By Siddharth Cavale
BENTONVILLE, Arkansas (Reuters) -Walmart will pay bonuses to its U.S. hourly store workers, including those at its pharmacy and Vision Center stores, the retailer said on Wednesday, in a move that could boost wages for 700,000 front-line staff.
Both part-time and full-time associates will be eligible for a financial bonus of up to $1,000 a year, the idea for which came from feedback from store workers, Walmart (NYSE:WMT) U.S. CEO John Furner said on a call with reporters.
The move follows Walmart's announcement in January of a bonus redesign for its U.S. store managers, allowing them to earn an annual bonus that's up to 200% of their salary.
"It's important that we are competitive on base wages," Furner said on a call with reporters.
The bonus announcement was made just hours ahead of its annual general meeting where investors voted on seven shareholders proposals, including one urging Walmart to set a compensation policy that provides workers with minimum earnings necessary to meet a family's basic needs.
An hourly worker has to be with the company for a year to be eligible for the bonus, which is calculated based on stores achieving certain performance targets, Furner added.
Walmart employs about 1.6 million U.S. workers, a majority of whom staff its 4,700 Walmart stores.
"Walmart workers fall dramatically short of a living wage... and it fails to address the economic damage" that entails, said a representative of The Shareholder Commons, an activist investor group acting on behalf of the filers of the proposal: Legal & General Investment Management America and a co-filer.
The proposal also noted that Walmart's CEO, Doug McMillon, makes 933 times more than the company's median employee.
Walmart said the bonus plan for associates rewards both performance and long-term employees. The company pays a minimum hourly wage that starts from $14, less than the $15 starting wage at Amazon.com (NASDAQ:AMZN) and Target.
The proposal, which Walmart had previously urged shareholders to vote against, received about 4.4% of the shares that were voted on Wednesday.
Nearly half of Walmart's stock is controlled by the Waltons - the family of founder Sam Walton - raising the bar for any effort to win a majority of investor support.
The U.S. labor market has remained tight, with the Labor Department's latest report showing job growth slowed more than expected in April, while the increase in annual wages fell below 4% for the first time in nearly three years.
"We are seeing a decrease in (store worker) turnover," Furner said.
Walmart also launched an 'Associate to Technician' certification program to help workers transition to higher-paying technician roles in areas such as refrigeration and cooling maintenance, facilities maintenance and automation technician roles, where it has seen some shortages.
The program is aimed to help bridge the gap between the current technician headcount of about 450 to a forecasted demand of about 2,000 two years from now, Walmart's chief talent officer, Lo Stomski, said.
"These jobs make between $19 and $45 an hour and offer opportunities to build a meaningful career."