(Feb 23): Walmart Inc’s bonuses for US corporate staff will once again surpass their target, a reflection of the retailer’s strong performance and share gains.
It will pay US corporate employees 121% of their eligible bonuses next month, according to a memo viewed by Bloomberg News. That amount is similar to last year’s 122%. Bonuses, which max out at 125% at Walmart, are calculated based on both individual and company’s performance.
A Walmart spokeswoman declined to comment further. This marks at least the third consecutive year for the metric to come in higher than the goal, which is 100%.
The retailer has had a strong run in recent years, attracting cost-conscious consumers with low prices and a wide product assortment. Walmart’s online operations, particularly fast delivery, has broadened its appeal to wealthier households seeking convenience. Walmart’s market value hit US$1 trillion for the first time this month, as new chief executive officer John Furner takes over to lead the company into a new era of artificial intelligence.
On Thursday, the Bentonville, Arkansas-based company offered a conservative outlook for the new fiscal year due to the shaky macroeconomic environment. Shares rose 0.7% at the open in New York on Monday after gaining 10% year to date through Friday’s close and 23% last year.
Walmart’s sales grew 5% over the past fiscal year, adding more than US$30 billion to its top line, while profit rose at a higher pace thanks to its advertising, membership and other non-retail businesses. Still, Amazon.com Inc just overtook Walmart to become the biggest global company by revenue.
E-commerce has been fuelling Walmart’s expansion and is expected to be its main driver of growth going forward. Digital sales represented about 23% of Walmart’s US sales during the last quarter — a record — according to a separate memo sent to staff. The company delivered 8.6 billion units via same- or next-day delivery, which was another record.
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Many companies are currently holding their annual compensation conversations with staffers. Some of Walmart’s peers have signalled belt-tightening, with Home Depot Inc making requirements for managers’ bonus payouts more strict.
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