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January 1, 1936 |
|Alma mater||San Diego State University (B.A., 1959)|
|Known for||founding Costco|
Early life and education
He was born January 1, 1936, into a Catholic working-class family in Pittsburgh, Pennsylvania. He attended Helix High School in La Mesa, California, and earned an AA at San Diego City College in 1955. He earned a BA from San Diego State University in 1959.
After he started as a bagger at FedMart in 1954, he discovered that he loved the retail business, and was excited by the opportunities at this rapidly-growing retailer. At FedMart, he worked his way up to executive vice president in charge of merchandising and operations. He was a vice president of merchandising for Builders Emporium 1977-1978, and an executive vice president for the Price Company 1978-1979. From 1979-1983, he worked with Sinegal/Chamberlain and Associates, a company which acted as a broker and sales representative for food and non-food products. Together with Seattle retailer Jeff Brotman, he co-founded Costco; and, from 1983 until his January 2012 retirement, Sinegal was Costco's President and CEO. He remains on Costco's Board of Directors. As CEO, Sinegal was well known for traveling to each location every year, to inspect them personally—a task that virtually all major retail chain leaders delegate to subordinates. Sinegal's innovations made Costco the first "warehouse club" to include fresh food, eye-care clinics, pharmacies, and gas stations in its mix of goods and services.
Sinegal was a protégé of the legendary Sol Price, widely considered to be the 'father' of the "warehouse store" concept (i.e., selling high volumes of a small variety of goods, at supposedly 'wholesale'-level-low prices, to a select group of customers—who pay a membership fee in exchange for the right to shop there). Sinegal is known for a benevolent style of management rooted in the belief that employees who are treated well, will in turn, treat/serve customers well. Sinegal, through Costco, provided his employees—at every level of the company, including the stores—compensation and benefits that are much higher than retail industry norms. For example, over 90% of Costco employees qualify for employer-sponsored health insurance; the U.S. retail industry average is just under sixty percent. As a result, Costco has the lowest employee turnover rate in retail.
In 1993, when growing competition threatened both Price Club and Costco Wholesale, Sinegal was invited to a partial merger. The two companies entered into a partial merger just after Price’s earnings dropped to 40%. The new company, named PriceCostco, Inc., focused heavily on international expansion, opening stores in Mexico, South Korea, and England. Despite best efforts to recover losses, sales continued to drop. Disagreement between the two leaders, Robert Price and Jim Sinegal, regarding company direction and recovery policies soon left the merger in tatters. The breakup was formally announced in 1994. Price’s breakaway company was named as Price Enterprises. Sinegal still continued to manage PriceCostco, Inc.
In 1997, the name of Sinegal’s company was changed to Costco Wholesale.
In an interview published in the Houston Chronicle on July 17, 2005, he told Steven Greenhouse that he did not care about Wall Street analysts who had criticized him for putting good treatment of employees and customers ahead of pleasing shareholders. Investors might want higher earnings, but Sinegal stated, “We want to build a company that will still be here 50 and 60 years from now." A favorite quote attributed to Sinegal, in part about his philosophy on dealing with success, is, “you have to take the shit with the sugar”. Investors who bought $10,000 of Costco stock in 1992 found it worth $43,564 just ten years later (a return of 354% [15.855%, annually]). A 2012 CNBC documentary stated that from 1985 until Sinegal's retirement, the stock's value had increased by five thousand percent. Costco's two highest-sales years to date, were Sinegal's final two years as CEO.
According to Costco's Proxy statement filed for 2011, Sinegal earned $350,000 in base pay, with additional funds coming from bonuses, stock/option awards and other compensations, totaling $2,191,159 . This amount does not reflect grants of plan-based awards, outstanding equity awards, or changes to other potential Costco-related holdings.
In the early-2000s, Sinegal was part of an eleventh-hour, local ownership group that committed to invest $450 million ($150 million from each of the three co-owners) for the renovation of Seattle's KeyArena, and to purchase the NBA's Seattle SuperSonics franchise. The bid failed, however, as NBA commissioner David Stern—displeased that state and local taxpayers and politicians refused the NBA's demands that they pay for a new arena, in order to keep the team in Washington—had already made a private deal with an Oklahoma-based ownership group to move the team to Oklahoma City (where it was renamed the Oklahoma City Thunder).
- Allison, Melissa, "Costco's colorful CEO, co-founder Jim Sinegal to retire", The Seattle Times, August 31, 2011
- The Market's Best Managers - Forbes.com, Forbes.com
- Brendan Wood International Announces 24 TopGun CEOs in the US, Reuters.com
- Mayor Nickels announces local effort to buy Sonics, renovate KeyArena
- Schmit, Julie (September 23, 2004) Costco wins loyalty with bulky bargains USA Today, accessed March 1, 2012
- Political donations Political donations