Wal-Mart adds $2b to hourly workers' pay

Jerdine Gladney of Whitmire, S.C., shops during the grand opening of a Wal-Mart Supercenter in Union, S.C. (Tim Kimzey/Spartanburg Herald-Journal via Associated Press)

GREENSBORO, N.C. - Wal-Mart Stores Inc., the world's largest retailer, plans to award $2 billion in extra compensation to about 1 million US hourly workers this year after sales jumped in the recession.

The amount of the bonuses, profit sharing, discounts, and 401(k) and stock plan contributions being given to employees compares with the $1.8 billion Wal-Mart distributed last year. Payments to employees include $933.6 million in bonuses yesterday, spokeswoman Daphne Davis Moore said by phone.

The payments follow class-action lawsuits from employees and Wal-Mart's opposition to efforts to unionize its stores. The Bentonville, Ark.-based retailer is benefiting from record sales in the fourth quarter that boosted annual revenue by 7.2 percent to $401.2 billion.

Spending more on benefits "signals that Wal-Mart is trying to improve its relationship with workers and reinforces its belief in a nonunion workforce," Walter Todd, who helps manage Wal-Mart shares at Greenwood Capital, said yesterday in a telephone interview.

Wal-Mart fell 49 cents to $49.95 in New York Stock Exchange composite trading. The shares have dropped 11 percent this year.

As part of the payout, Wal-Mart's workers will get $788.8 million in profit sharing and 401(k) contributions this year, chief executive Mike Duke told workers in a memo yesterday.

The bonuses reflect Wal-Mart's "sensitivity to the growing public pressure to share some of its billions in profit with the workers who earned it," David Nassar, executive vice president of Wal-Mart Watch, a consumer advocacy group, said yesterday in an e-mailed statement.

In December, Wal-Mart agreed to pay up to $640 million to settle 63 federal and state class actions claiming the company cheated hourly workers and forced them to work through breaks.

The settlement ended actions pending in most state courts and in federal court in Nevada, and occurred two weeks after a similar agreement in Minnesota.

Wal-Mart Watch, based in Washington, has pressed the retailer to improve wages and benefits and supports the Employee Free Choice Act, which would allow unions to side-step secret ballots.

Yesterday's bonus payout exceeds last year's $636.4 million. Last year's profit sharing and 401(k) contributions were $64.4 million less than Wal-Mart plans to spend this year.

Separately, Wal-Mart has faced gender and racial bias lawsuits from workers. On Feb. 13, Wal-Mart won review of a court ruling that allowed up to 2 million current and former female workers to proceed with the biggest sex bias case in US history. The workers accuse Wal-Mart of paying women less than men and giving them fewer promotions.