all run out and buy Ferraris with our raises, right?
Sounds like the employees are getting better than that bump over "market rate" unless the bank is worried about nickle and dime differences - so, again, kudos to Chipotle, and may their successes continue. Me, personally, I'd rather pay $8 for a plate of beans, rice and pork from a restaurant well staffed with happy employees, instead of $7 for the same plate of food served up by disgruntled wage slaves who may well be spitting in the food in the back room 'cause what have they got to lose, their crappy job? How much do I care about the IRR to shareholders of the restaurant where I eat my lunch? Not at all.
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