Curley: Before you rage about the Starbucks CEO’s salary, consider this

It was the big COVID-19 lockdown, and 35,000 people in the news business lost their jobs in about two years.

That’s radio, television, magazines, everybody — 35,000 lost their jobs in about two years because of the lockdown.

We got a word here that we’re going to have a Zoom call with the boss of Bonneville. Everybody was shaking in their boots because we thought, “Well, here it comes. This is going to be the bad news for all of us. We, too, will have to hit the bricks, and we’ll be losing our jobs.”

The CEO of Bonneville, who owns this station and others, got on and talked about what a difficult time it was, and he was hoping everybody was OK. And after a couple of minutes, he then said, “I just want to let everybody know … ”

I thought, “Oh God, here it comes. Oh boy, here we go. We’re gonna lose our jobs.”

He said, “I know how hard this is for everybody.” And his voice cracked, and he said, “So what I’m going to do is give everybody … ” — oh boy, oh boy, here comes — “I’m gonna give everybody a bonus.”

I remember thinking, “Did I hear that right? Have I lost a connection properly on my Zoom call? How could that be?”

Now this is an outlier move, when you think about all the other people that lost their jobs during that time, but he felt as if it was important for all of us to realize, “Hey, we’re all in this together, and we’re gonna do what we can to protect you, so a bonus will come.” I think it was a percentage of your income.

Now, that story isn’t told ever or anywhere, because it never happens. If you have a job in radio, if you’re not fired at least four times, you haven’t worked in radio long enough. You just know it’s part of the deal.

The other weird thing about it is you can have some people who are working morning drive, afternoon drive, making, I don’t know, 10 times more than the other people.

I remember at one radio station, the people I knew were making like $300,000 to $400,000 a year, doing morning, the next person that came in and sat in the chair and did the exact same thing that they did, played more music, was making $32,000 to $35,000, but it’s basically the same job. But because one person’s doing morning, one person’s doing afternoon, there are more listeners. That’s the way it used to work anyway.

You also knew that if you did well, worked hard, and the ratings reflected that, they would give you more money and a little bit more “job security,” although it really was very little job security.

You just knew as part of the deal that you get laid off every once in a while if things weren’t going well, and you’d make sacrifices, and if you got tired of being fired, you would just simply go and maybe get another job. Get out of radio, get out of TV, get out of writing news, and you would find something else you wanted to do, because it was never going to work for you. And that was just part of working in that particular field.

I never looked at anybody who was making more money than myself and thought, “Well, that’s not fair,” especially if it came to some guy in management. I didn’t care. That was his job. He got that, but I had other benefits. That’s sort of the way the general environment would play out.

Meet Barbara, and everyone else riding on Brian Niccol’s decisions

I read a piece in The Seattle Times today, and I saw they were taking shots at the new Starbucks CEO, Brian Niccol. He gets paid 0.08% of Starbucks’ market cap. What does that mean? That means Starbucks is valued at about $110 billion, and he gets 0.08% of Starbucks. His salary is about $95 million, depending on how well it does.

Now, here is who he is responsible for: 380,000 people around the world work for Starbucks, and considering each one probably has two dependents, you get the idea, that’s a lot of people. The Vanguard Group, the asset management company, which holds and serves about 50 million investors, that’s you, and me, and Barbara.

Barbara is a 42-year-old teacher. She’s got one child, and she hopes to retire in 20 years. That’s her plan anyway. Now she is counting on Vanguard to invest properly. About 10% of Vanguard’s holdings is Starbucks stock. If the Starbucks stock goes up, then this teacher with her child, hoping to retire soon, will make more money.

So if Brian, the CEO of Starbucks, performs well and makes the right decisions, a lot of people are benefiting and depending upon him.

His pay is merit-based. If the stock goes up, he makes more money. No problem with that. If the stock goes down, he doesn’t make as much money.

Baseball’s pay ratio is worse, but nobody’s mad about that

The Seattle Times article looked at ratios of pay, but they’re missing context. So, the Starbucks CEO, $1,795 to the $1, that’s the ratio that they set up — that could outrage anybody, make you pull out your blue hair and snap a nose ring.

Let’s look at baseball for a moment. If you really want to get upset about something, the minor league compared to the major league, same sort of ratio.

Remember Starbucks? $1,795 to the $1. Here’s baseball: $3,500 to $1.

You say, “Well, that’s not fair. They’re doing the exact same job. It’s hitting, running, pitching, catching, the same sort of thing. So why is there a difference?”

Well, because the guy who’s getting paid a lot of money gets more hits. That’s all there is to it. It’s purely metrics-based. There’s no outrage when you see that, because you know what baseball players can do. Well, that guy sucks, and that guy’s great, so that guy sucks and he doesn’t get paid as much, and that guy’s great, so he gets paid more money.

The problem is, people don’t know what CEOs do.

“Oh, they walk around with a suit on,” or, “They fly in a private jet, and that’s all they do.”

Ben & Jerry’s learned this lesson the hard way

You can’t point to anything that they’re actually successful at. The problem is, when it comes to hiring a CEO, it’s not so easy.

Take Ben & Jerry’s ice cream. Back in the ’90s, they decided they wanted their ratio to be five to one, for every $5 that person makes, the lowest paid person makes $1.

What happened? They got a guy named Fred Lager in there. He took the job for $75,000, the business suffered, the stock went down, and Ben and Jerry realized they had to change the ratio. Finally, they just gave up and sold it to a major corporation because they couldn’t make it work.

So, for baristas who are complaining about their pay compared to the CEO, you’ve got to have a clear picture of what the skills are that the CEO has.

And the world? Well, the world is waiting for the CEO of Starbucks to continue to do well. The 380,000 people who are employed, the family members depending upon them, and the 50 million people, including the teacher, also depend upon that individual to make the proper decisions. So there’s a lot resting and a lot riding on that individual.

Stop complaining and quit your job

For any barista out there who thinks they’re able to sleep at night, knowing that that many people are depending upon them, and you think you have the skills to be a CEO, then go, try and do it on your own.

Quit the job, go get something else; you’re probably better at something else. Then you can stop complaining about the money that you’re making, because the market will only pay you a certain amount, and the amount you’re making is what the market will pay you.

So my advice to you is, find something else. Quit your job, find something that you care about, and have the joy follow you. But sitting there and screaming and yelling about what the CEO of Starbucks makes is not going to satisfy anyone, certainly not the 50 million who are depending upon him and the 380,000 who work for Starbucks as well. They need a good CEO who’s making proper decisions, and if he gets paid more money, everyone does better.

Listen to John Curley weekday afternoons from 3 – 7 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

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