A Walmart Inc. (NYSE: WMT) manager who runs a dozen stores can now make over $600,000 a year, which is as much as some publicly traded company CEOs do. Walmart calls these workers “market managers.”
24/7 Wall St. Key Points:
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A Walmart Inc. (NYSE: WMT) manager who runs a dozen stores can now make over $600,000 a year.
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These boots-on-the-ground managers are key to Walmart’s success.
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Why Pay Managers So Much?
According to The Wall Street Journal, some Walmart employees who have desk jobs face lower compensation. Much of the market manager pay comes from bonuses and stock grants, the way that senior executives’ compensation does. The base pay for these managers is $160,000, the paper reports.
High pay is essential to keep these critical managers. Other large retailers, like Home Depot, have similar positions. The home improvement company often pays over $100,000 for people who run a single store.
The boots-on-the-ground managers are key to the company’s success in the United States. Its 4,606 stores are the backbone of most of its revenue. Most of its 1.6 million U.S. workers are store-located. Ninety percent of the U.S. population lives within 10 miles of a Walmart location.
Walmart’s U.S. revenue in the most recent quarter was $114.9 billion, up 5%. Operating income for the unit was up 9.1% to $5.4 billion.
Its stores have become a key to fighting its primary nemesis, Amazon.com Inc. (NASDAQ: AMZN). For years, there was an expectation that Amazon would crush most of the nation’s brick-and-mortar retailers. While that may be true with others, Walmart has continued to grow. It uses its stores as a strategic advantage, in that its customers can shop online and pick up their orders at one of its stores almost immediately. There is even an app for people who want to use the service.
Why can Walmart store managers make $600,000? Well-run stores are the backbone of its success.
By the way, Walmart shares are up 73% in the past year, while Amazon’s are only 51% higher.
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