Written by Siddharth Kavali
BENTONVILLE, Arkansas (Reuters) – Walmart Inc will pay bonuses to hourly workers at its U.S. stores, including those at pharmacies and Vision Center stores, the retailer said on Wednesday, in a move that could boost wages for 700,000 front-line employees.
Both part-time and full-time associates will be eligible for a cash bonus of up to $1,000 annually, an idea that came from feedback from store workers, Walmart (NYSE:) CEO John Forner said on a call with reporters.
The move follows Walmart's announcement in January of a redesigned bonus for its US store managers, allowing them to receive an annual bonus of up to 200% of their salaries.
“It is important that we are able to compete on the basis of basic wages,” Wörner said in a call with reporters.
He added that an hourly worker must stay with the company for a year to be eligible for the bonus, which is calculated based on stores meeting certain performance goals.
Walmart employs about 1.6 million U.S. workers, most of whom work in Walmart's 4,700 stores.
The bonus was announced just hours before the annual general meeting where investors voted on seven shareholder proposals, including one urging Walmart to establish a compensation policy that would provide workers with the minimum earnings needed to meet the family's basic needs. The results of the shareholder vote will be announced later on Wednesday.
“Wal-Mart workers fall significantly short of meeting a living wage…and are failing to address the economic harm” that ensues, said a representative of the General Shareholders Association, on behalf of the proponents: Legal & General Investment Management America and File participant.
The proposal also noted that Walmart CEO Doug McMillon is paid 933 times more than the company's average employee.
Walmart said the associate bonus plan rewards long-term performance and employees. The company pays a minimum hourly wage starting at $14, less than the $15 starting wage at Amazon.com (NASDAQ:) and Target.
The US labor market remained tight, with the latest Labor Department report showing job growth slowed more than expected in April, while annual wage increases fell below 4% for the first time in nearly three years.
“We're seeing a decrease in (store worker) turnover,” Forner said.
Walmart also launched a “Technician Assistant” certification program to help workers move into higher-paying technical roles in areas such as refrigeration and refrigeration maintenance, facility maintenance and automation technician roles, where it has seen some shortages.
The program aims to help bridge the gap between the current number of technicians of about 450 and the expected demand of about 2,000 two years from now, said Lou Stomsky, Walmart's chief talent officer.
“These jobs pay $19 to $45 per hour and provide opportunities to build a meaningful career.”