Memo

DATE: April $07,2024$

TO: W$.$ Craig Jelinek, CEO, Costco Wholesale Corporation

FROM: Nishtha Patel

SUBJECT: Strategic Imperative of Sustaining Our Employee$-$Centric Ethos for Long$-$term Prosperity

In reviewing Costco's current HR policies and practices, particularly our commitment to employee welfare as highlighted in our Code of Ethics and reinforced by Jim Sinegal's philosophy, it is evident that these strategies are not only ethically sound but also strategically beneficial for Costco's long$-$term success. This memo advocates for the continued emphasis on these employee$-$centric policies, grounded in the belief that they are crucial for maintaining Costco's competitive edge and profitability.

Costco's approach, deeply rooted in the belief of our co$-$founder, Jim Sinegal, centers around the conviction that employee satisfaction and loyalty are key drivers of long$-$term profitability. This perspective, which prioritizes long$-$term value over short$-$term cost savings, sets us apart in the industry, including from competitors like Walmart. The strategic alignment of our HR practices with our overarching corporate goals underscores the importance of these policies in fostering an engaged, motivated, and loyal workforce, which in turn drives customer satisfaction and financial success.

Given the positive correlation between our HR policies and Costco's performance, I advocate for the continuation and further enhancement of these employee$-$centric strategies. By maintaining our focus on employee welfare, we not only adhere to our ethical standards and corporate mission but also solidify our competitive advantage and position Costco for sustained growth and profitability. In doing so$,$ we continue to honor Jim Sinegal's legacy and the values that have made Costco a leader in the retail industry. Thank you for considering this perspective. I am confident that by upholding our dedication to our employees, Costco will continue to thrive in the competitive retail landscape.