Walmart Enhances Perks for U.S. Store Managers

NEW YORK — In an effort to retain its leaders and attract new talent in a competitive job market, Walmart, the largest retailer and private employer in the U.S., is offering increased perks to its store managers.

Stock Grants for Store Managers

Starting from Thursday, at the beginning of the company's new fiscal year, U.S. store managers at Walmart will receive up to $20,000 in stock grants annually. This move comes as Walmart shares have seen a 16% rise in the past year, closing at $165.04 on Monday.

Pay Raise and Bonus Change

Earlier this month, Walmart announced that it would raise the starting base pay for store managers and redesign its bonus plan to focus more on profits for these leaders. These changes will also take effect from Thursday. It's worth noting that Walmart has not made any alterations to store managers' pay structure for over a decade.

Challenges Faced by Store Managers

While turnover rates for U.S. store managers and other workers have stabilized since 2022, employees are facing increased pressure. The rapid growth of online services like "buy online pickup in stores" (BOPIS) amidst the pandemic has added challenges for store leaders as they manage inventory for both in-store and online customers.

Stock Grant Amounts

The amount of the annual stock grant received by store managers is based on the format of the store they lead. Supercenter store managers, overseeing sprawling stores of about 180,000 square feet, will be granted $20,000 in stock. Managers of smaller Neighborhood Market stores and division 1 stores, which predominantly sell general merchandise, will receive $15,000. Hometown store managers, representing smaller versions of division 1 stores, will receive $10,000 in stock grants every year.

Vesting and Distribution

The stock grants will vest over a three-year period, with one-twelfth of the grant total becoming fully owned by the managers every quarter. The grants will be distributed in April, which aligns with the company's traditional compensation period.

Walmart Offers Stock Ownership to Employees

Walmart's CEO, John Furner, emphasized the importance of employee ownership during a recent conference call. He stated that the company is encouraging its employees to act and think like owners. To facilitate this, Walmart has implemented an employee stock program, allowing them to purchase stock directly. The company also matches 15% of the employees' purchase, up to $1,800 annually. Although there isn't a stock discount available, many employees already own stock.

In an effort to retain top talent, Walmart has revised the starting annual base salary for U.S. store managers. The new range will be $90,000 to $170,000, compared to the previous range of $65,000 to $170,000. Cedric Clark, the executive vice president of store operations at Walmart's U.S. division, further clarified that this change will result in an average base pay increase for store leaders. Previously at $117,000, it will now be $128,000.

Around 75% of Walmart's store management team began their careers as hourly workers within the company.

Neil Saunders, a managing director at research firm GlobalData, suggests that this move from Walmart not only serves as a means of retaining their top leaders but also offers them additional incentives to drive profitability. With inflation subsiding, retailers are under pressure to increase sales volume. By incentivizing managers to be more efficient and growth-oriented, Walmart aims to ensure better store performance.

Walmart had previously announced pay raises for its U.S. workers starting in January 2023. The revised wages will range from $14 to $19 per hour, compared to the previous range of $12 to $18. These adjustments aim to provide more competitive compensation for employees across different locations.