Walmart continues to beef up perks for its U.S. store managers as the country's largest retailer and private employer offers stock grants that come with pay raises.
The Bentonville, Arkansas-based company with nearly 4,700 namesake stores across the U.S. announced Monday that starting in the company's new fiscal year, which begins Thursday, U.S. stores will receive up to $20,000 in Walmart stock grants each year become.
Walmart — which announced a remodel of more than 1,400 stores last October — is up 15 percent over the past 52 weeks. The stock closed at $164.27 on Friday, up one percent, or $1.43 per share, from Thursday.
The moves follow an announcement by the discount retailer earlier this month that it would raise the base salary of store managers while revamping its bonus plan of up to 200 percent of their regular pay to place greater emphasis on profit among these executives.
The salary increase and bonus change will also take effect on Thursday.
Walmart continues to beef up benefits for its U.S. store managers as the country's largest retailer and private employer seeks to retain its executives and attract new ones in a still-competitive job market
Walmart said it hasn't made any changes to its store manager pay structure in more than a decade.
And although turnover rates among U.S. store managers and other employees have stabilized since 2022, the pressure on employees has increased.
The acceleration of online services like BOPIS for “buy online pickup in stores” since the pandemic has created greater challenges for store managers as they must balance inventory for both store customers and online shoppers.
Walmart said the annual stock grant amount is based on store format. U.S. managers of the sprawling 16,000-square-foot supercenters will receive $20,000 in stock grants.
Those who manage the smaller Neighborhood Market stores — as well as the so-called “Division 1” stores that primarily sell general merchandise — will receive $15,000 in stock grants.
And those who run the Hometown stores, a smaller version of Division 1 stores, will receive $10,000 in stock grants each year, the company said.
Walmart said the stock awards will vest over three years, with one-twelfth of the award amount being acquired each quarter.
The grants will be awarded in April, the traditional time of the company's compensation period.
John Furner, CEO of Walmart's US division, was once a store manager himself
The Bentonville, Arkansas-based company with nearly 4,700 namesake stores in the U.S. said Monday that starting in the company's new fiscal year, which begins Thursday, U.S. stores will receive Walmart stock grants worth up to $20,000 each year -Dollars will be received
“It's fair to say we're asking them to act like owners and think like owners,” John Furner, CEO of Walmart's U.S. division, said in a call to reporters Sunday. “And with this announcement, they will all be owners, and many of them own shares.”
In fact, Furner pointed out that Walmart has long had an employee stock ownership program in which employees can purchase shares directly and the company can then match 15 percent of the amount purchased by employees, up to $1,800 per year.
However, Walmart is not offering a discount on the stock.
The new annual base salary for store managers in the US will be between $90,000 and $170,000. Previously the range was between $65,000 and $170,000.
That means the average base salary for store managers will rise from $117,000 to $128,000, according to Cedric Clark, executive vice president of store operations for Walmart's U.S. division.
About 75 percent of store managers started as hourly workers, said Walmart, who himself was a former store manager.
Neil Saunders, chief executive of research firm GlobalData, noted that Walmart is not only trying to keep its top executives from leaving for rivals like Target and Costco, but is also giving them more incentives to increase profitability at a time when Declining inflation is putting more pressure on retailers to sell more items.
Rising inflation was bad for shoppers, but helped drive up overall company sales.
Furner pointed out that Walmart has long had an employee stock ownership program in which employees can purchase shares directly and the company then matches 15 percent of the purchase price employees purchase, up to $1,800 per year
According to Cedric Clark, executive vice president of store operations at Walmart's U.S. division, the average base salary for store managers will rise from $117,000 to $128,000
“Ultimately, the store manager determines the success or failure of the store,” Saunders said.
“So they need to get better performance out of their existing stores.” “The way to do this is to provide managers with more incentives to be more efficient, pursue more growth and be more focused on their goals, including profitability “Be able to concentrate.”
Walmart announced in January 2023 that U.S. workers would receive wage increases the following month, raising starting wages to $14 to $19 an hour.
Previously, starting wages ranged from $12 to $18 per hour, depending on location.
Walmart has opened more than 100 remodeled stores as part of a $9 billion investment over the past two years to modernize more than 1,400 of its 4,700 locations across the country.
The chain is dedicating more square footage and retail space to online grocery pickup and delivery at its upgraded stores and has opened new “dollar shops” next to the checkout counter.
Walmart Pharmacies have been moved to the front of the remodeled stores, the company said in a statement Monday, with new private demonstration rooms for pharmacist consultations and services.
The retail giant reopened 117 stores in 30 states at a cost of half a billion dollars to boost sales.