A. Schulman

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Fortune 500

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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A. Schulman Company Profile, Stock Price, News, Rankings

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A. Schulman | Fortune

A. Schulman Company Profile, Stock Price, News, Rankings | Fortune

 ELLEN McGIRT: I think that the human moral element of this is going to require a certain kind of courage that some executives who just simply aren't fluent in the language of justice or purpose or stakeholder capitalism need to generate in order to have the tough conversations, including learning out loud. What's your best advice for those executives who are earlier on the path and you and Hamdi? DANIEL SCHULMAN: Well, I try really hard not to give anybody advice because it's so hard not being in their shoes, but I can say what's worked for us. And what's worked for us is having a set of values that we live up to. And that is what takes real courage, I think. Because values that are just up on a wall and you don't act upon them are just propaganda. And it's worse to actually have values that you don't live up to than no values at all because you're-- HAMDI ULUKAYA: I'm going to steal [INAUDIBLE] from [INAUDIBLE]. DANIEL SCHULMAN: That's I mean it's so true. And by the way, living to those takes courage. Because we live in a culturally charged environment where when we stand up for something, people always think you're taking a political stance. And I always say we're not taking a political stance. We're standing up for our values. And even if that results in death threats, which frequently happens to me because what we-- the stance we take are sometimes controversial, but we're consistent on them. Like we will always take down Nazi sites or KKK sites or sites that promote hatred or violence. And sometimes people are upset about that, but I think that is consistent with our values of inclusion. And that courage to do that, your employees see it, your customers see it, and people want to be a part of a company that stands for something. ELLEN McGIRT: You broke some news on fortune.com today with my wonderful colleague Beth Kowitt. Thank you for that. Specifically I'm thinking about stakeholders and your employees. Can you tell us a little bit about your news and why it's important now? HAMDI ULUKAYA: I feel that we still have a long way to go. This is just the beginning. We announced before the stock options for every employees, including factory workers and tell them to lead help for the children. I always keep saying these are not gifts, these are our-- these are our responsibilities. And this should the normal. This should be the normal business that we shouldn't even be talking about these things. But I'm hoping that this pandemic made us all tick. And I see the signs. And, of course, this gathering that you put together and putting this kind of topics in the top of everybody's mind. And we need to be aligned. We need to be helping each other. We need to inspire each other. And we need to make massive convincing out there in the world of business and say, OK, we might not have to figure this out all at once right from the beginning, but let's start this way instead of this way that we've been on for a long, long time that hasn't been helping society and community and humanity all together. ELLEN McGIRT: Because I know that journey really resonated with you particularly around employee pay and your net disposable income efforts. Can you talk us through that journey, please? DANIEL SCHULMAN: Sure. Well, first of all, I want to, again, thank you for having me and Hamdi. It's so great to be on with you as well. You've inspired me for so long, and I've learned so much from watching you in action. To your point, Ellen, I couldn't agree more with Hamdi in terms of employees being the single most important asset that a company has. When I think about what creates competitive advantage, it's always the strength of your employees, their skills, their passion for the business. And I think any company that hopes to move from being a good company to maybe someday being a great company has as its foundation talented, financially secure, financially healthy employees. And one of the things that I was always proud of at PayPal is that we paid at or above market in every single location where we employed 30,000 people at PayPal. And I always thought because we did that that our employees would be financially healthy because I believe that if you rely on the market, then your employees will be OK. And I put out a survey to find out how our employees felt in terms of their financial health. And what I found is that 2/3 of our employees, 2/3 of our entry-level employees and all of our call center employees struggled to make ends meet at the end of the month, which was shocking to me because I came to realize that capitalism in its current form isn't working for a large segment of the population. And so then I really decided to measure just what it meant to be financially healthy. And we came up with this metric called net disposable income, which is after an employee pays their taxes and all of their essential living expenses, how much money do they have left over for the rest of life. And what I found out, to my surprise, is that our employees, entry-level employees, call center employees only had between 4% and 6% net disposable income. And the team and I decided that the minimum NDI that we could accept for somebody to be financially healthy was 20%. And so we lowered the cost of health benefits by 60%. We raised salaries. We gave every single person in the company just like Hamdi did, we gave them actual stock in the company, and we wrapped all that into a financial education program to show them how to save, how to think about their long term financial health. And today the minimum somebody has in the company is 16% NDI, and by the end of next year we'll be at 20%. And what I saw from that is employee passion, engagement, attrition go way down, absenteeism go way down. And I feel like this idea of profit and purpose working hand in hand together is exactly what makes companies successful. 

“People want to be a part of a company that stands for something,” says PayPal CEO Dan Schulman.

Chobani and PayPal are rethinking capitalism

Leadership

“People want to be a part of a company that stands for something,” says PayPal CEO Dan Schulman. 

I was hoping you could kind of set the scene a little bit in terms of we have this unprecedented situation. The economy or much of the economy at least has kind of ground to a standstill. And there are a lot of Americans who are out work. Obviously our lives have changed so much. And one thing that we've been really intrigued by is how that's affecting the financial system. How Americans are interacting with their finances .>> The impacts of the virus are profound. People are sheltering at home. They're not going out. And that's changing the way that all of us work and the way all of us live, and so you're seeing that with a increased use Of all things digital, I'm on the board of Verizon. We're seeing a tremendous increase in the use of wireless services and the use of the Internet in general. And along with that, people are using digital payments in ways that we really never imagined before. Not only is there a tremendous increase The use of digital payments, but the way people are using them are also changing. Yeah. You mentioned some of the increases you're seeing and ways that people are using your services that you haven't seen before. Can you give some examples of that what you're seeing? I mean over the last couple of weeks, the number of new customers that have signed on to PayPal or Venmo. Has increased dramatically. I mean, in some cases doubling. And, you know, in general we're seeing different usage patterns emerge. People are spending a lot more online in the weekend because they are So busy during the week either doing home schooling, on conference calls on video calls, that the weekend allows them to sort of restock from home and so we're seeing a tremendous increase In shopping in verticals like groceries, electronics, home, and gardening. Gaming is exploding. What really intrigues me, and what we're seeing, in ways that we've never have seen before, is this increase of spontaneous giving To- who need the money. Sometimes from friends and sometimes from strangers. Over these peer- to- peer networks like VIMEO or PayPal to help people in need. And these are all kinds of things that just people paying it forward. And we're now doing a hashtag called Then move it forward where, if we see somebody doing a kind of random active kindness, we're giving them $ 20 into their Venmo account and say, and we're saying to them, do even more. Yeah, is it things like people supporting healthcare workers and in funding the equipment or what are some of the examples that you've seen that have moved you the most? Yeah, well, I think it's a range that moves from charities that really need help and these are charities that are doing either community based, food programs for those who need food delivered. You have a lot of charities looking at the distribution of health equipment. Whether it be mask, gloves, sanitizers, that kinda thing. You have funding for vaccines and preventative types of things for the for the virus, but what I'm seeing are people really stepping up to the everyday heroes that are out there right now. Honestly, those are cashiers at grocery stores or pharmacies, first responders, nurses, doctors. Many nurses and doctors can't go back to their homes, or are reluctant to go to their homes, because they're fearful that they might spread the virus to family members. And so they need incremental money to stay at places, whether they be hotels that are opening up, Airbnb that are opening up to them, so that they have actually extra expenses, and cash to be able to do the things that they do day in and day out. That are so important to our society moving forward as it is and this time of need for everybody. When you think back to where things stood in terms of the technology and FinTech, even from the last crisis, so say the last 10 years Are these Technologies in a different place that are set up to help people in a different way than we even was available the last down cycle we had the last financial crisis. Well, I think you've seen an explosion in Mobile over those past 10 years, certainly in The penetration of smart phones. When you have a smart phone, you have all the power of a bank branch in the palm of your hands. And at the same time, you've had an explosion in the capabilities of digital payments. And I think as you think about it as we're sheltering at home and you have people who are unbanked, almost 25 %, As Americans are underserved right now. They may not have a bank account traditionally would have had to have gone to a cash checking location, and now they're sheltering at home. But they can do that right from their mobile phone, they can take a picture of a check deposited onto a platform. Like a PayPal, or a Venmo, or deposit it into a bank account. And so the use of technology now is enabling I think these previously underserved populations to become part of this digital economy. It sounds like you and many other companies right now are talking to the government about ways that you might be able to help in distributing this stimulus, whether it's. In the stimulus checks as well as the small business loans and the paycheck Protection Program. Are you set up to help it and what can you do there? Making sure that those checks get those populations that most need them. Is something that we are working with the government on. We have a lot of information, We have a lot of customers who don't necessarily have bank accounts, but do have accounts with PayPal or Venmo. We need to be sure that there's strong authentication. Which we pride ourselves on to make sure that those checks are going to the right people. Just in terms of the you know, your conversations and thinking about what's possible and how you could help kind of speed access to this the stimulus for people. How new would that be for you in terms of working in that capacity with the government or how unprecedented Would it be to use new technology or the technology that's available to make these electronic payments and get this money out there? We work with different parts of government, whether they be state governments, municipalities, governments around the world to. Do the everyday civic things that people do, whether it be pay taxes, get tax refunds, pay parking tickets, utilities, that kind of thing. So that that has been happening, but doing something at this scale with the federal government. Would be something unprecedented. It's not easy to go do for the government. How we do it and the best way to get that done as rapidly as possible Is still evolving towards what I would consider to be a long term solution. This is clearly not a money making effort on the behalf paper. This is a civic and the right thing to do civic effort and the right thing to do. For all digital platforms, we do have a portion of our customer base who has gotten their tax refunds directly onto our platform and those that have done that. Would be able to also receive those disbursement checks directly as well. Most of these things are not brand new, they're just not at the scale that is being contemplated right now. We're hearing a lot of bad news and a lot of negative trends over the past few weeks, but could, somehow, those trends that you're seeing in this Maybe have a positive effect of potentially decreasing the amount of the underbanked or increasing the amount of access to financial services for different populations. I mean, is there any positive effect that you see coming out of this? I do think as we're seeing a new era of digital payments, that we're not going to go backwards to that, to what was we're not going to be using cash nearly as much. I think we're all gonna be aware of hygiene, going forward. I think the use of QR codes in store is going to continue to increase as we're seeing it increase right now. And I think the more we can move into a digital economy The more inclusive that can be. And we need to be sure that happens because I do think digital forms of payments can be much more time efficient. You don't have to wait in line at a cash checking location. You don't have to wait in line to pay your bills and number two is it can be done. Much less expensively. But sometimes it can cost 2 % to 5 % to cash a check. And all that is, is changing a form of currency from one form to another. And then you've got to pay another fee to pay a bill. If you can do it electronically, I think we can save a tremendous amount of money. For those populations that most need that savings. So, I'm hopeful that this is a tipping point in the way people think about managing and moving money from. Physical into digital because they think that can really drive a tremendous number of benefits to those who most needed and to our economy and society .>> I know you've talked a lot about that. What you're trying to do is not, your priority is not benefiting your PayPal bottom line, right now you're thinking beyond that and how you can help people. But it also sounds like you're seeing a lot of positive business trends for PayPal. And meanwhile, you're hearing a lot of bad stories about business and a lot of negative and stories about declines. Is it possible? Do you think that PayPal will buck that trend and potentially. You know, have a very positive, whether it's you know, the first quarter of this year or just that these months while we're still dealing with these restrictions in this pandemic. I think PayPal has the opportunity, when we Come out of the pandemic, to be a much stronger company than it was coming into it because of all of these trends, but like every company, we're impacted by it, our customers are impacted by it. We support a number of travel companies and different ticketing companies and event companies and And so, we're not immune from some of the trends that are happening. But we're very fortunate in that we have a number of counter trends that are happening the explosion of digital payments, explosion of net new actives. We're doing a number of things right now. To be helpful in this time of crisis. Because I feel like if you put your employees first, we also said we're not gonna lay off any employees because of COVID- 19. But I think if you put your employees first and you put your customers first, then nobody forgets that. And you come out of this in a really strong position Because, you know people are always there and good times for you. It's when they're there and more difficult times that people remember. You know, I meet every single day with my team on video calls like this. And one of the things I'm telling them is like, this is our time is our time to step up to help. We're really fortunate that we're in the position to be able to go and do that. And we need to do everything we can, because people clearly want and need our products and services. [ BLANK_AUDIO ]

How PayPal is responding to the coronavirus crisis

Finance

CEO Dan Schulman spoke with Fortune's Jen Wieczner.

CEO Dan Schulman has a conversation with Fortune’s Jen Wieczner.

Dan Schulman has a conversation with Fortune.

Watch: PayPal CEO on coronavirus response

 What is tackling inequality mean to you? And how does all of this fit into a broader framework of a business imperative? It starts a little bit with our obligation as businesses now. I don't think that businesses can shun or avoid the issues of our day. I think we have a moral responsibility to step up, to be a part of this solution, to work with governments, to work with NGOs, to work with academia, to figure out, how can we come together to address these issues? And I think the very best businesses have a mission that inspires their workers, that have values that support them. And our mission at PayPal simply put is to try to democratize financial services, which is a fancy way of saying that we think that managing and moving money should be a right for all citizens, not just a privilege for the affluent. And that's a very inclusive vision. And as such, our primary value at PayPal is diversity and inclusion. There's a great saying that Justin Trudeau's dad actually came up with, which was that diversity is a fact but inclusion is a choice. And I love that saying. I think it's really a beautiful saying. And for us, I think for all of us, that means that we need to step up as leaders and assure that we have inclusive workforces for two reasons. One, the more diverse your workforce, the more successful you will be as a company. There are facts over and over and over that prove that. Diversity of thought, diversity of opinion is incredibly important for a business. And two, if we're going to serve a global community-- and for us it's all citizens-- our workforce should mirror that population, that customer segment that we're trying to serve. And so we take this very, very seriously. We stand up for our values. We act on our values, because if values are just something you have up on a wall, they're not really values. They're propaganda. And if you act on them, then they really are values. 

Insights: PayPal CEO - We Have a Moral Responsibility to Tackle Inequality

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PayPal CEO: Moral Responsibility to Tackle Inequality

CEO Dan Schulman explains why at Fortune’s Global Forum. (October 2018)

What is tackling inequality on dhe it mean to you? And how does all of this fits into a broader framework of a business imperative? It starts a little bit with our obligation as businesses. Now, I don't think that businesses can er, shun or avoid, uh, the issues of our day. I think we have a moral responsibility. Thio Step up to be a part of the solution toe work with governments, toe work with NGOs, toe work with academia to figure out How can we come together to address these issues? And I think the very best businesses I have a mission that inspires their workers that have values that support them. Um, and you know, our mission at PayPal. Simply put it is to try to democratize financial service is, which is a fancy way of saying that we think that managing and moving money should be right for all citizens, not just the privileged for the affluent. And that's a very inclusive vision. And, as such are primary value at PayPal. Is diversity inclusion? There's a great thing, uh, that Justin Trudeau dad actually came up with which waas that diversity is a fact. But inclusion is a choice. And I love that saying, I think it's really a beautiful saying and um, for us, I think for all of us, that means we need to step up as leaders and assure that we have inclusive workforces for two reasons. One, the more diverse your workforce, the more successful you will be a za company. There are facts over and over and over that prove that diversity of thought diversity of opinion is incredibly important for business. And two, if we're gonna serve a global community, and for us, it's all citizens. Our workforce should mirror that population, that customer segment that we're trying to serve. And so we take this very, very seriously. We stand up for our values. We act on our values because it values or just something you have up on a wall. They're not really values their propaganda. And if you act on them than they really are, values

Dan you've had so much experience leading startup companies, big established companies, you were the CEO of Priceline Yeah Now PayPal, a top executive at AT & T for many years so what would you say is the key thing that makes a successful leader I think the most important thing is authenticity. I mean you have to be true to yourself. I mean Look at the way I dress and everything else [ LAUGH ] you just need to be authentic. I know through out your career, you've worked with many successful enterprenuers, Richard Branson of the Virgin group is one of them, what is it about him in particular that influenced you into the leadership style? Richard was really the first person that spend a lot of time thinking about what brands stand for and being Consumer champion so he's the one who taught me that you always need to challenge your business model to do the right thing for customers. He basically said there's no way that a company can be an enduring great company if they're not fundamentally A customer champion. So I really adopted that into my whole philosophy and way of thinking. And the second thing he said is that companies need to be a force for good. The other thing that just what every business leader I talked to talks about these days of the importance of creating a culture of innovation. What PayPal has had, a very rich History of that thanks to very talented entrepreneurs like Peter Teal. Like Elon Musk. I mean to what extent do think that that history motivates PayPal employees today to experiment and take risks? Is is part of your DNA ?>> I think very much it is part of our DNA but what we've tried to instil on top of that fundamental DNA of innovation Is not just innovation for innovation sake, but really innovation to self pain points of customers. And so we spend a ton of time talking with customers before we start to develop anything. For us, it's talking to customers and then innovating Using technology to create solutions that maybe nobody else can do. This whole start up culture has a sense of urgency and creativity. Now that PayPal is a $ 10 billion company, how do you keep that spirit alive and how do you encourage This kind of innovations you're talking about. The most important competitive advantage any company has is its employees. That's number one. You want to be at a place where you feel you're making a real difference. And that's whhy that mission and that vision and that value set you have is so important. Because if it's right And it's authentic. And people see you really act on it, you'll attract the best and brightest for your company. And if that happens, you will innovate and do very well. Well talking about the best and the brightest, we're coming up on graduation season. There are a lot of kids that are graduating. NBAs that are gonna just be launching their careers. Is there one Piece of advice that you would give to these young graduates before they get started? What I say to most people is don't obsess over what your next thing will be, because you know why? It's gonna change all the time. And my recommendation Is take that first step. Whatever that step is. And then take that second step. And by the way along the journey what's gonna happen is you're gonna find things you never thought about will happen to you. Some of them will be good other's may not be so good. But if you can learn from each of them and adapt to them and keep moving. That is why that's my best bet, never stand still would be my advice to them. Since we're speaking about leadership, as you reflect back on your life, both the professional side of it and the personal side of it, was there any one piece of leadership advice that you got that really made a difference for you? Yeah so the person that's made The most difference in my life was my dad. He really was my hero growing up. He was a wise soul, a gentle person, and he always said to me, he said, Son You are what you do not what you say. You are what you do. That's what defines you as a person. And so I've always tried to live my life by being defined by what I do and then letting that inform what I say. As opposed to the other way around. [ BLANK AUDIO ].

PayPal CEO: A Company's Most Valuable Resource is its Employees

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