PCC is the nation’s largest grocery cooperative, and as such is guided by cooperative principles, which include openness, transparency and accountability. In the spirit of those principles, the Management Development and Compensation Committee (MDCC) of PCC’s Board of Trustees is providing for the following disclosures about PCC’s compensation philosophy and structure.
As of December 31, 2020, PCC had 1,645 total employees. When discussing PCC’s compensation structure for its employees, it’s easiest to break the total staff into three distinct compensation groups:
- Nonmanagerial, unionized store staff, which consists of 1,455 people or 88% of total staff
- Office staff (including office managerial staff), which consists of 160 people or 9.5% of total staff
- Managerial staff, which consists of 96 people or 6% of total staff; this group includes store management — Store Directors, Assistant Store Directors and Deli Managers — and the co-op’s CEO, leadership team and those with supervisory responsibilities in the PCC office
Compensation Philosophy
PCC seeks to attract and retain competent, qualified staff in its stores and office, who are looking for a workplace that supports their passion for good food, our communities and PCC, in addition to finding a well-paying job. Compensation is just one piece of PCC’s attractiveness as a place to work — our culture; the support we provide to our local communities, farmers and product suppliers; the commitment to our environment; and all the other parts that make PCC unique help us attract and retain dedicated, capable staff.
PCC’s overall philosophy is to offer total compensation (wages, benefits and incentive pay) that is competitive within the grocery industry and the Puget Sound region in which our stores operate. This means the Seattle market is an important factor in how PCC establishes wages and benefits for all employees. Compensation philosophy, the components of compensation at PCC and how the philosophy is applied are overseen by the MDCC on behalf of the Board of Trustees. How compensation is set, and the elements of compensation, differ between our unionized store staff and nonunion staff, as outlined below.
PCC believes that its compensation packages for store and office staff, together with its mission-driven business, are industry competitive. This is demonstrated by the fact that PCC’s average turnover rate is consistently lower than national averages — in 2020, for store staff, PCC’s turnover rate was about two-thirds of the 2018 reported national average turnover rate for grocery store employees, while the turnover rate for nonunion PCC employees was about one-quarter of that national average. Another indicator of competitiveness is that in 2020, the average tenure of PCC staff across stores and office is almost 1.5 times longer than the 2020 average tenure of a service industry employee.
As a benefit to our staff, all PCC employees are provided with a free membership in PCC during the duration of their employment, and enjoy the same benefits received by other members, such as free “surprise and delight” offerings and special discounts through “members-only” deals. Staff also receive a 15% discount on all PCC purchases made by the employee or members of their household.
NonManagerial Store Staff
Nonmanagerial store staff are members of the United Food and Commercial Workers Union, Local 21 and are compensated in accordance with collective bargaining agreements negotiated between PCC and UFCW and ratified by our unionized staff. In general, while PCC only has 15 total stores, we pay store staff hourly wage rates comparable to or slightly higher in some categories than wages offered by much larger unionized grocers in the region, and PCC’s wage rates are generally higher than nonunion grocers.
In addition to the wages called for under PCC’s collective bargaining agreements, in the past year, PCC has provided all hourly store staff with the following additional elements of compensation:
- $2.00/hour additional hazard pay for four months, in appreciation for staff efforts in the early months of the COVID-19 pandemic to institute new safety procedures
- $4.00/hour additional hazard pay commencing February 3, 2021
- $300 “thank you” gift card bonuses in December 2020
- Free membership in the co-op
- 15% discount for staff and their households on all purchases from PCC
- Contribution to pension plans through UFCW
- Heavily subsidized premiums for comprehensive medical, dental and vision coverage
- Recognition bonuses for milestone work anniversaries
Office Staff
PCC’s office staff — which includes managerial and nonmanagerial staff in finance and accounting, marketing, merchandising, sustainability, information technology, human resources, and store development departments — are primarily salaried employees. In addition to wages, in the past year PCC provided all office staff with the following additional compensation:
- Free membership in the co-op
- 15% discount for staff and their households on all purchases from PCC
- 5-8% matching contributions for participation in PCC’s 401(k) Retirement Plan
- Heavily subsidized premiums for comprehensive medical, dental and vision coverage
- $300 “thank you” gift card bonuses in December 2020 to all non-managerial staff
- Recognition bonuses for milestone work anniversaries
Managerial Staff
Managerial staff includes PCC’s CEO, the Vice Presidents who make up PCC’s Leadership Team, Store Directors, Assistant Store Directors and Deli Managers, and office staff with supervisory responsibilities. All managerial staff receive a set salary and are not eligible for additional compensation for overtime work. In addition to the salaries and other compensation elements outlined above for office staff, managerial employees participate in bonus programs to encourage achievement of PCC’s goals. Through the bonus programs, managers can earn compensation that directly relates to their performance in helping PCC achieve annual financial and other goals within the context of the co-op’s values. Bonuses under these plans are paid only if PCC achieves or exceeds its annual financial performance targets, which are set by the Board of Trustees. The bonus potential is a set percentage of the manager’s annual salary and based on the achievement of financial and other goals.
PCC competes with other retailers, including larger national grocers, for talented managerial staff. Larger competitors routinely offer stock, stock options or long-term, equity-based compensation packages as part of their compensation packages, which can represent significant additional compensation value to recruited employees. PCC, as a cooperative, does not have the ability to offer equity-based compensation, and as a result, the managerial bonus programs were created to provide a competitive compensation tool for PCC to use in recruiting managerial talent.
Board of Trustees Compensation
PCC’s Board of Trustees oversees the setting of strategic financial, social and environmental goals for the co-op and monitors the organization’s performance to such goals. The Board currently is made up of 10 members — nine “outside” trustees (i.e. not employed by PCC) and the CEO, who is an ex officio member of the Board. Trustees are recruited to the Board based on annual evaluations of skills, backgrounds and experience needed to guide PCC’s complex and growing organization. Trustees participate in a minimum of four Board meetings and an additional four or more committee meetings each year, plus time-to-time participation in task forces. Trustees also provide advice and guidance to management throughout the year and participate in events with members and staff.
In recognition of the considerable duties, time and effort trustees commit to PCC, outside trustees receive a stipend for their service to the co-op. The chairs of the Board and each of the Board’s standing committees (other than the Executive Committee) receive an additional stipend for their leadership roles, which rotate every few years. Trustees who are employees of the co-op (“inside” trustees) receive no additional compensation for their service on the Board. The stipends currently paid to outside trustees are below the average compensation paid to directors of comparably sized businesses, based on survey data compiled in early 2020.