Why Walmart Managers Can Earn $400,000 Annually

Walmart
WMT
will now grant their store managers as much as $20,000 in Walmart stock annually depending on their performance and the size of the store they are managing. In smaller stores, a store manager can be granted up to $10,000 to $15,000 annually. Combined with the previously announced annual average salary of $128,000 and the ability to earn up to 200% of that salary in bonuses, a Walmart manager could earn as much as $400.000 a year if running a large store.

Wow, that is great. Store managers can truly feel, and act, as if they own the store and ultimately run the store with that mindset. No doubt that will make them more effective. The superstores are typically multi-million-dollar businesses and require a staff of hundreds of people. “It is a far more complex job today than when I managed a store,” said Furner. “Now we will ask our managers to own their roles and to act like owners. And now, literally, they will be owners.”

Walmart has estimated that about 75% of its managers started out as hourly workers, suggesting than many of the early managers never went to college.

However, that has changed. Walmart has more recently looked for college graduates to fill its ranks as the internal pipeline of new manager prospects has slowed down. An example of this new focus: in recent months, Walmart started a program for recent college graduates and students graduating within twelve months to be trained as part of the management team in a local store.

Walmart also announced that the average hourly pay for workers would rise to $18 an hour.

The morale among Walmart associates must be at an all-time high.

Raising the store manager’s salary to a new high has a positive ripple effect for the whole company’s cadre. Every associate now feels that concrete contributions to the success of a store will pay off in a higher salary and greater recognition by management. I think we will see higher productivity throughout the chain of stores as a result. It will also lead to retaining a greater portion of staff, as associates strive for their own promotions and higher pay.

All of this will make working for Walmart more rewarding, and even more fun, under Furner’s leadership. Walmart is still expanding by adding space to existing units and that will create more upside for some managers. Plus, it already has superstores that achieve multi-million-dollar volume that need strong leaders and intense supervision.

POSTSCRIPT: John Furner is today’s hero. He has boosted morale, increased productivity of stores, and recognized that Walmart is a different company today than it was in Sam Walton’s days. Sam always cared about the customer. That care is not gone, but the complexity of the business today requires a store team that is more educated, more merchandise savvy, and more aware of technological advances to deliver a great customer experience. We will see the results of these people management actions in sales and profit achievements. I expect a strong upside in the stock as the performance of stores increases. The New York Times
NYT
estimates that in the last 5 years, the stock rose +43%. This will benefit all Walmart stock owners as well.

Sure, some store managers already proudly own stock, but Furner’s actions ensure that will become more widespread as top performance is recognized by senior management. But it also has a trickledown effect; it will have an effect on the manager’s assistants, co-workers – even the stock team may walk a little faster.