Bank of America and Walmart are using stock grants to retain workers

Bank of America and Walmart recently announced they would provide certain employees with stock grants, a move to engender employee loyalty and strengthen retention in a still-tight labor market.

The goods. Bank of America will distribute $800 million worth of restricted stock across most of its workforce, according to a Jan. 25 memo reported on by Bloomberg and Reuters. Under the incentive, employees who earn as much as $500,000 a year will receive restricted stock on top of their regular compensation. Since the bank rolled out this program in 2017, it has distributed $4.8 billion in restricted stock, Bloomberg reported.

In the memo, Bank of America CEO Brian Moynihan said staff’s hard work had allowed the firm to invest “in programs and services designed to help our teammates enjoy long and successful careers with our company.”

On Jan. 29, Walmart announced store managers will be eligible to receive company stock worth up to $20,000 a year. Coupled with a bonus of up to 200% of employees’ base salary that the company is now offering, “a successful manager of a large Walmart store can earn up to $404,000 a year in total compensation,” the Wall Street Journal reported.

In a LinkedIn video explaining the decision to offer store managers the stock, Walmart US President and CEO John Furner said, “we ask our managers to own their roles and to act like owners. And now they’ll literally be owners.”

Walmart also announced a 3-for-1 stock split on Jan. 30, in part to make it easier for store associates to purchase shares. Eligible Walmart associates can purchase stock through payroll deductions, and the company matches 15% on the first $1,800 they contribute each year.

The reason for the goods. Equity, a form of compensation that gives employees partial ownership of where they work, is seen by many HR leaders as a way to motivate employees and keep them engaged, HR Brew previously reported.

Both the retail and banking sectors have struggled to retain workers since the Covid-19 pandemic began.

Raising wages is one tool HR departments have used to hold onto talent, but offering stock is another lever employers can pull. Morgan Stanley surveyed 86,000 domestic stock plan participants in 2022, and 45% said stock plan benefits were a reason they joined their companies, while 60% cited them as a reason for staying at their firms.