Breaking News
empowering the workforce walmart and chipotle lead in employee stock ownership 3


Empowering the Workforce: Walmart and Chipotle Lead in Employee Stock Ownership


Robert Tavares

March 31, 2024 - 14:00 pm


Stock Splits: A New Tactic for Employee Wealth-Building in Major US Corporations

In recent fiscal maneuvers, retail giant Walmart and fast-casual restaurant chain Chipotle have enacted stock splits, a strategic move with intentions beyond merely influencing market dynamics. This decision echoes a shared objective: to make share purchasing more accessible for the very heart of their operations—their workforce. Both corporations are trailblazing a financial pathway aimed at cultivating long-term rewards for their personnel through offering slices of their publicly traded empire.

The Supporting Winds of a Strong Market

A flourishing stock market frequently witnesses multinational companies like Walmart and Chipotle orchestrating stock splits as part of their growth strategy. Walmart's stocks peaked at a monumental $170 just before the split, while Chipotle's valuation soared even higher, approaching $3,000 per share. It is in this climate of market prosperity that these splits find their fertile ground.

Walmart heralded in February the consummation of its 3-for-1 stock split, the first occurrence in over two decades. This strategic gesture was motivated by a meticulous analysis to identify the ideal trading and distribution levels, yet more importantly, it stemmed from a driving desire to place stock ownership squarely within their associates' financial reach.

Chipotle's inaugural stock split in its three-decade history rings with a similar tone. Anticipated for activation on June 26, the move resonates not only with Walmart's intentions but also with a broader corporate shift towards the incentivization of stock investment amongst employees.

Stock Splits: More Than Just Affordability

Yet, unfolding this narrative further reveals layers of complexity. While reduced share prices indeed democratize equity ownership, this does not automatically translate into a rush of lower-tier employees acquiring stock. Michael Kestenbaum, managing director of Gallagher's executive compensation practice, notes that the expectation of a widespread employee-led equity buying spree might be optimistic at best.

Despite the affordability a stock split entails, the reality is that incentives and financial literacy play defining roles. For many employees, especially those at lower income levels, grappling with daily financial commitments often takes precedence over investing in stock—regardless of the potential long-term benefits.

Both Walmart and Chipotle recognize that cutting share prices is but a part of a multifaceted approach to nurturing stock ownership among their staff members. This approach encompasses employee stock purchase plans (ESPPs) with discounts and comprehensive financial enlightenment initiatives.

ESPP: A Stepping Stone to Ownership

The pursuit of stock ownership could be a less daunting quest for employees even without a split, as partial ownership through brokerage accounts has always been an option. Nevertheless, ESPPs hold a certain allure, procuring stocks directly from wages—often at a discount. Walmart's associate stock purchase plan allows associates to acquire shares with a 15% match from the company on year-round payroll deductions of up to $1,800.

Chipotle's ESPP, detailed in a regulatory filing, offers its workforce the option to purchase stock every quarter at 92.5% of the fair market value determined within the offering period. Yet, the appeal of whole shares over fractions persists, as the transferability and liquidity of whole stocks generally surpass that of fractional shares.

Financial Education as the Bedrock

Beyond the mechanics of acquiring stocks, financial education remains pivotal. Bright examples come from tech companies on the West Coast, boasting high ESPP participation rates which can be attributed to engraining the ESPP into corporate culture. Dan Kapinos, a partner at Aon, asserts that enterprises which prioritize educating their workforce about stock ownership observe significantly higher enrolment in ESPPs.

Silicon Valley giants like Google once stood at the forefront, empowering employees with stock option knowledge before their public listings. Lack of financial literacy, however, continues to be a hurdle for broader adoption, as observed in a MetLife study which reveals a mere 54% of employers provide financial planning and education workshops or tools.

Juggling Financial Priorities

The movement towards robust financial education is evident in initiatives like Walmart's partnership with Khan Academy, which offers free online financial literacy courses, and Chipotle's alliance with SoFi, empowering employees with financial tools through the SoFi at Work Dashboard.

Despite these educational measures, the priority for many employees, especially those earning modest wages, is to fulfill basic needs like food and shelter. The sentiment is captured in BlackRock Chairman Larry Fink's annual letter, which calls attention to society's disproportionate focus on longevity over affordability of longevity.

Considering Low-Cost Index Funds and Retirement Planning

Moreover, even for those with available funds, diversified investments such as low-cost index funds might offer a safer avenue for growing wealth over time. The idea is to construct a diversified investment portfolio as opposed to being overly reliant on one's employer's stock, thereby mitigating risk.

For many workers, the act of saving for retirement itself is an undertaking that consumes virtually all of their disposable income, further hampering their ability to engage in stock purchasing.

Enhancing Financial Incentives for Employees

If equity distribution among employees is the true endgame for companies, there are several viable strategies at their disposal. Some have chosen to enrich the structure of their ESPPs; others, like Bank of America, have opted to impart restricted stock bonuses to the vast majority of their crew.

Walmart, for instance, now grants annual stock bonuses reaching up to $20,000 for its managers, a move that showcases a tangible push towards promoting ownership and investment within its staff base.

Yet, while shares and bonuses may hold potent motivational allure, companies should also factor in the financial implications of such strategies, especially in the case of firms with extensive employee rosters.


As corporate behemoths like Walmart and Chipotle execute stock splits aimed at enriching their workforce, the overarching narrative unfolds a tale of intent versus reality. The ideal of making stock ownership widespread amongst employees hinges on several interconnected features: affordability, inclusive ESPPs, profound financial education, and augmented incentives. In the end, these measures collectively aim to create a workforce that is not only engaged but also vested—in the truest sense of the word—in the success and prosperity of the companies they serve.

While a thousand words may encapsulate the essence, the remaining intricacies within this tale of financial inclusion, education, and empowerment lie in the lived experiences of the workforce. As they navigate the waters of investment and stock ownership, one thing is clear: the commitment to increase employee shareholder ranks will continue to evolve, adapt, and hopefully thrive in the years to come.