Why an activist investor says the battle with Costco’s DEI regime isn’t over
Gerald Storch, CEO of Storch Advisors and former Toys”R”Us and Target executive, responds to the strong November retail report and explains how industry winners are ‘value-based’ players.
Costco shareholders may have rejected a challenge to the company’s diversity, equity and inclusion policies on Friday, but activist investors who run the wholesaler club’s “vigilant” business practices say the fight is far from over.
Ethan Peck, deputy director of the National Center for Public Policy Research’s Free Enterprise Project, said, “Board opposition to a shareholder proposal is a normal and expected part of the shareholder proposal process — almost every shareholder proposal is opposed by every board, regardless of whether it is proposed” (NCPR). Fox News Digital.
NCPR offered Costco executives a bid to investigate the potential risk the company’s business could pose to the company’s bottom line, but the grocery chain’s board of directors unanimously vetoed their efforts.
Costco board member defends DE practices, reprimands companies for layoff policies.
Costco challenged the DEI policies. (Justin Sullivan/Getty Images/Getty Images)
“We owe our success to the more than 300,000 employees who serve our members every day. It’s important that they all feel included and appreciated, and that they pass those values on to our customers,” Costco Chairman Hamilton “Tony” James said at a shareholder meeting Friday. Ninety-eight percent of Costco shareholders opposed the NCPR proposal.
However, Peck said such setbacks are common, predicting that Costco, Walmart, McDonald’s, Harley-Davidson and other companies may have backed away from DEI in President Donald Trump’s historic election victory.
“Boeing opposed our shareholder proposal for an audit of the DEI effort a few months before the DEI was issued. So Costco doubling down on DEI does not make sense as stated in the proxy statement,” Peck said.
Costco shareholders reject anti-DEI measure
President Trump signed an executive order banning DEI from the federal government. (Jim Watson/AFP via Getty Images/Getty Images)
“There’s still a good chance Costco will drop DEI by the end of the year,” he added.
Costco is the most high-profile of a growing wave of companies abandoning their DEI policies, which can include racial or gender bias into hiring practices and workplace diversity training.
Costco board member Jeff Raikes, who previously served as CEO of the Bill & Melinda Gates Foundation, has been a supporter of DEI policies and has written that businesses should “maximize” their DEI initiatives.
What is the cause of the revolt against DE in America?
Activists say Costco could still eliminate DEI by the end of the year. (Marlene Awad/Bloomberg via Getty Images/Getty Images)
“Attacks on DEI aren’t just bad for business — they hurt our economy. A diverse workforce drives innovation, expands markets and fuels growth. Let’s focus on building a future where all talent thrives,” Raikes wrote in November 2024. By X.
President Trump, who has issued executive orders banning DEI in the federal government, has criticized DEI as “discriminatory” and “absolute nonsense.” Davos speech Thursday.
Costco did not immediately respond to a request for comment.