As Sinegal explains, there is a real business advantage in treating employees well. He calls his 120,000 loyal employees "ambassadors." These employees tell the company's story to the more than 45 million shoppers who visit a Costco store, and they often stay with the company (Costco has the lowest employee turnover rate in retailing), Sinegal also took unorthodox view on his own compensation. Sinegal's salary was just $350,000 plus additional bonuses. Costco stock brought his total compensation package to around $3.5 million, which was only a fraction of that earned by other business leaders. Further, Sinegal's CEO employment contract with Costco was the shortest of more than 2,000 such contracts reviewed by the corporate governance organization. The Corporate Library - and the only one that specifically states that he could be "terminated for cause" if he didn't perform. Sinegal's office was a tiny alcove without a door furnished with nothing more fancy than folding chairs.
As unique as all of this is, perhaps the most exceptional element of Sinegal's leadership was (and is) presence within the company. He led from the road, hopping on the corporate jet and visiting up to half a dozen Costco stores a day, including the grand openings of all new store locations. During these visits he interacted with his 120,000 “ambassadors,” met with customers and, quite simply, pitched in where he could help - always wearing his Costco employee name tag that simply read, Jim. When he was at his corporate office he answered his own telephone (if a customer's calling and they have a gripe, don't you think they enjoy the fact that l picked up the phone and talked to them?”)