Zappo's deal is sweet redemption for low-paid shoe grunts

That giant slapping sound you're hearing right now is the din of high-fives echoing through the corridors of Zappos headquarters in Henderson, Nevada as Tony Hsieh's low-paid shoe grunts taste sweet redemption. Hsieh is known as a marquee CEO and master Twitterer but also as a man who believes company culture is more important than size of paycheck. According to this May 2009 Inc. Magazine profile, Hsieh pays entry level customer service reps a $11 per hour and warehouse workers only $8.25 per hour -- essentially a subsistence level existence.

With Amazon (AMZN) reportedly offering $40 million cash and stock to Zappo's employees, Hsieh's troops are finally looking like real money. So how much does that tally up to per Zappista?

Let's say that $10 million of those rewards go to top management. That's a fairly conservative estimate, as top management likely already had options in Zappos but just to make sure we're in the ball park we'll assume $30 million. Divide that by 1,500 and the average payoff to a Zappista is a cool $20,000 -- or, in many cases, roughly one full year salary. If you assume that the entire $40 million goes to those below management --not a terrible assumption, as most of management probably did have some nice options tallied up-- then the grunts would get $26,666 on average.

Considering that the Las Vegas metro area is among the hardest hit in the country by the foreclosure crisis and the state's gambling economy is in a tail spin due to the dearth of Americans with pocket money and corporate junkets, the folks at Zappos could be excused for feeling a little smug. It seems that sticking to a shoe leather existence for years (Zappos is legendary for employee retention) even amidst the previously booming Nevada economy was exactly the right strategy.

Read Full Story

Markets

DJIA 24,811.76 -75.05 -0.30%
NASDAQ 7,424.43 -1.53 -0.02%
NIKKEI 225 22,450.79 13.78 0.06%
HANG SENG 30,588.04 -172.37 -0.56%
DAX 12,975.43 120.34 0.94%
USD (per EUR) 1.17 0.00 0.01%
USD (per CHF) 0.99 0.00 0.14%
JPY (per USD) 109.52 0.21 0.19%
GBP (per USD) 1.34 0.00 -0.11%