NEW YORK – Walmart is further sweetening the perks for its U.S. store managers as the nation's largest retailer and private employer seeks to retain its leaders and attract new ones in a still competitive job market.
Walmart, which is based in Bentonville, Arkansas, and has almost 4,700 U.S. namesake stores, said Monday that starting with the company's new fiscal year, which begins Thursday, U.S. store managers will receive up to $20,000 in Walmart stock grants every year.
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Walmart shares have risen 15% in the past 52 weeks. The stock closed up 1%, or $1.43 per share, at $164.27 on Friday, from Thursday.
The moves follow an announcement made by the discounter earlier in the month that it would raise the starting base pay for store managers, while redesigning its bonus plan to emphasize profits more with these leaders. The pay raise and bonus change will also be effective Thursday.
Walmart said it hasn't made any changes to store managers' pay structure in more than a decade.
And though turnover rates for U.S. store managers and the rest of its workers have stabilized since 2022, pressures on employees have increased. The acceleration of online services like BOPIS, for "buy online pickup in stores," since the pandemic have created more challenges for store leaders, as they balance inventory for both store customers and online shoppers.
Walmart said the amount of the annual stock grant is based on the store format. U.S. managers of the sprawling supercenters, which run about 180,000 square feet, will receive $20,000 in stock grants. Those leading the smaller Neighborhood Market stores — as well as the so-called “division 1” stores, which sell mostly general merchandise — will get $15,000 in stock grants. And those who lead the Hometown stores, a smaller version of the division 1 stores, will receive $10,000 in stock grants every year, the company said.
Walmart said the stock grants will vest over a three-year period, with ownership for one-twelfth of the grant total coming every quarter. The grants will be given in April, which is the company's traditional time for its compensation period.
“It’s fair to say that we’re asking them to act like owners and to think like owners, ” said John Furner, CEO of Walmart U.S. division in a call to reporters on Sunday. “And with this announcement, they will all be owners, and many of them do own stock."
In fact, Furner noted that Walmart has long had an employee stock program where employees can buy stock directly and then have the company match 15% of the employees' purchase, up to $1,800 per year. However, Walmart doesn't offer a discount for the stock.
The new starting annual base salary for U.S. store managers will range from $90,000 to $170,000. Previously, the range was from $65,000 to $170,000. That means that the average base pay for store leaders will go to $128,000 from $117,000, according to Cedric Clark, executive vice president of store operations at Walmart’s U.S. division.
Roughly 75% of its store management started out as hourly workers, Walmart said.
Neil Saunders, a managing director with research firm GlobalData, noted that Walmart is not only trying to keep its top leaders from going to competitors like Target and Costco, but also offering them more incentives to drive profitability at a time when subsiding inflation puts more pressure on retailers to sell more items. Surging inflation was bad for shoppers, but it helped inflate overall sales for companies.
“The store manager will make or break the store ultimately,” Saunders said. “So they need to get better performance from their existing stores. The way to do that is to incentivize managers more so that they are more efficient, more driven in terms of producing growth and more laser like focus on their targets, including profitability.”
Walmart announced in January 2023 that U.S. workers would get pay raises the following month, increasing starting wages to between $14 and $19 an hour. Starting wages had previously ranged between $12 and $18 an hour, depending on location.