James Sinegal Bio, Age, Leadership Style, Book, Salary, Quotes, House

James Sinegal Biography | James Dennis Sinegal

James Sinegal, also known as Jim Sinegal or James Dennis Senegal, is a retired American billionaire businessman who is the co-founder and former CEO of the Costco Wholesale Corporation, an international retail chain.

James Sinegal Age

Sinegal was born on January 1, 1936, Pittsburgh, PA. He is 83 years as of 2019.

James Sinegal Image

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James Sinegal Family

He fathered three children with his wife Janet.

James Sinegal Son

He has a son named David Sinegal Sr. who is an American businessman and the owner of the Sinegal Estate Winery in St. Helena, California. David Sinegal is the son of James Sinegal, the founder, and former CEO & President of Costco Wholesale.

James Sinegal Early Life and Education

He was born in Pittsburgh, Pennsylvania, on January 1, 1936, into a Catholic working-class family. He attended primary school in St. Lawrence O’Toole, Central Catholic High School (Pittsburgh), Helix High School in La Mesa, California, and in 1955 he received an AA from San Diego City College. He attended State University of San Diego and graduated in 1959 with a Bachelor of Arts degree.

James Sinegal Professional Experiences Prior To Becoming CEO

He was a protégé to Sol Price. Price was the first person to develop the concept of a warehouse that sold a high quantity of goods for low prices to members only (US NEWS, 2009). He was voted as one of America’s best leaders by USNEWS in 2009 (US NEWS, 2009). Sinegal believes in keeping prices so low that other stores cannot compete. The profit margins are extremely low, less than 3 percent (US NEWS, 2009). This is offset, however, by membership fees. Regardless of the low-profit margins, Costco’s profit was $ 1.3 billion in 2008 (US NEWS, 2009).

Sinegal, to the annoyance of his stockholders and competitors, takes good care of his employees. He believes if you pay employees good wages and provide good benefits that those employees will make a career at Costco. He makes quality his top priority and considers it the most important aspect of the retail business. By treating his employees well, that correlates to quality customer service.

James Sinegal  Career

After Sinegal began as a basic food item bagger at FedMart in 1955, he found that he adored the retail business, and was energized by the open doors at this quickly developing retailer. At FedMart, he stirred his way up to the official VP accountable for marketing and tasks. He was a VP of marketing for Builders Emporium from 1977 to 1978, an official VP at the Cost Company from 1978 to 1979. From 1979 to 1983, he worked with Sinegal/Chamberlin and Associates, an organization that went about as an agent and deals delegate for sustenance and non-nourishment items. Together with Seattle retailer Jeff Brotman, he helped to establish Costco. From 1983 until his December 31, 2011 retirement, Sinegal filled in as Costco’s leader and CEO. As CEO, Sinegal was notable for heading out to every area consistently, to investigate them by and by, an errand that for all intents and purposes all real retail affix pioneers representative to subordinates.[citation needed] Sinegal’s advancements made Costco the principal “distribution center club” to incorporate new sustenance, eye-care facilities, drug stores, and corner stores in its blend of merchandise and ventures.

Sinegal was a protégé of Sol Price, generally viewed as the “father” of the “distribution center club” idea. He is known for a generous style of the executives established in the conviction that representatives who are dealt with well, will thus, treat/work well for clients. Sinegal, through Costco, gave his workers — at each degree of the organization, including the stores — remuneration and advantages that are a lot higher than retail industry standards. For instance, over 90% of Costco representatives meet all requirements for boss supported medical coverage; the U.S. retail industry normal is just shy of 60%. Thus, Costco has the most reduced worker turnover rate in retail.

In 1993, when developing challenge compromised both Price Club and Costco Wholesale, Sinegal was welcome to a fractional merger. The two organizations went into a fractional merger soon after Price’s profit dropped to 40%. The new organization, named PriceCostco, Inc., concentrated vigorously on worldwide development, opening stores in Mexico, South Korea, and England. Notwithstanding best endeavors to recoup misfortunes, deals kept on dropping. Robert Price and Jim Sinegal had various suppositions with respect to organization heading and recuperation arrangements. The separation was officially declared in 1994. Value’s breakaway organization was named as Price Enterprises. Sinegal still kept on overseeing PriceCostco, Inc.

In 1997, the name of Sinegal’s organization was changed to Costco Wholesale.

In a meeting distributed in the Houston Chronicle on July 17, 2005, he revealed to Steven Greenhouse that he couldn’t have cared less about Wall Street examiners who had scrutinized him for putting the great treatment of workers and clients in front of satisfying investors. Financial specialists may need higher income, yet Sinegal expressed, “We need to assemble an organization that will, in any case, be here 50 and a long time from now.” A most loved statement credited to Sinegal, to a limited extent about his way of thinking on managing achievement, is, “You need to take the poo with the sugar.” Investors who purchased $10,000 of Costco stock in 1992 thought that it was worth $43,564 only ten years after the fact — an arrival of 354% (15.855%, every year). A 2012 CNBC narrative expressed that from 1985 until Sinegal’s retirement, the stock’s worth had expanded by five thousand percent. Costco’s two most elevated deals a long time to date were Sinegal’s last two years as CEO.

In 2009, Sinegal was viewed as one of “The TopGun CEOs” by Brendan Wood International, a warning office.

James Sinegal Costco

Together with Seattle retailer Jeff Brotman, he co-founded Costco. From 1983 until his December 31, 2011 retirement, Sinegal served as Costco’s president and CEO. 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, 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. Robert Price and Jim Sinegal had different opinions regarding company direction and recovery policies. 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. Costco’s two highest-sales years to date were Sinegal’s final two years as CEO

On January 1, 2012, Sinegal retired as CEO of Costco Wholesale, continued to serve as Company Advisor and Director, and was succeeded by his long-term Costco colleague W. Craig Jelinek in 2012. Sinegal retired from the Board of Directors in January 2018.

James Sinegal House

James Sinegal House
James Sinegal House

James Sinegal Book

A Costco manager, that’s who said James Sinegal, who founded Costco in 1983 and was CEO until his retirement in 2011. Sinegal and Miner spoke to professor Zeynep Ton’s “Management of Services: Concepts, Design, and Delivery” class May 7, where Sinegal described the culture he spent decades cultivating at the company and that he considers critical to its success.

Costco was one of four companies Ton focused on in her 2014 book “The Good Jobs Strategy,” which examined how companies invest in employees to improve operations and drive profits. In the book, Ton details four “operational choices” central to the strategy: offer less, standardize and empower, cross-train, and operate with slack. All play into Costco’s success.

Today, the wholesale giant is the second largest retailer in the world with more than $126.2 billion in sales in 2017. The company has 225,000 employees in 723 stores around the globe. It promotes leadership from within and consistently beats out its competitors, boasting a 12.9 percent annual growth rate, Sinegal said.

But with its unusual retail model for the time ­— forklifts zipping around to pull pallets of product from ceiling-height shelves, cavernous warehouses, and membership fees to shop in them — the company didn’t always see those numbers, Sinegal said. A foray into the Midwest in the late ’80s proved disastrous, though the company later re-entered the market there.

“Everyone is always going to question what business model you have,” Sinegal said. “They’re going to say you probably won’t be in business six months from now. We said ‘How do we overcome all of the objections people are going to have to shop with us?’”

Focus inward, on the culture

The answer was to focus inward and look at things from the members’ viewpoint, he said, developing a culture that ensured a good experience by carrying a generous return policy on top-quality products, always passing on the savings of purchasing those products at wholesale on to the customers, spurning the use of misleading advertisements, and offering high wages and good benefits to employees.

“No one was going to be able to say we’re making money off the backs of our employees, because we were going to pay the highest wages in all of retail,” Sinegal said. Seventy cents of every dollar spent by Costco goes to employee wages, he noted, and the company has a 7 percent turnover rate, compared to 60 to 70 percent at other retailers, Sinegal said.

Culture isn’t the most important thing — it’s the only thing

For Sinegal, that culture of promoting passion, integrity, ownership, and motivation in his employees and ensuring that the customer can trust that they are always getting the best deal by shopping with Costco is the core of the company and the key to its success.

Sinegal drove the point home by describing a time when the company was selling Calvin Klein men’s jeans for $29.99 a pair. The garments sold out as fast as they could be stocked, he said, and when the company secured a deal on an order, paying only $22.99 per pair, Sinegal said it would have been easy to continue selling the discounted jeans at the higher price for a huge profit. But that’s not what he did.

“We pass the savings on to the customer, every time. Do you know how tempting it is to make another $7 on a pair? But once you do it, it’s like taking heroin. You can’t stop.”

With a sky-high internal promotion rate, it’s a philosophy that Sinegal worked to instill in everyone who worked for him.

Leading from the floor

During his time at the head of the company, Sinegal spent about 200 days of each year visiting warehouses. He felt that was crucial to spend as much time as possible on the frontlines, where money was being made and merchandise was being sold.

But his goal wasn’t to parachute in and tear the place apart. Rather, it was to provide constructive criticism to his managers and to be sure they were constantly teaching their employees.

“The biggest mistake any boss can make is running around and doing everything yourself. If you haven’t learned to delegate, you haven’t learned a very valuable lesson,” Sinegal said. “If I could stock every shelf, ring every register, buy every product and push every cart, I would. But I can’t, and you’ve got to hire people to do it. You want them to do it as well as if you were doing it, and you only do that by teaching.”

James Sinegal And Jeffrey Brotman

Together with Seattle retailer Jeff Brotman, he co-founded Costco. From 1983 until his December 31, 2011 retirement, Sinegal served as Costco’s president and CEO. Jeffrey Hart Brotman was an American attorney. He was the co-founder and chairman of Costco Wholesale Corporation.

James Sinegal Quotes

“In the final analysis, you get what you pay for.”

“It doesn’t do Costco any good if nobody can afford to buy anything.”

“It’s even more important to hire good people and give them good jobs and good wages. They are the people who are going to run your business.”

“One of the strengths of our nation has always been a strong middle class who could afford their own homes and send their children to school.”

“We always strive to be the best in the wage package.”

“We are a company that promotes 100% within the company.”

“We want to turn our inventory faster than our people.”

“We would rather have our employees running our business.”

“We’ve always been in favor of improved wages for workers. When you have a strong middle class, they want to buy more stuff at Costco.”

“When employees are happy, they are your very best ambassadors.”

“You destroy the initiative of the working people if they don’t feel they have a fighting chance to be a part of the American Dream.”

“You don’t have a very motivated working class, it starts to affect the dynamics of the economy. If workers are disenchanted and disenfranchised, productivity losses will go along with that.”

“You just can’t get too focused on worrying about what’s going to happen in the next quarter. You have to worry about where the business is headed long-term.”

“If we take care of the business and keep our eye on the goal line, the stock price will take care of itself.”

James Sinegal Salary

In fiscal 2011, Costco Wholesale CEO Sinegal took a pay cut of 38 percent, earning $2.2 million compared to $3.5 million a year previously. His salary remained constant at $350,000 for years, and his $198,400 bonus for the fiscal year ending in August was about the same as it was the year before.

James Sinegal Death

He is still alive.

James Sinegal Morningstar

CHICAGOJan. 4, 2012 /PRNewswire/ — James Sinegal, CEO of Costco Wholesale Corporation, has been named Morningstar’s 2011 CEO of the Year. Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, annually recognizes a chief executive who exhibits exemplary corporate stewardship, demonstrates independent thinking, creates lasting value for shareholders, and has put his or her stamp on an industry.

The two other nominees for Morningstar’s 2011 CEO of the Year award were Jeffrey Bezos of Amazon.com and John Pinkerton of Range Resources.

“This year’s nominees each have added intrinsic value to the companies they run,” said Paul Larson, chief equities strategist and editor of Morningstar StockInvestor. “James Sinegal, who has served as CEO since co-founding Costco in 1983, has created and maintained value for all company stakeholders during his tenure. The average Costco employee is attractively compensated relative to other retail workers, keeping employee turnover low and productivity high. Although its top-notch benefits package and superior wages are costly on the surface, the firm is reimbursed handsomely, generating more than $500,000 in sales per employee.

“At the same time, the company remains a low-cost producer for its customers. Costco also has reasonable management compensation levels and a high level of communication and transparency with investors. The company has grown considerably over the last few decades and we think it’s well positioned to continue expanding internationally.”

While the total annualized return of the S&P 500 has been nearly flat over the last five years, Costco shareholders have seen a return of nearly 12 percent annualized over the same period. Notably, in fiscal 2011, Sinegal helped Costco achieve comparable-club sales of 10%, 10 basis points of operating margin expansion to 2.8%, a 14.2% return on invested capital, and more than $1 billion returned to shareholders in repurchases and dividends.

Under Sinegal’s leadership, Costco has established an enviable position among retailers:

  • With a high-quality selection at rock-bottom prices that make Costco a relevant shopping destination for consumers and small businesses alike, Morningstar believes the company is poised to capture incremental market share from other retail channels as consumers look for ways to stretch their budgets during a post-recessionary environment.
  • Costco continues to generate healthy increases in club traffic, suggesting that consumers may be reluctant to return to traditional retailers and grocers as economic conditions further stabilize.
  • The company converts its inventory into cash before payments are due to suppliers, an efficiency that leads to returns on invested capital that are exceptionally high for a warehouse club chain.
  • With about 600 clubs worldwide and the early success of warehouse clubs in markets outside the United States, Costco has attractive global growth opportunities, and international expansion will be one of the company’s growth engines going forward.

“We consider Costco to have an ‘economic moat,’ or set of sustainable competitive advantages, in light of its considerable bargaining power, significant economies of scale, and brand that is synonymous with low prices,” Larson added. “Although competition with mass merchants is fierce, we believe favorable pricing from suppliers and industry-leading inventory turnover will allow Costco to consistently generate positive profits over time. As long as management continues to align the company’s product assortment with consumer demand and allocate capital wisely, we see few reasons why Costco’s already narrow economic moat won’t expand.”

Morningstar’s Economic Moat™ rating is a proprietary measure of a company’s sustainable competitive advantages, and Morningstar assigns each company a rating of Wide, Narrow, or None. An economic moat can be obtained through five primary sources: Efficient Scale, a limited market where there is little incentive for new entrants; Network Effect, a situation where incremental customers add value for existing customers; Cost Advantage; Intangible Assets such as patents or strong brands; and Switching Costs for customers. Morningstar also evaluates a company’s “moat trend,” which indicates whether its Economic Moat is strengthening or weakening.

Morningstar introduced its CEO of the Year award in January 2000. Winners are chosen by Morningstar equity analysts based on their in-depth independent research.

For Morningstar’s commentary about Sinegal, go to: http://www.morningstar.com/goto/ceo2011.

For the complete list of past winners, go to: http://corporate.morningstar.com/CEOhalloffame.

James Sinegal Leadership Style

Sinegal’s management style reflected his egalitarian business philosophy. Callers to the executive offices in Issaqua were surprised to find him answering his own phone. Cluttered and furnished with a second-hand desk and chair, his office was always open to staff who wished to stop in and talk. Sinegal felt that an open-door policy throughout Costco fostered more managerial accountability. He told Ethix magazine, “If warehouse managers know that their own regional bosses have open-door policies and will talk to any employees about their issues, then they are going to be a little faster to talk to the troubled employees themselves. They don’t want the problems to come back to them through their bosses” (March 2003).

Sinegal tried to personally visit every Costco warehouse at least once a year, ensuring that every company employee would, in theory, have a chance to talk to the CEO himself. At the same time, Sinegal was not soft when it came to adherence to company performance benchmarks. He was known for running tough budget meetings, dressing down buyers and managers who failed to meet profit-margin goals.

Where Does James Sinegal Live

He resides at Hunts Point, WA.

James Sinegal Net Worth

Sinegal is the co-founder and former CEO of Costco who has an estimated net worth of $2 billion and an annual salary of $350 thousand. Costco is an international retail chain with a membership-only warehouse club that provides a wide selection of merchandise. It is the second largest retailer in the United States, the seventh largest retailer in the world and the largest membership warehouse club chain in the United States as of July 2012.
He started accumulating his estimated net worth of $2 billion when he worked as a bagger at FedMart in 1954. He has worked his way up to an executive vice president who is in charge of merchandising and operation. Between 1977 and 1978, he was a vice president of merchandising for Builders Emporium. From 1978 to 1979, he became the vice president for the Price Company.