John Mackey - He no longer works for money
From a letter sent November 2 by Whole Foods Markets CEO John Mackey to his employees.
To all team members,
I want to announce a couple of significant changes regarding compensation at Whole Foods Market.
First, as you know, we have a salary-cap policy, which limits the total cash compensation that can be paid to any team member. The board of directors has voted to raise the salary cap from 14 times the average pay to 19 times the average pay, effective immediately…. We are raising the salary cap for one reason only–to make the compensation to our executives more competitive in the marketplace…. Everyone on the Whole Foods leadership team (except for me) has been approached multiple times by “headhunters” with job offers to leave Whole Foods and go to work for our competitors. Raising the salary cap has become necessary to help ensure the retention of our key leadership…. This increase to 19 times the average pay remains far, far below what the typical Fortune 500 company pays its executives…. The average CEO received 431 times as much as their average employee received in 2004, while Whole Foods’ CEO (me) received only 14 times the average employee pays in cash compensation.
Most large companies also pay their executives large amounts of stock options in addition to large salaries and cash bonuses. The average corporation in the United States distributes 75% of their total stock options to only 5 top executives…. At Whole Foods, the exact opposite is true: The top 16 executives have received 7% of all the options granted while the other 93% of the options have been distributed throughout the entire company.
The second part of today’s announcement has to do with my own compensation…. The tremendous success of Whole Foods Market has provided me with far more money than I ever dreamed I’d have and far more than is necessary for either my financial security or personal happiness…. I am now 53 years old and I have reached a place in my life where I no longer want to work for money, but simply for the joy of the work itself and to better answer the call to service that I feel so clearly in my own heart. Beginning on January 1, 2007, my salary will be reduced to $1, and I will no longer take any other cash compensation…. The intention of the board of directors is for Whole Foods Market to donate all of the future stock options I would be eligible to receive to our two company foundations.
One other important item to communicate to you is, in light of my decision to forego any future [pay], our board of directors has decided that Whole Foods Market will contribute $100,000 annually to a new Global Team Member Emergency Fund. This money will be distributed to team members throughout the company based on need…. The first $100,000 will be deposited on January 1, 2007, and requests will be considered after that date.
With much love,