Wages are rising slower than company profits; “Grabflation” pushing prices far higher

Wages at 49 companies listed on the Amsterdam stock exchanges rose much slower than their profits did between 2019 and 2022, trade union FNV reported in the study Rising prices & high profits. The companies’ profits also increased more than their turnover, indicating “grabflation” - companies increasing prices more than inflation justifies, the union said.

FNV investigated the 2019 and 2022 public annual figures of 40 companies listed on the AEX and AMX, including Delhaize, Randstad, ING, KPN, and Unilever. In that period, shareholder payouts increased 59 percent, and remuneration to the companies’ board members rose 20 percent. Personnel costs lagged well behind with an increase of 12 percent.

“The profits of these companies did not reach the staff, while they are affected by the high inflation. That is unacceptable,” said Petra Bolster of the FNV executive board. “By paying out money to shareholders and not investing this money in their company, these entrepreneurs endanger the company's future and therefore the jobs of their employees.” According to Bolster, the high shareholder payouts indicate that these companies can bear paying higher wages and more taxes.

FNV also found that the companies' profits (+36%) rose faster than their turnover (+21%) between 2019 and 2022. Profit margins increased from 7.5 cents per euro of turnover in 2019 to 8.5 cents per euro of turnover in 2022. “Companies are able to increase their margins on top of rising costs. This increasingly resembles ‘grabflation:’ companies that use inflation to make more profit,” Bolster said.

The union called it “striking” that all the food-related companies they studied seemed to be doing very well. “As groceries become more expensive for families, these companies seem to be benefiting.”