For decades, Wal-Mart associates, as they have been called because of that plan, lived from paycheck to paycheck, trying to make ends meet on near-poverty level wages, comforted by the illusion that they were partners in Sam Walton’s legacy.
The illusion was shattered this week with the announcement that the profit sharing plan is being eliminated in favor of a retirement plan that will be offered to employees.
According to Associated Press:
The discounter will replace profit-sharing starting in February with retirement plan contributions of up to 6 percent of pay -- as long as workers sign up and contribute an equal amount, Wal-Mart said in a memo it provided The Associated Press late Friday.
Though the retailer indicated this would add four percent to the employee’s pay package, don’t expect Wal-Mart to fork over much of its profits since that contribution of six percent of their pay is far more than most employees can afford.
The announcement came just one week after Wal-Mart showed how much it cares about how its employees will fare once they retire. A Sept. 29 SEC filing shows the consideration the company pays to employees when it comes to their golden years- at least when those employees are at the top of the ladder.
The filing revealed the retirement package being given to CFO Thomas Schoewe when he leaves the company’s employ Jan. 31, 2011:
Mr. Schoewe shall receive total transition payments of $1,654,848, less applicable withholding (the “Transition Payments”). As soon as practical after the Retirement Date, but not to exceed 45 days after the Retirement Date, Mr. Schoewe will receive the first installment of the Transition Payments in a lump-sum payment in the amount of $ 413,712, less applicable withholding. Thereafter, Mr. Schoewe will receive the remaining $ 1,241,136 of the Transition Payments, less applicable withholding, over an eighteen (18) month period in equal bi-weekly installments beginning at the end of the regularly scheduled pay period six (6) months after the Retirement Date.
If a Wal-Mart associate were to receive, say $40,000 annually under the new plan, and odds are that is far more than the total will actually be, that would mean Schoewe will receive 40 years worth of retirement in 18 months.
And this is for someone who obviously is being shown the door, despite the retirement label.
Of course, these decisions are being made by a CEO, Michael Duke, who received a pay package of $19.2 million last year, has a base salary of $1.2 million, can make up to 400 percent of his salary for his annual bonus, and has his life insurance and health insurance paid for, free use of the company car and plane, and generous stock gifts,
Wal-Mart has also seen fit to provide Duke with another incentive, which considering he put more than 11,000 people out on the streets last year, is particularly galling.
Duke receives the employee discount on all Wal-Mart items.