Wal-Mart Joins the Bonus Ball
But these handouts are for underlings, not executives.
Wal-Mart (WMT) plans to award about $2 billion to employees following strong sales.
The awards for hourly employees include about $933.6 million in bonuses, $788.8 million in profit-sharing and retirement contributions and millions of dollars in contributions to employees' stock purchase plan and merchandise discounts.
CEO Mike Duke, who became head of the world's largest retailer about 6 weeks ago, said in a memo to employees:
"Now we need to accelerate and broaden all our efforts. We have a vision for where we want to take Wal-Mart. Our strategy is working and we're building momentum. As we move with a new sense of urgency and with every associate participating, we will make our business even stronger."
The bonuses average $933 per qualified employee and include workers such as stockers and cashiers. Last year, Wal-Mart awarded $1.8 billion, including about $636.4 million in bonuses.
Wal-Mart announced the payments about a week after versions of the "Employee Free Choice Act" were introduced in both houses of Congress. If the "card check" bill becomes law, it would eliminate the secret ballot for unionization efforts and make it easier for unions to organize businesses. A cynic would say -- and there are no cynics in Minyanville -- that the measure is the Democrats' reward for overwhelming union support in November's general election.
Wal-Mart's emphasis on low prices has boosted sales in the recession. The company said February's same-store sales, or sales at stores open a year or more, rose 5.1%, beating analysts' consensus estimate of a 2.4% increase.
Meanwhile, rival Target (TGT) said same-store sales fell 4.1% in February, lower than the 4.8% drop analysts expected.
Costco (COST), the nation's largest operator of membership warehouse stores, said February same-store sales increased 4%. Sales at Wal-Mart's Sam's Club, the number 2 chain in the sector, were up 5.9%. Sales at BJ's (BJ), number 3 in the sector, rose 8.2%. The common theme: Bargains during the economic downturn.
Wal-Mart is viewed as the Great Satan in some circles, and it should be interesting to see how its bonuses to rank-and-file workers play out during the flap over bonuses paid to top executives at American International Group (AIG).
Somehow, it's hard to imagine Wal-Mart will receive an "atta-boy" from those who fuss and fulminate about executive bonuses.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter