For better and worse, Howard Schultz, CEO of Starbucks, has been drawing a lot of attention of late. Schultz hasn’t been running his company in the typical style of most American, mega-corporations. Schultz has increasingly moved Starbucks toward the borderlands between capitalism and politics. In February, TIME magazine featured Schultz on its cover and ran a story that went so far as to ask whether he had any aspirations for political office. However, as mentioned above, not all the attention has been for the “better.” At the annual shareholder’s meeting, held Wednesday, March 18, corporate officers had to spend at least part of their time defending the most recent social campaign, which had baristas writing “Race Together” on to-go cups. Ironically, the story on this misguided message appeared in the hometown, Seattle Times, just days after a fairly complimentary article on Schultz’s seemingly sure-handed guidance of Starbucks into the discussion of these types of corporately dangerous social issues. In that article, “Citizen Starbucks,” (by Angel González, Seattle Times, Monday, March 16) Schultz receives recognition for being one of the most significant leaders of a trend by some corporations towards “standing for something more than profits.” Yet, just near the end of the story, we hear the reality that makes these socio-political forays possible: “above par results.”
Starbucks shares have outperformed the S&P 500 Index by a factor of six since early 2009. Wall Street so far seems to accept that an investment in Starbucks comes with a dose of political agitation. ‘Everyone knows Howard Schultz has a view on a lot of things,’ says Andy Barish, an analyst with Jefferies… ‘The company has been doing well,.. and at the end of the day that’s the most important part.”
Yes, that is the most important part to many, but why?
I find the current obsession with the endless pursuit of profits disturbing and profoundly shallow. No one seems to be asking, “To what end?” I’m not entirely naïve. I lived in mainland China in the mid-80’s. I experienced, first-hand, the detrimental effects of leaving no room for rewarding hard work, effort, and personal investment. Most human beings want to feel that they can take care of themselves and those they love, at least in part by being rewarded for their own efforts. In the capitalism of the US in the mid-80’s, many of us still believed that was possible, at least generally. Personally, I no longer believe that is true. Even with the recent turmoil of the Great Recession, US corporations are sitting on the largest amount of capital reserves in US history, while millions remain unemployed. Many CEO’s receive obscene bonuses, supposedly based on performance, related almost solely to profits, while the average worker has seen their wages stagnate for two decades. As one grotesque example, on Saturday, March 14, the Seattle Times reported the 2014 compensation and bonus amounts for the Boeing Company. Amidst the myriad numbers, a few will suffice for this example. In 2014, Boeing accrued a net profit (net, not gross) of $5.4 billion. From 2012-2014, their regulatory filing reports a “cumulative economic profit” of $8.332 billion versus a target of $5.701 billion. Based on these numbers, CEO James McNerney, and other executives, received the maximum bonuses allowed at twice the target amount. Bully for them, eh? However, at the same time, in the same company, with the same numbers, as Dominic Gates reports:
The rank and file employees’ bonuses were down from the previous year because they failed to ‘far exceed’ financial performance targets set at the beginning of the year. Though the company exceeded those preset targets by 30 percent, that was not enough to trigger the maximum bonuses, equal to twice the target bonuses.”
Hmm, McNerney and executives yes, average worker no. Putting this in actual dollar amounts, McNerney received an annual bonus of $4.4 million (plus an additional $10 million three year performance bonus) while, “salaried non-management staff, including engineers, in Washington state received annual bonuses averaging just over $4,500” (a 24 percent drop from 2013). That story by itself might only rate an assessment of “outrageous.” What moves it into the “grotesque” category for me relates to an entirely different story that came out in the same paper, that same day. The headline reveals the basic message of the story, “Even In Better Times, Food Bank Visits Are Up.” Again, some numbers from the article by Janet I. Tu, help illuminate the reality: “At the 27 food pantries in the Seattle Food Committee coalition, the number of visits (including delivery of food to homes) went up from 928,656 in 2007 to 1.1 million in 2009 and to nearly 1.4 million last year .” In Seattle! Which is not typically considered a struggling economy. As if to set me up for this blog, these two different stories began on the front page, and continued side-by-side on a later page.
I will readily admit that I lack any expertise in relation to numbers associated with corporate profits and annual bonuses. However, when it comes to the numbers of people without enough food to eat, my colleagues in both the social services and ministry, and I, have been profoundly saddened by both the numbers of people we work with, and work for, who need help, and the addition of whole new demographics that find themselves asking for help they never dreamed they would ever need.
So I repeat the question that led me into this blog: “Profits!” Fine. But to what end?
Contrast the general corporate trend with the way of God. In fact, “consider the lilies of the fields.” Not because they “do not labor or spin” and yet God clothes them and cares for them. Consider as well the fact that wildflowers flourish across the continents, frequently in meadows that no human eye will ever even glimpse. Why go to the bother? Where is the profit in that? Consider the staggering expanse of the universe, the myriad numbers of stars and galaxies; and, as far as we know at this point, we are the only tiny rock in this magnificent universe with life, with creatures who know the Creator of this universe. A universe that has been given to us (given to, not earned by!). As Ian Pitt-Watson once questioned in a sermon along these lines, “Why this waste?” Could not God have been a bit more, or a phenomenal amount more, efficient? Where is the profit? Or, consider the vast stretch of time that has preceded our tiny run in history. Why the waste? What was the use? What was the point? To what end? Even day by day we are showered with the generosity of God – “God causes the sun to rise on evil and good alike. God causes the rain to water the fields of the righteous and the sinners.” (Mt.5:45) Why? I believe that God lavishes us with more of everything than we will ever need, in order that ALL might prosper, that ALL might at least have the opportunity to take what is given by God, given to all, and use it for good. Not a single executive in this world would have ANYTHING without the abundance of good stuff that God has provided first. So, why not share the wealth? Literally.
“Profits!” Fine. But, to what end?
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