Capitalism has made America great: Ex-J.C. Penney CEO Questrom
Attacks on capitalism by the political left continue to heat up as Massachusetts Sen. Elizabeth Warren introduces a bill aimed at holding companies accountable to their employees and communities.
Allen Questrom, former J.C. Penney chairman and CEO, told FOX Business that the best companies’ primary concerns are their customers, followed by their employees and then shareholders.
“I believe that if you take care of your customers and give them what they want and service them properly, you will get the rewards, and then you can afford to pay your sales associates,” Questrom said during an interview on “Making Money with Charles Payne” on Wednesday.
In an op-ed for The Wall Street Journal, the Democratic senator said the nation's largest companies have been operating in a way that makes them slaves to shareholders.
“That shift has had a tremendous effect on the economy,” she wrote. “In the early 1980s, large American companies sent less than half their earnings to shareholders, spending the rest on their employees and other priorities.”
“But between 2007 and 2016, large American companies dedicated 93% of their earnings to shareholders,” Warren added.
Questrom said a shareholder’s investment is based on how well businesses value its customers, and that success then garners a higher return on investments for the company’s shareholders.
“If you don’t take care of your customers long-term, you are not going to be around to share any of that wealth with the shareholder,” he said.
Warren points out that company executives’ financial incentives to focus on shareholder returns has helped elevate CEO salaries 361 times more than what was seen in 1980.
Questrom said all CEOs have a responsibility to how much their employees are making when considering their own wages.
“I believe that the CEO’s wages, in the last ten, fifteen years, [have] gotten quite high, but it was really pressed by many of the investors wanting to see returns on investment,” he said.
The ex-J.C. Penney CEO attributes the success of the U.S. economy to capitalism and American ingenutiy. "We are a capitalistic society here. That's what has built this country to be the greatest it is," Questrom said.