Walmart Inc. is offering annual stock grants as a new incentive for store managers, bringing potential pay for the most successful ones to more than US$400,000.

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Starting in April, all United States store managers will receive as much as US$20,000 in Walmart stock every year, as the world’s largest retailer seeks to attract and retain staff. The amount of stock grants will vary by store format, with those overseeing smaller outlets eligible for less, the company said Monday.

Stock grants are the company’s latest effort to boost compensation for managers. It said in January that the average store manager’s salary will increase to US$128,000 from US$117,000. Walmart is also redesigning its bonus program so that store profits play a bigger role in determining awards. Managers can now receive as much as 200 per cent of their base salary in bonuses if targets are met. About 75 per cent of Walmart’s managers started as hourly employees and on average took about five years to land a management role, according to the company.

A manager making the new average salary and hitting the top end of the bonus range could make US$404,000 a year with the maximum stock grant.

“We are asking them to act like owners and to think like owners,” said John Furner, chief executive of Walmart U.S., who worked as a store manager after starting at the company as an hourly employee over 30 years ago.

Key role

Store managers play a key role at Walmart. At a typical supercentre, they oversee hundreds of employees, ensure stores are stocked and manage multiple millions of dollars in sales for locations that offer everything from groceries and apparel to pharmacy and auto services. Running delivery and pickup operations has become a bigger part of the job in recent years.

The stock grants for managers will vest quarterly over a three-year period. Managers for neighbourhood markets and Division 1 stores will each get US$15,000, and those for hometown stores will receive US$10,000. Division 1 and hometown stores, started during the company’s early days, mostly sell general-merchandise products.

We are asking them to act like owners and to think like owners

John Furner, CEO, Walmart U.S.

Walmart will continue to offer a stock purchase program for employees, through which staff buy stock directly and the company matches 15 per cent of the purchase, up to US$1,800 a year.

Meanwhile, Walmart lowered its starting pay for some new hires as part of a revamped wage structure, a move that affected online-order pickers, shelf stockers and other employees.

After facing severe labour shortages during the pandemic, retailers including Walmart have experienced improvements in staffing, though retention remains a challenge for some. U.S. jobless rates have remained relatively low, while average hourly earnings have increased in recent months.

Walmart’s turnover rates have improved among managers and other employees over the past year or so, Furner said, as supply challenges stabilized. Managers are staying at their stores longer, and the company didn’t hire as many people last fall for the holiday season.

“We are feeling really good about our staffing levels,” he said.

Bloomberg.com