Compensation Philosophy

PCC’s Staffing Goals and Compensation Structure

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 the following disclosures about PCC’s staffing goals, compensation philosophy and compensation structure.

As of January 1, 2022, PCC had 1,670 total employees. When discussing PCC’s compensation structure for its staff, it’s easiest to break the total co-op staff into three distinct compensation groups:

• Nonmanagerial, unionized store staff, which consists of 1,505 people or 90% of total staff.
• Office staff (including office managerial staff), which consists of 115 people or 7% of total staff.
• Managerial staff, which consists of 113 people or 7% of total staff. This group includes both store management — Store Directors, Assistant Store Directors and Deli Managers of each store — and the co-op’s CEO, Leadership Team (Chief Financial and People Officers, Senior Vice President of Merchandising, and Vice Presidents of Operations, Marketing, Social and Environmental Responsibility, Information Technology, Store Development and Legal) and other bonus-eligible office staff in senior supervisory roles.

 

Staffing at PCC

PCC seeks to attract and retain competent, qualified staff in its stores and office who are passionate about PCC’s vision of inspiring and advancing the health and well-being of people, their communities and our planet. Compensation is just one piece of PCC’s attractiveness as a place to work: Our culture; our mission to ensure that good food nourishes the communities we serve while cultivating vibrant, local, organic food systems; the support we provide to our local communities, farmers and product suppliers; and our commitment to the environment make PCC unique and help us attract and retain dedicated, capable staff. More than 95% of PCC’s staff are full-time employees. One indicator of the success PCC has in attracting and retaining competent staff is reflected in the average tenure of PCC staff at all levels. While the average tenure of food service workers nationally has declined over the past two years to 1.9 years, the average tenure of unionized PCC store staff is 4.38 years, more than double the national average. The average tenure of office and managerial staff at PCC increases to 6.92 years.

PCC provides career opportunities for store and office staff to advance to higher-level positions within the co-op. To ensure staff are successful, PCC provides a variety of position-specific and general training programs and offers classes to strengthen other skills needed for advancement. PCC reimburses staff for the cost of English Learner (ELL) courses and provides up to $1,000 per staff member per year for the costs of classes toward two- and four-year college degrees.

PCC’s success in offering career opportunities is reflected in the following statistics: 90% of our store management positions have been filled by promotions of internal candidates and 53% of our office staff started their careers at PCC stores.

 

Compensation Philosophy

PCC’s overall philosophy is to offer total compensation (wages, benefits and incentive pay) that is at or above the median compensation 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 store management and office staff, as outlined below.

Elements of Compensation at PCC

In addition to wages, all the groups identified above receive or can elect to receive certain benefits that are a part of PCC’s overall compensation packages, and each group receives other benefits that are unique to that group (and are outlined in the group-by-group discussions below). The shared benefits include a 15% discount on all PCC purchases made by staff or members of their household — in 2021, the aggregate value of the staff discount was $1.2 million. All staff also receive a free membership to the co-op during the duration of their employment, which entitles them to the same benefits received by other members, such as regular free “surprise and delight” offerings, special discounts through “members-only” deals and a patronage dividend based on total annual purchases. All staff are eligible for the tuition reimbursement program outlined above and have access to free counseling sessions, financial advice and family services through PCC’s Employee Assistance Program.

All full-time staff also are eligible to participate in PCC’s medical, dental and vision (“MDV”) plans’ coverage at premiums ($25 per month) that are heavily subsidized by PCC. Those who enroll in MDV coverage also receive short- and long-term disability coverage and life insurance at no additional cost. The MDV coverage PCC offers is generally broader than equivalent coverage offered to other regional grocery employees through union-sponsored medical plans, and PCC subsidizes a greater portion of the monthly premiums, so the cost to our store staff is lower than the cost of coverage offered to other unionized grocery employees in the region. The approximate value of PCC’s MDV coverage to an individual staff member who enrolls is estimated at $7,500 per year, with the value of coverage for a family estimated at double that amount. All staff may also participate in a subsidized bus pass program for a nominal monthly fee of $14.

Based on recent compensation studies, PCC believes that its overall compensation package for store staff is at or above the median compensation for the grocery industry in the Puget Sound region, but that compensation for the co-op’s office staff is below the median for comparable positions in the Puget Sound region.

The following is a discussion of the unique compensation elements offered to or received by the three staff groups outlined above:

Nonmanagerial Store Staff

Nonmanagerial store staff are members of 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 had 15 total stores and a central kitchen facility in 2021, we pay store staff hourly wage rates generally higher than wages offered by much larger unionized grocers in the region, and generally higher than those of nonunion grocers.

In addition to the wages called for under PCC’s collective bargaining agreements and the benefits provided to all PCC staff as outlined above, in the past year, PCC provided hourly store staff with the following additional elements of compensation:

• • • • $7.9 million in total hazard pay expenses, paid as follows:
        • From February through June 2021, $4.00/hour additional hazard pay for all store staff in all stores
        • From July 2021 to present, $4.00/hour additional hazard pay for store staff in PCC stores in Seattle (currently nine stores), Burien and Edmonds
      • $100 “thank you” gift card bonuses in December 2021
      • Contribution to pension plans administered by UFCW — in 2021, total aggregate contributions were $3.8 million, or about $2,000 per staff member
      • Recognition bonuses (amounts vary based on length of service) for milestone work anniversaries

Office Staff

PCC’s office staff (which includes 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 elements of additional compensation:

• • • • 5% to 8% contributions on behalf of staff to PCC’s 401(k) Retirement Plan (whether or not the staff member contributes) — in 2021, total aggregate contributions were $1.14 million or about $5,822 per staff member
      • $100 “thank you” gift card bonuses in December 2021
      • Recognition bonuses (amounts vary based on length of service) for milestone work anniversaries

Managerial Staff

Managerial staff includes PCC’s CEO and Leadership Team, Store Directors, Assistant Store Directors and Deli Managers, and bonus-eligible office staff with supervisory responsibilities. Managerial staff are salaried and not eligible for overtime compensation. Managerial staff receive the same elements of additional compensation as office staff, and in addition, managerial employees participate in bonus programs to incentivize achievement of PCC’s 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 as part of their overall 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. Through the bonus programs, managers can earn a percentage of their base 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 set by the Board of Trustees.

 

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 performance to such goals. The Board is made up of 11 members currently — eight “outside” trustees (i.e. not employed by PCC), two trustees who are store staff members, and the CEO, who is an ex officio member of the Board. Trustees are recruited to the Board based on the Board’s annual assessment of the skills, backgrounds, diversity 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 and special meetings. 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, all trustees other than the CEO receive a modest 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 modest stipend for their leadership roles, which rotate every few years. The stipends currently paid to trustees are well below the average compensation paid to directors of comparably sized (based on annual gross revenue) public or private businesses, based on survey data compiled in 2020.