Walmart’s stock split will make it more affordable for workers to buy full shares of the company.
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Walmart made two moves last week that will make it easier for employees to own company shares.Managers will receive annual stock grants of up to $20,000 and the company announced a 3:1 stock split.Walmart CEO said these moves make it more accessible for store associates to purchase shares.
Walmart is trying to get back to one of its roots with recent moves that make it easier for employees to own shares in the company.
The company said last Monday it will award store managers annual stock grants of up to $20,000.
A day later, it announced a 3:1 stock split that will make purchasing full shares more accessible for individual investors, namely employees participating in the company’s share-purchase program.
CEO Doug McMillon said the decision moves the company closer to founder Sam Walton’s desire to make purchasing whole shares within reach for associates.
“Sam and Helen both wanted all of our associates to participate in the upside of the company,” McMillon told John Furner, who leads Walmart’s US division, on Furner’s podcast Thursday. “One of the ways we do that is with a share purchase plan.”
Furner previously said Walmart wants store managers to “act like owners” in his video announcing the stock grants that range from $10,000 to $20,000.
“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,” Furner said in the video.
Walmart’s share price has been over $100 since the spring of 2019, and McMillon said that can make it hard for an associate to buy complete shares through payroll deduction.
Now, with the 3:1 split, if the share price is $165, associates can get the share for around $55, which makes it a lot more accessible, McMillon said.
Those who own stocks will get dividends over the years, allowing associates to share in the success of the company. McMillon also said in the podcast that the company puts an emphasis on saving.
McMillon noted that more than 400,000 associates participate in Walmart’s Associate Stock Purchase Plan, which allows eligible associates to buy stock through payroll deductions and grants a 15% company match on the first $1,800 each year.
While the shared purchase plan has been around for a while, McMillon said in the podcast that he hopes this moment will remind everybody that this is one more way to save for the future.
The announcements came the same week that store managers saw a bump in their annual salaries by over 9% on February 1.
In addition, Walmart plans to overhaul 650 stores across the country over the next year and build or convert over 150 stores in the next five years.