Costco Chair Tony James: We’re Not Changing Our DEI Policies, We Think of DEI ‘as Part of a Meritocracy’

SORKIN: “Tony, I have a separate question on a completely other topic, which is DEI. Obviously, it’s swept the country in one way and is now sweeping the country in another way, in large part because of President Trump. Costco, obviously, is ending its DEI programs, in large part.”
James: “No.”
SORKIN: “Well I mean, you’re keeping some, but not completely.”
James: “We haven’t changed our DEI.”
SORKIN: “At all?”
James: “No.”
SORKIN: “Oh, then I’m mistaken.”
KERNEN: “So, there were headlines to that effect, I assume.”
James: “No, there were headlines saying, signaling Costco out as the company that’s not —”
KERNEN: “Oh, not Costco. I thought — I was thinking you said Blackstone. Even — or BlackRock. BlackRock.” [crosstalk]
James: “BlackRock certainly retreated, yeah.”
KERNEN: “Yes.”
James: “Costco has gotten a lot of visibility, more than we ever wanted or needed, because it’s standing behind its current policies and procedures. And None of them are illegal. We’ve had —”
SORKIN: “Right.”
James: “— every legal lawyer look at it. And None of them are new. None of them are post-George Floyd. These things go back literally to the company’s founding. We had our first — we took an executive vice president from operations and made him our first diversity officer —”
SORKIN: “Right.”
James: “— over 20 years ago. We think of this as not so much for the social good, although I think it is, we think of this as part of a meritocracy. If we attract a broader talent pool — we have 300,000 employees — we attract a broader talent pool, and we work with them all individually, given their different backgrounds —”
SORKIN: “Right.”
James: “— to be the best professionals they can be, we have a better employee base to choose from. And I think it enhances our ability to be a meritocracy. Costco is the highest torque retailer in the world. We do the biggest volume per building, the biggest volume per square foot on the smallest margins. We have to execute flawlessly every single day. We can’t have anything that’s not based on merit.”
SORKIN: “But so, how scared are you that the fact that you then have this program and you’re willing to come talk about it on TV, that your company’s not going to be targeted by this administration in some way? Isn’t that why every other company in America has tried to get rid of this? Not just the administration, by the way, but also the idea of boycotts and other things that people like Robby Starbuck and others are — are trying to build.”
James: “Look, obviously it’s unwanted attention because we’re not a political company. We just want to do — run a good business. This is core to the business, core to the way we always run the business. So it’s unwanted attention, and it brings unnecessary risk, absolutely. But at the same time, it’s core to our values, and it’s — and we’re not doing anything with quotas, we’re not doing anything with preferences or anything like that. We have nothing that could be remotely deemed illegal under the new interpretation, either the Supreme Court or administration.”