Compensation & Benefits Pay, Performance, Promotions

Walmart’s pay ratio reflects a business model that perpetuates income inequality

Walmart’s CEO earns 1,188 times as much as the company’s median worker.

In other words, it would take 11 such employees a century to earn what the CEO made in 2017.

It would take 100 such employees more than a decade. Walmart CEO Doug McMillon’s total compensation of $22.8 million certainly let’s him live by Walmart’s slogan to “save money and live better,” but the story for employees and long-term shareholders is different. McMillon received a salary of $1.28 million, $15.69 million in stock-based pay, $4.74 million in non-equity incentive pay and another $1.1 million “other compensation.”

WalMart is the largest private-sector employer in the United States, with approximately 1.5 million employees. Half of them take home less than $19,177 per year.

A consumer-facing business requires consumers that have discretionary income, as Henry Ford famously observed when he raised wages enough so that employees could purchase his automobiles. Many of the products sold at WalMart are staples that can and are often purchased with food stamps. Much has been written about the way that Walmart’s low pay means that employees rely on government assistance to make ends meet. But the margins on such items cannot sustain the company. [ More]

Thanks for commenting!