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Walmart Wants More Employee Ownership in the Company
February 6, 2024
Last week, Walmart made two shifts that will create a simpler path for employees to own company shares, according to Business Insider.
Last Monday, Walmart said it will reward store managers with annual stock grants of up to $20,000. Just a day later, it unveiled a 3:1 stock split, making the purchase of full shares more attainable for individual investors, especially employees taking part in Walmart’s share-purchase program.
CEO Doug McMillon explained that this transition aligns the company more closely with founder Sam Walton’s vision of enabling associates to easily acquire whole shares. McMillon told John Furner, who leads Walmart’s U.S. division, on Furner’s podcast Thursday, “Sam and Helen both wanted all of our associates to participate in the upside of the company. One of the ways we do that is with a share purchase plan.”
Furner said in a video announcing the stock grants that Walmart wanted store managers to “act like owners,” and he explained that the grants will range from $10,000 to $20,000. He said in the video, “A Walmart store manager is running a multi-million dollar business and managing hundreds of people, and it’s a far more complex job today than when I managed a store.”
Since spring 2019, Walmart has maintained a strong share price exceeding $100. McMillon said that due to this high price point, it’s difficult for an associate to purchase full shares through payroll deduction. However, with the new 3:1 split, if the share price is $165, associates can buy the share for around $55. This adjustment makes it far more within reach.
Over the year, those who own stocks will receive dividends, which allow associates to enjoy the success of the company.
McMillon stated that over 400,000 associates participated in Walmart’s Associate Stock Purchase Plan, which allows eligible associates to buy shares through payroll deductions. Additionally, the plan offers a 15% company match on the first $1,800 invested annually.
Although the share purchase plan has existed for a while, McMillon expressed in the podcast his hope that this moment will serve as a reminder to everyone that it’s another avenue for saving for the future.
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