Paying Walmart Managers Millions Is Just Good Business

After being on the frontline of the pandemic, then grappling with an edgy public and a spike in shoplifting, its been a tough few years to work retail. But for Walmart Inc. managers, at least, things are looking up.

In January, the company announced that it would significantly boost store managers’ pay. They will now receive annual stock grants of as much as $20,000. Average base salaries were raised to $128,000 a year, from $117,000. The retailer has also changed the way it calculates bonuses: It will continue to evaluate sales, but the profit generated by a manager’s store will play a bigger role, motivating the leaders to improve performance. If a manager hits all targets, they could earn a bonus of up to 200% of base salary. All told, a successful manager of a high-performing store could now pass the $500,000 mark, according to Bloomberg News.

That’s far more than the typical pay of a US store manager, which is around $100,000 per year (though those running complex locations are frequently paid more).

Although the announcement raised analyst eyebrows, it’s a smart move for Walmart — and given that the company’s influence as the world’s biggest retailer, could be good for society too.

It made the change to hold onto key managers, who are especially important at Walmart’s supercenters, which can be as big to 200,000 square feet and stock more than 100,000 product lines.

But the pay bump can help in other ways, too. Walmart has been attracting more higher-income consumers as middle-class families have seen their incomes squeezed by inflation. One of the simplest ways to keep them coming back is to get the retail basics right: keep the fresh produce appealing, shelves stocked and aisles clean. Motivated managers can make a difference.