Walmart, the nation’s largest private employer, is raising salaries and benefits for store managers as it looks for ways to retain them.
Walmart said on Monday that managers of its U.S. stores would be eligible for grants of up to $20,000 in company stock every year. The stock will vest over a three-year period, with a percentage vested each quarter.
Earlier this month, Walmart said it would increase the average salary for store managers to $128,000 from $117,000. The big-box retailer also said bonuses for store managers could reach up to 200 percent of base salary, with a store’s profitability becoming a bigger factor in the calculation.
Store managers are crucial in driving sales and profitability within their stores and keeping morale high in a dynamic business. The managers are also seen as an important pipeline for leadership at the company.
A store manager at a Walmart Supercenter oversees hundreds of employees who work across a variety of departments, including food, apparel, pharmacies and auto centers. These stores often attract scores of shoppers and bring in millions of dollars in sales each year. At the start of the Covid pandemic, store managers were given even more responsibilities as the company adapted to changing consumer behavior, including managing e-commerce abilities like in-store pickup for online orders and navigating goods that are out of stock as well as excess inventory.
“It’s fair to say that we’re asking them to act like owners and to think like owners,” John Furner, the chief executive of Walmart U.S. and previously a manager at a company store, said in a briefing with reporters.
The size of the stock grant to managers will be based on the Walmart store format. Managers at Supercenters will be eligible for the most, up to $20,000 a year. For the other two tiers of stores, which are often smaller and have fewer departments, managers will be eligible for $10,000 or $15,000 in annual stock grants.
Retailers have sought ways to retain workers as people moved in and out of jobs throughout the pandemic in search of higher wages and more opportunities. Until recently, Walmart concentrated on increasing wages for store workers. Turnover within Walmart’s stores stabilized after 2022, and the company feels good about its staffing levels, Mr. Furner said.
“The store manager ranks have been more stable the last couple of years,” he said.
“We’re keeping store managers in their location a bit longer, and it’s good for an entire team to have a manager for a few years versus a year or something less than that,” he added. “So that’s a good sign.”
Mr. Furner noted that Walmart already had a stock purchase program that matched 15 percent of an employee’s purchase up to $1,800. But Monday’s announcement goes beyond that.
He also said the new program would allow store managers to share in the rewards of a growing business and rising stock price. On Friday, Walmart’s stock closed at $164.27. Over the last five years, it has increased nearly 43 percent.
“If we perform well and the price of the stock goes up, then our management teams, our store managers in particular, will be able to participate,” Mr. Furner said.