Walmart announced Monday that it plans to give store managers annual stock grants worth up to $20,000, a benefit that will substantially increase the compensation potential for store managers at the retail giant and follows other pay program changes the company introduced for its store managers earlier this month.
The announcement, made at the company’s annual meeting for store and supply chain leaders in Houston Monday, will give the top store manager at each of the company’s more than 4,600 U.S. stores annual stock grants valued at up to $20,000, depending on the size and format of the store. Store managers leading the company’s largest “supercenters” will get the full amount, while leaders of its stores with fewer departments or smaller formats will see grants of $10,000 to $15,000.
“It’s fair to say that we’re asking them to act like owners and think like owners,” Walmart U.S. CEO John Furner said in a call with reporters. “With this announcement, they will all be owners.” The company currently offers workers an employee stock purchase plan, in which those who purchase stock can have a limited portion of such purchases matched, but this is the first time in the company’s history it will give stock grants to store managers.
The move follows Walmart’s announcement Jan. 18 that it is raising pay for store managers from an average of $117,000 to $128,000, and changing the design of store managers’ annual bonuses, which will put additional weight on store profits in calculating the incentive, and expand the potential payout from 150% to 200% of base salary. Before that announcement, the company had not made any changes to store manager pay in more than a decade; the company says the investment is being made in order to update the plan, and to follow raises the retailer has given hourly store workers in recent years.
Furner said store manager turnover has stabilized “quite a bit” since 2022, and that the stock grants are being added in part due to the increasing complexity of running Walmart stores, which are each multimillion-dollar operations that involve hiring and managing hundreds of workers. In recent years, store managers have had to take on additional responsibilities as the company has merged its e-commerce and store operations and rapidly scaled up its store pickup business.
Still, the move could still help with retention in a highly competitive retail labor market, as grants will be made annually but vest on a quarterly basis over a three year period. That means managers will get access to about one-twelfth of the value of the grant each quarter, with new grants being made each year, incentivizing longevity with the company. The new benefit is only available to the top store manager in each store.
The retail industry is not known for being particularly generous with pay or benefits, a reputation that, before changes the retailer has made in recent years, included Walmart. Some companies do give stock grants of varying sizes to workers: Starbucks has long granted “bean stalk” to workers, and in 2015 Apple opened its restricted stock unit grants to all employees. Costco is reported to make stock grants to its warehouse managers, and some private companies like Publix are also known for providing stock to eligible store employees.
A 2022 survey from Morgan Stanley At Work found that one in three respondents—all leaders responsible for managing equity compensation plans—said they were looking to expand their equity pay programs to more employees. Bank of America, for instance, has expanded its restricted stock grants to employees making less than $100,000 per year, according to a 2022 report from CNN.
At Walmart, says Furner, who worked as an hourly employee at a store in college, some 75% of store, club and warehouse managers started as hourly workers. “This is really in our DNA and who we are,” Furner says, “to push ownership to the people who are closest to the customer.”
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