By Paul Hodgson, Contributor There’s been a lot of publicity lately for CEOs earning $1 in base salary – the likes of Larry Ellison at Oracle, John Mackey at Whole Foods and Meg Whitman at Hewlett-Packard, though it is only John Mackey who is restrained elsewhere in his package, the others can earn millions in stock and incentives. …read more
Source: FULL ARTICLE at Forbes Latest
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The organic grocery store chain evidently wants to be more than just a chain of organic grocery stores, as it will soon open its first “upscale health resort.” Whole Foods co-founder John Mackey told USA Today that the first resort would likely open near Austin, Texas, in the next three years.
USA Today compares the planned resorts to the famous Canyon Ranch chain of health resorts and day spas. But Mackey told the paper that the idea actually began internally after a successful program to improve its employees’ eating and lifestyle habits.
While Whole Foods clearly has plenty of expertise when it comes to healthy eating, it seems a bit of a stretch for a grocery chain to make the jump into the world of spas and hospitality. But the company has a built-in advantage in the form of its brand recognition and customer base. Mackey says the resorts will bear the Whole Foods name, which should attract the chain’s health-conscious customers.
And those customers tend to be more affluent, which doesn’t hurt the resort’s prospects. Whole Foods‘ pricey groceries have earned it the nickname “Whole Paycheck,” so anyone who shops there on a regular basis probably has more disposable income than the average American. And that means they’re a lot more likely to be able to afford spa weekends and resort stays.
Finally, there is a precedent for food chains getting into the hotel business, though it’s probably not an example that Whole Foods is likely to talk about in its promotional materials. Back in 2001, McDonald’s decided to try opening a luxury hotel in Zurich, Switzerland, calling it the Golden Arch Hotel. Two locations were built in the country, but the venture failed after a couple of years in operation.
We’ll see if the Whole Foods resort has any more luck in the hospitality game.
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.
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By Alyce Lomax, The Motley Fool
Filed under: Investing
Editor’s note: A previous version of this article erroneously referred and linked to an out-of-date version of the
Forbes/GMIRatings list of most trustworthy companies. The Fool and the author regret the error.
To say that America suffers from a trust deficit these days is an understatement. Many of the largest American institutions don’t seem to be on the side of regular citizens. This goes for corporate America as well as government, media, and other institutions. Creepy actions perpetrated by some corporations have continued despite the lessons we all should have learned from the financial crisis in 2008, and certainly have led to a sad outcome: the sense that many corporations are bad.
When it comes to corporate trust issues, investors should be aware that they can pay a high price — literally — for putting money into companies that show signs of untrustworthiness. Any financial news source on any given day will disseminate examples of things that make you go “Hmm.” Take corruption; a huge corporate entity was implicated in such shenanigans just yesterday.
Microsoft is being investigated by the Department of Justice and the Securities and Exchange Commission. Some of its business partners allegedly bribed officials to grease the wheels for software contracts in China, Italy, and Romania.
Although word has it that the investigation is preliminary and Microsoft hasn’t been officially accused of any wrongdoing, such probes aren’t even that unusual in corporate America. Wal-Mart is still under investigation for similar concerns in Mexico and other countries. In January, even more damning evidence came to light in that case. Emails were released indicating that CEO Mike Duke and other Wal-Mart executives knew about the bribery as far back as 2005. They had previously claimed they had no idea about such activity.
According to The Wall Street Journal, right now, dozens of investigations related to the Foreign Corrupt Practices Act, which bans bribes to officials overseas, are being conducted.
Ranking for trust
Of course, corruption and bribery aren’t the only factors that drain trust from investments. Corporate managements and boards too often make headlines for plenty of other factors that remove confidence from our portfolios.
Take outrageous CEO salaries for abysmal business and stock performance. Or managements that make cost-cutting decisions to juice short-term profits, which can and often does lead to disasters, long-term value destruction, and deterioration of competitive advantage. Once in a while, they even massage their numbers using accounting loopholes, or worse, perpetrate outright fraud.
Not all companies’ managements are untrustworthy, though, even if critical thinking is crucial for the investment toolbox these days. And when companies are good, they’re really good, boosting value for shareholders as well as everyone else they touch, including the overall economy. (The recent book Conscious Capitalism, by John Mackey and Raj Sisodia, is …read more
Source: FULL ARTICLE at DailyFinance
By Brian Richards, The Motley Fool
Filed under: Investing
Last month, I interviewed Whole Foods Market co-founder and co-CEO John Mackey in front of a live studio audience at Motley Fool headquarters. Mackey recently published Conscious Capitalism: Liberating the Heroic Spirit of Business with co-author Raj Sisodia, and he stopped by our Alexandria, Va., offices on his book tour.
The core of their book is that businesses must move away from the so-called “Friedman doctrine,” which posits that the sole aim of a business is to create value for its investors.
In the clip below, I ask Mackey where he thinks Friedman went wrong. In the clip below, Mackey explains why shareholders are just one of the many stakeholders a business must serve, as well as how capitalism can change its reputation. (Run time is 6 minutes, 4 seconds. There’s also a lightly edited transcript below.)
Brian Richards: The prevailing narrative of American capitalism has really been the Friedman doctrine, which is basically that shareholder value is the be-all and the end-all of a company. You mention early in the book that Milton Friedman is an intellectual hero of yours, even though you pretty vehemently disagree with him on this point.
This book is a treatise on why that is wrong and what should replace it. So tell us, why is Friedman wrong?
John Mackey: Well, I wouldn’t quite put it that way, but one way to think about it is that Gallup shows that the reputation of big business in America now has dropped down to a 19% approval rating. That means 81% of the people do not really approve of big business. It’s got a terrible brand. It’s seen as selfish and greedy and exploitative. The narrative has been captured by the critics and the enemies of business, the enemies of capitalism. And yet business has been the greatest value creator in the world, as we point out in the first chapter — we show how humanity has been lifted up by business and by capitalism in the last 200 years.
Two hundred years ago, 85% of the people alive lived on less than one dollar a day — today’s dollars. Today, that’s down to 16%. Over 90% of the people alive 200 years ago were illiterate. Today, that’s down to 14%. The average lifespan 200 years ago was only 30. Today, it’s 68 in the world, 78 in the United States. And business and capitalism are largely responsible for this and don’t get credit for it, but it’s true nevertheless.
And so, in the United States now we see 7.9% unemployment; it’s even higher than that if you count all the people that stopped looking for work. We’ve got the GDP per capita and the per-capita income has declined in the past 10 years. I think that’s the first time in American history you’ve seen a 10-year decline. We also saw economic freedom in decline in America that, as little as the year 2000, the economic freedom index …read more
Source: FULL ARTICLE at DailyFinance
By Tim Beyers and Alison Southwick, The Motley Fool
Filed under: Investing
Now that John Mackey‘s book, Conscious Capitalism: Liberating the Heroic Spirit of Business, is a best-seller, more of the world is talking about doing good while doing business. Nowhere was that more true than at the South by Southwest Interactive festival over the weekend in Austin, Texas.
Mackey helps lead organic grocer Whole Foods Market , and he does he so with a purpose: Give the world healthier dietary choices. In preaching conscious capitalism, Mackey argues that free-market capitalism can and should be a vehicle for achieving higher purposes.
All of which sounds great, of course. But does doing good in this way lead to larger profits? How can we know? The Motley Fool’s Alison Southwick asks Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova for his perspective in the following video. Please watch, and then leave a comment to let us know what you think.
It’s hard to believe that a grocery store could return investors more than 30 times their initial investment, but that’s just what Whole Foods has done for those who saw the organic trend coming some 20 years ago. However, it may not be too late to participate in the long-term growth of this organic foods powerhouse. In this brand-new premium report on the company, we walk through the key must-know items for every Whole Foods investor, including the main opportunities and threats facing the company. So make sure to claim your copy today by clicking here.
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Source: FULL ARTICLE at DailyFinance
By Erika Morphy, Contributor Whole Foods sells organic, locally-sourced, sustainable products. If one were to assign a philosophy or political orientation to the grocery store chain it would probably be Liberal Democrat. Surely you’d assume it was an entity concerned about global warning. Well you’d be wrong. John Mackey, the co-founder and CEO of Whole Foods Market, has astounded his customers with statements to the contrary. Four years ago he royally infuriated many of the store’s shoppers with his editorial on Obamacare in the Wall Street Journal, which he began with a red-meat quote on socialism.
Source: FULL ARTICLE at Forbes Latest
