(New York) Walmart is further improving benefits for its U.S. store managers, as the nation’s largest retailer and private employer seeks to retain executives and attract new ones in a still-competitive job market.
Walmart, which has nearly 4,700 namesake stores in the United States, announced Monday that beginning with the company’s new fiscal year, which begins Thursday, U.S. store managers will receive up to $20,000 in awards each year. of Walmart stock.
Walmart shares are up 15% over the past 52 weeks. The stock closed up 1%, or $1.43 per share, at $164.27 on Friday, compared to Thursday.
These measures follow the announcement made by the channel earlier this month. It has committed to increasing the initial base salary of store managers, while revamping its bonus plan to place more emphasis on profits with these managers.
The salary increase and bonus changes will also come into effect on Thursday.
Walmart said it hasn’t made any changes to the pay structure for store managers in more than a decade.
Although turnover rates for U.S. store managers and other employees have stabilized since 2022, pressures on employees have increased.
The acceleration of online services since the pandemic has created more challenges for store managers as they must balance inventories for both store customers and online shoppers.
“Act like owners”
Walmart explained that the amount of the annual stock grant is based on the format of the store.
Thus, the managers of the supercenters, which span approximately 180,000 square feet, will receive $20,000 in the form of shares, while the management of the smaller stores will receive between $10,000 and $15,000 in shares, according to the format.
Walmart said the stock awards would vest over a three-year period. They will be granted in April, the company’s traditional compensation period.
“It’s fair to say we’re asking them to act like owners and think like owners,” John Furner, the CEO of Walmart’s U.S. division, told reporters Sunday. And with this announcement, they will all be owners, and many of them own stock. »
Mr. Furner pointed out that Walmart has long had an employee stock program, where they can buy stock directly and then have the company match 15 percent of their purchases, up to $1,800. $ per year. However, Walmart does not offer a stock discount.
The new starting annual base salary for store managers in the United States will be between $90,000 and $170,000. Previously, the range was $65,000 to $170,000.
That means the average base salary for store executives will increase from $117,000 to $128,000, according to Cedric Clark, executive vice president of store operations at Walmart’s U.S. division.
About 75% of its store managers started as hourly employees, Walmart said.
More pressure on directors
The chief executive of research firm GlobalData, Neil Saunders, notes that Walmart is not only trying to keep its top executives from moving to competitors like Target and Costco, but the company is also offering them more incentives to increase sales. profitability at a time when decreasing inflation is putting more pressure on retailers to sell more items.
High inflation hurt shoppers, but it helped boost overall business sales.
“Ultimately, it’s the store manager who will make or break the store,” says Saunders.
“So they need to get better performance from their existing stores. The way to achieve this is to motivate managers more so that they are more efficient, more motivated in terms of growth and more focused on their objectives, including profitability,” he adds.
Walmart announced in January 2023 that its U.S. workers would receive wage increases the following month, increasing the starting hourly rate to between $14 and $19 per hour. Starting pay previously ranged from $12 to $18 per hour, depending on location.