Wages and Benefits

We recognize that for some, a job in retail is an important first step in building a long-term career. For others, it may be a second job that provides some extra money to pay the bills or offers the benefits they need to get the medications to treat a chronic illness or ensure a solid retirement.

In a high turnover industry such as retail, being an employer who can meet such diverse needs is a struggle. It takes time and effort to understand those differing levels of need. It also takes a long-term commitment to finding the right combination of wage and benefit solutions that are not only right for our 1.9 million Associates, but also right for the long-term viability of our business. So, as we work to reward Associates for the role they play in driving our success, we are challenged to ensure that our wage and benefits packages are both competitive and economically sound.

Providing a competitive compensation package is not only a means to reward Associates; it is a powerful tool for recruiting and retaining the work force we need to serve our customers and to remain competitive in the global economy.

In the United States, our compensation package is competitive with others in the industry, totaling over $5.2 billion last year. In addition to what the market requires, we base wages on experience, skills, problem-solving and job accountability. The average hourly, full-time wage for Associates in our U.S. stores is $10.76.

These wages, while competitive with industry, are in many cases entry level jobs. We realize that many stakeholders expect us to pay more, while others are concerned about our ability to remain competitive in serving our customers. We see ways to address both concerns. An example of this was our recent advocacy for an increase in the federal minimum wage.

Every Associate is eligible to receive performance bonuses based on the performance of their store. In fact, earlier this year, 813,759 Wal-Mart and Sam’s Club hourly Associates in the United States were awarded more than $529.8 million in bonuses. A full-time, hourly Associate can receive bonuses of up to $1,800 at Wal-Mart Stores and $2,200 at Sam’s Club per year. We also offer a long-term service award, which rewards hourly Associates and assistant managers who have been with the company for 20 years or more with an extra week of pay.

Our view of compensation is a holistic one that takes into account much more than the wages and bonuses we pay. It encompasses health benefits, retirement savings, profit sharing and stock purchase programs that allow our Associates to plan for the future.

Consistent with our belief in sharing our profits, we may contribute up to two percent of an Associate’s salary to the profit-sharing plan and 401(k) plan. Associates are not required to contribute any of their own money to the plans in order to get the company contribution.

Details of the various benefits include:

Health Benefits: All Associates – whether full-time or part-time – can become eligible for health benefits with Wal-Mart, and all children of Associates become eligible for coverage as soon as their parents do. We offer a wide variety of health plan options to meet their differing needs. Every Associate who works in the continental United States can become eligible for individual health coverage that costs as little as $5 per month in some areas and no more than $8 per month nationwide. Moreover, beginning in January 2008, those who participate in our plans will be able to get more than 2,400 generic prescriptions for $4. Read more about Health Care benefits.

401(k) Plan: Wal-Mart may contribute up to two percent of eligible Associates’ annual wages to a 401 (k) plan, after a 12-month waiting period. Contributions may be made even if Associates choose not to add money of their own.

Profit Sharing Plan: Every eligible Associate who has worked for the company for 12 months may receive a company contribution of up to two percent of their wages to a profit sharing account. Contributions are made even if Associates choose not to add money of their own.

Stock Purchase Plan: We contribute to Associates’ stock purchase by matching 15 cents for every dollar of stock purchased through payroll deductions, up to the first $1,800 in purchases each plan year.

Engaging Associates in Company Changes

Over the years, we’ve worked hard to better reward and satisfy our Associates. As we aim to do better, one area where we still have a lot of work to do is scheduling. The challenge is to optimize the availability of both our full-time and part-time Associates in a way that ensures our business needs are met. We recently implemented a new scheduling system that ensures we have enough Associates on the floor during peak customer shopping hours and at the same time enables Associates to enter their preferences in advance so that they can better plan and balance their work and personal lives.

What we learned from this experience is that when we make changes that affect our Associates we must engage them from the beginning. In this instance, we did not. As we work to continually improve compensation, we must keep this critical learning in mind. Forthright communication about scheduling and compensation is perhaps one of the most challenging, yet valuable, benefits we can provide.

How Do Our Benefits Compare?

In a comparison of 20 large retailers and grocers, the Hewitt Benefit Index® found that Wal-Mart’s benefits are competitive. While the Hewitt Benefit Index® average score is 100, Wal-Mart scored 104.8 on all employer-paid benefits, 102 on employer-paid active health care (medical, dental, vision and hearing), and 217.4 on retirement savings. The next closest employer to Wal-Mart in the retirement savings benefits category scored 199.1.