Walmart Inc. is raising the starting base pay for store managers, while redesigning its bonus plan that will put more of an emphasis on profits for these leaders.

The moves, announced Thursday, will be effective Feb. 1. They come as the nation's largest retailer and largest private employer seeks to retain qualified managers and make clear to hourly workers that there's a path for upward mobility in a still highly competitive labor market. Roughly 75% of its store management started out as hourly workers, Walmart said.

Walmart said that the store managers' new starting annual base wage ranges will be from $90,000 to $170,000. Previously, the range was from $65,000 to $170,000. That means that the average base pay for store leaders will go to $128,000 from $117,00, according to Cedric Clark, executive vice president of store operations at Walmart's U.S. division.

The Bentonville, Arkansas-based retailer, which has more than 4,700 namesake stores in the U.S., is also redesigning its store manager bonus program, which had placed a bigger emphasis on sales over profits. With the new bonus plan, profits will play a bigger role in calculating manager's annual bonus. If the manager hits all targets, the bonus could now be as much as double the leader's base salary, said Clark, who started out as an hourly worker. Previously, it was up to one and half times the manager's base salary.

“They're at the forefront of everything we do,” he said. “We’re trying to create opportunities where they can continue to aspire.”

Clark also noted that driving profits to that store allows the company to continue to invest back in price, back to its workers.

Meanwhile, Walmart also said that average wages for hourly workers would exceed $18, up from $17.50. The increase is due to Walmart introducing some higher-paying hourly roles in its Auto Care Centers last year, among other changes, the company said.

Walmart announced in January 2023 that U.S. workers would get pay raises the following month, increasing starting wages to between $14 and $19 an hour. Starting wages had previously ranged between $12 and $18 an hour, depending on location.

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