WSJ.com - Costco's Dilemma: Be Kind To Its Workers, or Wall Street?: "'From the perspective of investors, Costco's benefits are overly generous,' says Bill Dreher, retailing analyst with Deutsche Bank Securities Inc. 'Public companies need to care for shareholders first. Costco runs its business like it is a private company.'
Costco appears to pay a penalty for its largesse to workers. The company's shares trade at about 20 times projected per-share earnings for 2004, compared with about 24 for Wal-Mart. Mr. Dreher says the unusually high wages and benefits contribute to investor concerns that profit margins at Costco aren't as high as they should be."