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Comment by temp667 | Hacker News Reader

And you have only one CEO - so their comp is expensive, but not hugely expensive relative to total org costs.

Apple has Tim Cook. In terms of investors evaluation of his ability to generate profits - let's say apple is going to do $400B in sales, and you think Tim's approach over time will yield a 3% improved margin. Is he then worth $12B/year? CEO's have enormous influence on a companies direction.

Investors will automate MANY MANY things before they automotive the CEO's job.

Let's be a bit serious. What would make Walmart investors more nervous:

1) Being asked to pay all workers $35/hr, or

2) paying the CEO an extra $1M/year?

1.6M employees * 40K+ pay increase = $64 Billion per YEAR. Let's get a grip on what

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> ...you think Tim's approach over time will yield a 3% improved margin

It's not so much about a little extra yield, it's about not running the company into the ground, which is far harder than it may appear.

If a CEO manages to leave the company in as good a condition as they found it, that's already worth a fortune.

Walmart's annual profit is ~$130B so what I'm seeing is that yes in fact it's perfectly feasible for 1.6M Walmart employees to get a $40K/yr raise.

You're looking at gross profit, but you really need to look at net income, which averages about $13B.

Companies like Wal-Mart generally have low profit margins, because there's not much of a barrier of entry and no valuable brand or intellectual property.

Please don't make up stuff on HN - if you don't have something accurate to share or if it wouldn't support your point please still avoid making things up.

Walmart's profit margin is generally 2-3% and is generally $10 - $20B per year. [1]

And if Walmart were making $100B, the comp for their CEO be far from a major expense to the corp.

[1] - https://finance.yahoo.com/quote/WMT/financials/

I think you might be missing the part that says "All numbers in thousands" on that table you've linked.

No he isn't.

I think you might be misunderstanding what "All numbers in thousands" means on that table she linked.

EDIT: To be clear, Walmart's revenue in 2020 was 559 Billion with a B[0].

We can see on that table[1] that if we take the values listed in the "Total Revenue" row (559 Million with an M, 523 Million with an M, etc) and multiply them by 1,000 according to the directions ("All numbers in thousands") on the chart that we get a result which aligns with reality.

To be even more clear, we can take the values listed in the "Gross Profit" row, multiply by 1,000 as instructed by the directions, and see that yes Walmart's annual *gross profit* is ~130B

138,836,000 * 1,000 = 138,836,000,000

[0]https://www.forbes.com/sites/shelleykohan/2021/02/18/walmart...

[1]https://finance.yahoo.com/quote/WMT/financials/

You're looking at the wrong number. See how it says "Operating Expenses" right below "Gross Income"? You're going to need to subtract that, then you're at operating income. Subtract operating income expenses and you're at pre-tax income. Subtract the tax and then you have what you might actually consider "profit". It's less than 10% of your original figure.

Thank you for actually helping!

Why are you trolling on HN?

Edit: yes, Walmart's revenue is 500+ billion. What does that have to do with anything discussed here? temp667's comment is correct.

Edit 2: first you didn't understand what "revenue" is, now you don't understand what "gross profit" is.

You seem to be misunderstanding what "Gross Profit" represents.

It's also perfectly feasible for them to pay more rent for their stores, or pay their suppliers more for their products, but why would they?

The general idea is that if your workers are well paid and the store is well kept (if you would accept that "pay more rent" is generally the same as "spending more on the building") then customers will be more happy/satisfied and thus return more often, spend more, and recommend your store to friends thus increasing your revenue.

Do you honestly think they would come out ahead in this scenario?

Yes, comparing CEO compensation to what line workers make is a standard play for the outrage promoters, but it really isn't related. When one slice of the pie is already small, making it smaller doesn't make a lot more available for everyone else.

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