Summary
Costco shareholders voted overwhelmingly (98%) against a proposal by a conservative think tank, the National Center for Public Policy Research, to assess risks linked to the company’s diversity, equity, and inclusion (DEI) programs.
Costco’s board supported DEI initiatives, dismissing the proposal as partisan and unnecessary.
This rejection contrasts with trends in other companies scaling back DEI efforts.
The vote comes amid new federal rules from Trump targeting DEI initiatives in federal agencies, potentially impacting private vendors working with the government.
A corporation not being absolute trash. Let’s hope they deal fairly with their unionized employees.
Not just the corporation, but their shareholders. Republicans have been worshipping at the altar of Shareholder Value since the 80’s.
Here you go, these shareholders just told you what they value! Will Republicans listen?
Narrator: The Republican politicians did not listen.
I want Samuel L for my narrator on this one.
Not just the corporation, but their shareholders.
The “shareholders” are mostly just Vanguard/Black Rock/etc. mutual fund managers who always vote for whatever the board recommends. So yes, just the corporation.
Shareholder revolts against board proposals are exceedingly rare, and basically only happen when some individual rich fuck owns way too many shares.
Right, but those mutual fund managers don’t just vote “yes” because they aren’t paying attention. If anything, they are paying lots of attention, and get special treatment, since they own so much of the company, and were likely consulted ahead of this move.
And they are most definitely not bleeding-heart liberals. If they voted for this proposal it’s because they think it will lead to better outcomes for the company.
If anything, they are paying lots of attention, and get special treatment, since they own so much of the company
Let’s be clear about this: the fund managers own nothing. They are employed to manage the mutual funds that other people – you and me and everybody else with a retirement account – actually own. They disenfranchise us, the actual owners.
(Yes, technically, it’s true that the individual company shares are owned by the corporate entity of the mutual fund itself, and that what the mom & pop investors technically own shares in that fund. But that does not make it fair to say that anybody but the mom & pop investors deserve to vote the individual company shares, because it’s their money that’s being used for the whole thing!)
And they are most definitely not bleeding-heart liberals. If they voted for this proposal it’s because they think it will lead to better outcomes for the company.
If keeping DEI is better, why didn’t they demand it for all the other corporations whose boards didn’t propose keeping it? The answer is, again, the fund managers almost always just rubber-stamp the board. To claim that fund managers are actually forming their own opinion on the efficacy of DEI and influencing corporate governance accordingly is simply not true.
In theory, mutual fund managers are acting on mutual fund share holders’ behalf. In practice, “shareholders” of most large corporations are effectively asleep at the wheel – the investment industry literally calls shares held in index funds “dumb money” – and boards of directors can do pretty much whatever the fuck they want. In the era of huge mutual funds, especially index funds where the even the choice of which companies to own shares in is no longer a feedback mechanism, the check & balance of shareholder control is basically broken.
The fix is “pass-through voting,” by the way:
To claim that fund managers are actually forming their own opinion on the efficacy of DEI and influencing corporate governance accordingly is simply not true.
That may a fair take, but take a moment to turn that around. The fact that fund managers are not forming their own opinion against the efficacy of DEI and influencing corporate governance accordingly is a sign that it’s simply not as harmful as Republicans let on, and may actually be helpful. Because they know how to wield that influence if they feel they need to in order to preserve their funds’ value.
I didn’t say not forming their own opinion “against;” I said “on” – i.e., not forming their own opinion about the topic at all, in either direction. It is not an argument that can be “turned around” in the way you claim.
When boards oppose DEI, fund managers support the board. When boards support DEI, fund managers support the board. My point this entire time has been that there is no influence being wielded here. The companies that are cancelling DEI policies are doing so on their own boards’/execs’ initiative with no meaningful shareholder control, and the companies that are keeping DEI policies are likewise doing so on their own boards’/execs’ initiative with no meaningful shareholder control.
Obligatory fuck Reagan
Republicans: Not like that.
YoU sAy ShArEhOlDeRs, I sAy RaDicAl LeFt OpErAtIvEs
98%?? I love costco
Welcome to Costco. I love you.
Yeah I was on the fence about getting a Costco membership since I am single and dont shop much.
But just for the few times I need stuff that is available at Costco I will get a membership.
Even if I end up paying a little more overall.
My vehicle makes the gas prices worth the membership, even if that was all I purchased.
Shit. I might just re-up to the executive membership this year. I don’t shop there as much as I used to but I could still probably manage to get enough rewards to cover the membership price.
One thing to look into is their car insurance. It dropped my rate by $100 a year which was more then the cost of membership.
They do sell stuff in larger packages than most stores, but very little of it is actually in such an absurd quantity that a household of 1 or 2 couldn’t reasonably use it. Another thing I appreciate is that since they typically only carry 2 or 3 options for any given product, I feel reasonably confident that their buyers have vetted those products well, and the non-staple things we do buy generally seem to be pretty solid quality.
It’s also one of my first shopping stops for electronics and appliances, since they usually offer include and extra year or 3 of warranty coverage.
I gotta have somewhere to purchase the metric shit tons of beer I require to live in this country without constantly wanting to put a bullet in my brain, and Costco fits the bill nicely with its wide variety of local (and imported!) beer available for purchase at low, low prices every day. 🍻
Taking the edge off of the apocalyptic hellscape that is America in 2025. Thanks, Costco! 🤗
I pay for the $60/yr one. In the last year, I got a leaking car tire patched for $20, and did 3 quick trips to the warehouse for items on my shopping list.
Worth it.
FYI: for normal corporations (i.e. not ones with individual majority stockholders like Musk) shareholder votes are almost always dominated by votes from the big mutual funds, and the managers of those funds always vote for whatever the board recommends as a matter of policy. The actual mom & pop investors who own the shares through those mutual funds in their 401(k)s etc. are entirely disenfranchised.
In other words, the actual owners of Costco had mostly fuck-all to do with this. We’re just lucky that Costco’s board of directors isn’t terrible, for once.
Not always. I get proxy vote requests pretty often.
You also have the option to choose opinionated funds that only invest in things like green energy.
I’m not sure why you’re specifically focusing on mutual funds. Holding of public shares is supposed to be a passive income whether it’s individual investors (who are hopefully diversifying their investments), mutual funds, ETFs, etc. The board works for the shareholders by collecting data, assessing that data, and then making recommendations so that investors don’t have to do that research. Sure, it’s possible that the shareholders vote against the advice of the board, but it’s pretty rare. If the board is out of step with the shareholders, they should probably be replaced. This is a virtuous cycle (or vicious cycle for other stocks) where Costco is seen as a fairly ethical company, so investors who are looking for stocks that meet their values choose companies like Costco (whether they are individual investors or investment vehicles marketed as fitting certain values). These investors choose a board who represents their values, so I don’t think, “we’re just lucky that Costco’s board of directors isn’t terrible,” I think it’s a part of this virtuous cycle.
I’m not sure why you’re specifically focusing on mutual funds. Holding of public shares is supposed to be a passive income whether it’s individual investors (who are hopefully diversifying their investments), mutual funds, ETFs, etc. The board works for the shareholders by collecting data, assessing that data, and then making recommendations so that investors don’t have to do that research. Sure, it’s possible that the shareholders vote against the advice of the board, but it’s pretty rare.
I’m focusing on mutual funds because, when you own shares of a fund instead of shares in the business directly, you don’t get to vote (usually) even if you want to.
And now I’m going to focus even more specifically:
This is a virtuous cycle (or vicious cycle for other stocks) where Costco is seen as a fairly ethical company, so investors who are looking for stocks that meet their values choose companies like Costco (whether they are individual investors or investment vehicles marketed as fitting certain values).
Most stocks these days are held not only in mutual funds, but in index mutual funds, where they literally don’t make the decision you just cited as the thing that keeps the corporate boards aligned with the shareholder values. They just buy every company weighted by market cap instead, and in so doing, jettison all of that kind of influence they would have otherwise had.
In summary, mom & pop investors (i.e. folks who invest entirely or almost entirely via the index funds offered by their 401(k)) are not only disenfranchised in terms of share voting, but also don’t actually choose what companies to invest in – the fund managers and 401(k) plan administrators have taken all of that power from them.
Do you see the problem yet?
spoiler
To be clear: the takeaway should not be “index funds bad” – I like index funds and own index funds. The takeaway should be "every mutual fund should be required by law to offer pass-through voting of shares.
Mutual funds are a systemic risk by being dumb money. Normally this is talked about in the context of index investing. The more money blindly tracks an index, the more that index becomes detached from reality. This causes measurable inefficiencies in the market [0]. In practice, this isn’t that big of a deal, since “follow the index” essentially means “do what the smart money does”, so the distortion is not that great.
In the context of voting, the analogous action would be abstaining (or voting with the majority of voting active shareholders). I suspect the reason this is not done is a combination of there not being enough active voting shareholders (as you say, that is why boards are a thing), and the risk of activist investors.
On a much smaller scale, we have something similar happening in my local HOA. The county owns about a dozen units as part of it’s public housing program. Combined with the low turnout at HOA meetings, and the 1 property = 1 vote, this means that they could vote for essentially anything they want.
In practice, their policy is to show up to all meetings but abstain from votes unless they are needed to make a quarum. If they are needed, they vote for whatever the consensus was among every else there.
[0] See the index effect. Being added to an index increases a stock’s value, despite there being no change to the underlying fundamentals.
What fucking risks you fucks? Hiring people with the wrong skin colors?
The news cycles since Trump won the election is fucking terrible. Every corporation is mask off and drop anything that might benefit the populace so that they go back to being cowboys and treat employees like shit.
I want to personally say fuck you to everyone that voted for Trump. I hope that you and all the members of your close circle that voted for Trump die a painful death, after being economically fucked out of any little wealth you have.
The world is better off without you cunts.
The gulags were populated for good reason. “Waaahhh communists killed millions in their gulags,” yeah, millions of Nazis. Yet apparently that still wasn’t enough.
Lol no, they killed literal civilians, the ones they swore to protect
Shareholders, if you keep that up, maybe I’ll grudgingly, once in a while, “think of the shareholders”.
The whole dei firing thing doesn’t make any sense. It’s not like unqualified people were hired.
Actually, that’s exactly what they think.
The anti-DEI crowd thinks exclusively in zero-sum outcomes. There is exactly one Best Candidate for a position, who happens to look like them. If a different candidate is hired, then the whole process is obviously unfair, because they didn’t hire the one
whiteright candidate.Right. Not sure why I used logic…
Anything that erodes the advantage of Cis Het White owners is a threat.
Once again, Costco surprises me with basic human decency that is largely missing in the corporate world. I know it’s not a high bar, not as if they’re on the forefront of progressivism, or anything. But it’s well beyond the average in the profit-driven and labor grinding society, and that sort of corporate action, among their other positives as an employer, should be recognized and supported. Good on you, Costco.
…called DEI programs “illegal, immoral and detrimental to shareholder value,”
Wrong, wrong, and only if they implemented DEI as a blind performance metric… Which is also wrong. You get half a point out of three, or 16.6%.
And with a grade that low, I’m completely justified in giving that person…
A Super F!
I wonder if Costco stock is a good buy right now. Currently $937 up from $300 in 2020. A P/E of 55, with 0.5% annual dividends paid quarterly.
With the new risk of being targeted by MAGAs for a boycott, I could see that being a problem. I don’t think Costco’s survival as a corporation depends on its stock. They do stock buybacks, which is going to be artificially inflating the price a bit.
If it drops significantly, I could see it being worth the pickup. Maybe I’ll sell some long put options.
The backlash against DEI is at the individual level imo. How people feel is the reality, see the economy (which is also an attribute of using the wrong metrics to measure performance as it relates to the consumer but that is a different topic).
Let’s see if I can explain it: So let’s say you’re an average white guy, and you know your company has a DEI program. You feel like you work very hard, or at least as hard as everyone else in your workplace, but you see that your minority coworkers get promotions or that the new hire for a better paid position than yours is a minority you start to feel as though you’re getting passed over because of your identity. This could be because it is a diverse workplace and so the best people for the promotion may just happen to be of other races or women. It could also be actual racism which I’m sure happens but it’s probably very very rare. But that doesn’t matter, what matters is that you see people who are different from you getting promoted, and you don’t particularly feel they are better than you.
Then you maybe look a little bit into what the theory behind DEI is and you learn that it’s proponents argue that there is systemic favoritism towards white straight males which is why if you have two equally capable candidates but one is white and the other is a minority, you should choose the minority. As a straight white male you won’t feel (and frankly should not, I’m sorry) that you are responsible for your advantage in society, so what you’ll feel is that now you’re the disadvantage one and that DEI is just racism against white straight males. It isn’t but that doesn’t change how the individual feels.
My personal opinion is that DEI is more of a bandaid than a solution and some of the backlash is warranted. The real solution is for people to have equal opportunity at the lowest level, meaning education. There’s no reason for some schools to be better than others, and less for that difference to arise from the value of the houses in the schools district. Of course Trump and co will not fix it either because they campaigned on destroying the education system because they seemingly want a slave caste or something. But if everyone had equal access to good schools and colleges, I don’t think DEI as it is implemented in most orgs would be needed.
Edit: this was supposed to be a reply to @danc4498@lemmy.world
There’s a fundamental truth that certain white people (i would say over 50%) who don’t believe they are racist - will never hire a non-white person for a position, and they aren’t even consciously aware that this is the case.
There’s just a natural subconscious bias towards people that look and sound like you do. DEI helps to overcome that.
I think “will never hire a non-white person for a position” is a little far but I do think “are unlikely to ever hire a non-white person for a position” (maybe even “highly unlikely”) is fair.
Yes, but I think this a bias reinforced by the same point I made above about education. All schools should be as equally good as possible, or at the very least they should be equally funded and have the same program etc. And then we should aim that schools are as diverse as possible.
It will not completely solve the issues, rural areas by their very nature will probably remain very white and very entrenched. But it would alleviate it a lot.
That brings me to another point, that I think no one has made to rural Americans. If they are being left behind and there’s a housing crisis, why the fuck are their politicians not running campaigns on using government money to fund industry and development in the huge amount of literally empty space there is in this country? We could build the European walkable cities dems dream so much about in the heart of America, and make it affordable too, at least at the beginning. I’ve thought about a lot and I think a plan to develop the economy of the heartland of America would be a good platform for a democratic candidate to run on and it could fit within all the trappings of a The “Golden Age” of America that people want. And it would be a national project, something we sorely need to unite us again.
Because change is hard, and people would rather be told comfortable lies. So the grifters and liars get into office on their platforms of lies, and instead of doing anything useful they just grift.
I commented this earlier but quite a few corps that tend to beat the market in returns have not abandoned DEI initiatives. These are corporations that will not bat an eye to plunge thousands into poverty or worse to save .007 cents on manufacturing costs. This tells you that they believe that DEI has some tangible value on their performance whether it’s through marketing opportunity or because their workforce is actually better.
But I think abandoning DEI for many companies is the right choice, as bad DEI is magnitudes worse than no DEI.
Is it not like anything else? It’s the implementation and execution of the program that makes the difference in whether it’s better or worse… DEI is an incredibly broad term. Many companies try to diversify their workforce because it’s always better for business to have different perspectives… no?
For example, work in a male dominant field, always trying to hire females, they are simply unicorns because they are almost non-existent in the field.
Yes, but most things that are badly implemented in a work place don’t lead to people feeling resented and angry at society.
People feeling resented and angry at society… Are these the same people that tell me I need to pull up my own bootstraps? If so, the two messages are conflicted.
Usually how this goes, there is a few bad implementations that go viral and make everyone else look bad…
Shareholders or board? I think they’re one in the same since they’re mostly held by institutional investment. I’m so curious what their thought processes are.
Fuck Costco and DEI bullshit.
I worked there and the women and minorities got preferential treatment the whole time. Any heavy lifting? Grab one of the guys who are already sweating their asses off outside the 100+ degrees heat. Pay no attention to the fact that the job requires that you be able to lift 50 pounds or however heavy that case of water is during the job interview. Literally had the lot lead look right past two female coworkers in front of him and point to me to help move 100 chairs and tables for some jackasses return.
Someone made a disgusting mess or broke something? Grab the closest male employee to clean it up. Can’t have any of the women getting dirty.
I lost count of how many times a guy was outside clearly struggling with heat exhaustion and he was asking to come back inside but nah. They need him outside. Can’t have any one of the 37 minority women that have been folding clothing since the dawn of time inside the air conditioned box swap places even though they are both technically working the same exact job title.
I was so happy to quit that fuckin job. Easily the worst management I ever worked for and I worked target nightshift in the ghetto as my first job. At least those assholes were pricks to all of us on night crew equally.
Sounds like your boss was the problem, not the DEI hires. But that’s okay, the racist conclusion is the most sensible one to jump to.
Yeah… No. It’s a Costco problem. Our stores general manager is best buddies with all the Costco higher up and most importantly the new CEO. So any attempt to report him or the other managers for the multiple things they were doing wrong would just end up with you getting less and less hours until you eventually quit on your own. I attempted to go over my bosses head and contact the regional manager and guess what. My hours were cut and I got a write up for something that I never did the very next week.
