Woolworths Rewards Employees With $57m in Shares
Woolworths recognises the value of essential workers, with over 30,000 full-time employees each receiving AUD750 worth of Woolworth shares. 70,000 part-time staff will be given shares in proportion to their position. The number of shares will depend upon the share price in July, which is when they will be issued. Given the recent macroeconomic event of COVID-19, Woolworths is now dedicated to rewarding the essential workforce for their efforts during a time of panic hoarding and disruption. Compounding upon the hardship was a historical context of volcanic activity in New Zealand, bushfires, drought, and flood, which disrupted some supply chains earlier in the year.
Hospitality sector shutdown affected the retail giant during this time, but even so there was a sales growth of 11.3 per cent and a 34 per cent growth in online sales as Australians stayed safe at home in April. However, in March, a 40 per cent increase in sales shook Woolworths cash registers. The number of perishables that Australians consumed began to threaten safety, ending with the Prime Minister calling for people to stop hoarding.
Financial statistics aside, Woolworths acted as a community-centred corporation during a time of crisis. A partnership with Meals on Wheels saw their network of volunteers utilised to deliver 320,000 rolls of toilet paper to vulnerable Australians. New protocols implemented promoting social distancing in stores as well as distribution centres and offices. Additionally, hygiene standards were elevated, and plexiglass was installed in checkout areas. AUD1.5 million was donated to children's health charities to mitigate the cancellation of fundraising events along with a wide range of activities aimed at supporting Australians during perilous times.
Woolworth's decision has won the approval of the Shop Distributive and Allied Employees Association (SDA) union. Hopefully, this generosity will help blot out the media and economic damage done by the wage underpayment scandal earlier in the year. Unfortunately, this saw Woolworths lose around AUD400 million and net profit fell 7.7 per cent after the company had to repay 5700 underpaid salaried staff over a period of 9 years. However, this time had seen Woolworths in a good position prior to the scandal. The SDA and Fair Work Ombudsmen shared opinions that workers had lost trust in the company.
The decision to include staff as shareholders will cement the value Woolworth places on their team. Even the recent casual team members who are ineligible for receiving the stock will receive a 10 per cent discount until December. Full-time staff will also be receiving a $250 Woolworths reward card, and casual staff can expect a $100 gift card. Investors can be reassured that the funds for the team reward program are being drawn from reserves built into the budget for team-related rewards. Due to Tax Office requirements, these stocks will be unable to be sold for 3 years unless the staff member ends their contract with Woolworths.
By Timothy Geldard
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