Wal­greens cuts bonuses for man­agers

Change comes month after raises for hourly em­ploy­ees

Chicago Tribune (Sunday) - - BUSINESS - By Lisa Schencker lschencker@chicagotri­bune.com

Wal­greens is slash­ing bonuses re­ceived by store man­agers and oth­ers in man­age­ment, in many cases by thou­sands of dol­lars each — a move that fol­lows a se­ries of changes to the store’s em­ployee ben­e­fits.

Deer­field-based Wal­greens told man­agers about the cuts to their bonuses in late Oc­to­ber, ac­cord­ing to sources fa­mil­iar with the sit­u­a­tion.

Store man­agers and oth­ers re­ceive an­nual bonuses based on a num­ber of fac­tors, in­clud­ing in­di­vid­ual, store and com­pany per­for­mance. This year, those bonuses were much lower than what store man­agers typ­i­cally re­ceive and ex­pected to get, sources said.

Wal­greens spokesman Brian Faith de­clined to dis­cuss em­ployee com­pen­sa­tion, other than to say that the bonuses in ques­tion typ­i­cally go to man­age­ment and ex­ec­u­tive em­ploy­ees. Wal­greens has more than 9,500 stores in the U.S.

Ear­lier this year, Wal­greens pledged to spend $100 mil­lion to raise the wages of hourly store work­ers. Those raises took ef­fect Oct. 1 and were ex­pected to ben­e­fit about 100,000 of Wal­greens’ 170,000 store work­ers.

“We re­main con­fi­dent that with the of­fer we have at lo­cal level and the way that we treat our peo­ple in stores, look after them in dif­fer­ent ways, that we’ll re­main a very, very com­pet­i­tive em­ployer,” Wal­greens Co-Chief Oper­at­ing Of­fi­cer Alexan­der Gourlay said dur­ing the com­pany’s Oc­to­ber earn­ings call, in re­sponse to a ques­tion from an an­a­lyst about hir­ing and re­ten­tion, given Ama­zon’s re­cent de­ci­sion to boost wages.

Last month, Ama­zon said it would in­crease em­ployee pay to at least $15 an hour, but it also de­cided to get rid of bonuses and stock awards for ware­house work­ers and other hourly em­ploy­ees.

The Wal­greens bonus cuts took many store and other man­agers by sur­prise, though they come amid a num­ber of other changes to em­ployee ben­e­fits.

The drug­store chain re­cently de­cided that start­ing in 2019, em­ploy­ees won’t qual­ify for paid time off un­less they work at least 30 hours a week, ver­sus 20 hours cur­rently. Wal­greens also de­cided to elim­i­nate health in­sur­ance for a num­ber of its el­i­gi­ble re­tirees after 2019.

The com­pany also, how­ever, is adding a paid parental leave ben­e­fit that will of­fer full pay for eight weeks of leave to new moth­ers and fa­thers. Also, it is ex­pand­ing short-term dis­abil­ity leaves for hourly em­ploy­ees work­ing at least 30 hours a week.

In its re­cent fourth-quar­ter earn­ings, Wal­greens beat es­ti­mates with earn­ings per share of $1.48. Sales also rose nearly 11 per­cent to $33.4 bil­lion from the fourth quar­ter of last year, though that was lower than an­a­lysts’ ex­pec­ta­tions.

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