Fired Darden Execs Get $68 Million For Failing, Workers Get $2.13 An Hour

By Sarah Anderson — Olive Garden’s parent company Darden Restaurant Group, the nation’s largest full-service restaurant chain, is sending three top executives off with $68 million while it pays workers $2.13 per hour.

Imagine the Three Stooges as waiters. Curly’s pouring hot soup in laps, Moe’s sneezing in the spaghetti, and Larry’s lighting a well-coiffed woman’s hair on fire with the bananas flambé.When their boss finally gives them the boot, the customers cheer. And if the wiseguys were to ask for big goodbye bonuses, everyone in the joint would crack up.

compensation valued at an estimated $68 million, according to a report I authored for the Institute for Policy Studies. On top of cash, stock, and generous retirement funds, they reaped various fringe benefits like financial counseling and discounts on their company cars.

Surely the Three Stooges wouldn’t have deserved a pile of loot for their abominable service. So why would Darden richly reward Otis and the other two ousted executives for a job badly done?

For the vast majority of servers working in its full-service chain restaurants, gold-plated perks are unimaginable. Darden pays at least 20% of its hourly workforce no more than the federal minimum wage for tipped workers. That sub-minimum wage has been stuck at $2.13 for more than 20 years.

Employers are supposed to make up the difference if their employees’ total pay (tips plus wages) doesn’t add up to at least the federal minimum wage of $7.25 per hour. Because of lack of enforcement, however, noncompliance runs rampant.

Nationwide, 12.8% of tipped restaurant workers can’t make ends meet, compared to the 6.5% poverty rate for non-tipped workers, according to the Economic Policy Institute.

Darden does offer most employees a 401(k) retirement plan. But 87% of those eligible (including management and administrative staff) choose not to participate. With such small paychecks, it’s nearly impossible to put money aside for retirement.

Currently, Darden workers face even greater insecurity. An activist hedge fund, Starboard Value, is battling over control of the company and pushing for deep cost-cutting, including on labor.

Squeezing workers to the bone is no recipe for success. But paying a living wage would be.

According to research by the Restaurant Opportunities Centers United, states that have raised their minimum wage for tipped workers above the federal floor have had above-average employment growth and increases in per capita restaurant sales.

As the country’s largest full-service restaurant corporation, Darden plays a major role in setting national industry standards. And now, in the midst of a bitter shareholder fight, it has a decision to make. Will it tighten the vice on workers or will it change course and follow a high road approach to prosperity?