Walmart Executive Compensation Overview: Simple, but Powerful Benefits
- Mark Chisenhall, CFA
- Jul 16
- 5 min read
Updated: Oct 21
Walmart and Sam's Club Executives receive a strong, but simple compensation package that includes Restricted Stock (RSUs) and Performance Share Units (PSUs), the Walmart Deferred Compensation Matching Plan (DCMP) and a 401(k) Plan.
While it lacks a few offerings such as Profit Sharing & Restoration Plans and Mega Backdoor Roths, the simplicity is typically a net positive.
Instead of juggling dozens of complex plan options, executives really only need to make decisions on a few key areas: Equity Compensation and the DCMP. Get those right, and you’re in a strong position.
Let's quickly review Walmart's Equity Comp Plan, Deferred Comp Plan and the financial planning opportunities within each.
Walmart Equity Compensation: RSUs and PSUs
The Walmart Equity Compensation structure is simple and consists of Restricted Stock Units (RSUs) and Performance Share Units (PSUs).
Restricted Stock Units: Grants are typically awarded once per year in the Spring and vest monthly or quarterly over 3 or 4 years. You pay ordinary income taxes on this income when the shares vest, not when they are awarded.
Performance Share Units: PSUs are awarded to Officers, and the amount varies based on a set of performance metrics. The PSUs are on a 3-year cliff vesting schedule, so 100% of the award vests at once. For newly promoted officers, two annual grants are awarded that vest in Year 1 and Year 2.
Planning Opportunities for Equity Compensation
Cash Flow & Taxes: Using cash flow from equity to allow you to contribute more salary or MIP to tax-advantaged accounts such as the 401(k), HSA and DCMP.
Diversify: If you prefer not to hold a concentrated position in Walmart stock, consider liquidating and diversifying soon after shares vest. Below is a sample equity allocation. Perhaps with a little guidance, anyone can implement this on their own with low-cost index funds - no need to pay for an investment manager:
Tax Withholding: Walmart’s default withholding on equity compensation is 22% (up to $1M), which is often lower than an executive’s actual tax rate. To avoid a surprise tax bill, you can increase your withholding directly in Fidelity NetBenefits.
Want more details on the Walmart Equity Comp Plan - see the archived articles below:
Walmart Deferred Compensation Matching Plan (DCMP)
The Walmart DCMP is a Non-Qualified Deferred Compensation Plan offered to Walmart Executives. It allows you to defer taxable income until a future date - ideally trading a high tax rate for a lower one.
Who is Eligible: Walmart Officers are eligible to defer up to 100% of their MIP and 80% of Base Salary to the Walmart DCMP. Sr. Directors and Group Directors are eligible to contribute up to 80% of MIP, no salary.
Match: Walmart contributes a 6% match on eligible compensation—defined as Base Salary + MIP above the IRS compensation limit ($350,000 in 2025).
Distributions: At enrollment, participants choose to receive payouts either as a lump sum or annual installments once they separate from Walmart.
Planning Opportunities for the Walmart DCMP
Tax Savings: Many executives are in the highest tax bracket of their careers (up to 37%). Deferring income today and receiving it in retirement—when rates may fall into the 10–20% range—can significantly reduce lifetime taxes.
Get the 6% Match: It is worth considering contributing enough to the Walmart DCMP to receive the full DCMP match. But be mindful of the IRS limit for that year ($350K in 2025) which impacts your 401(k) match. Sometimes the tax savings are more than the match depending on your situation.
Want more details on the Walmart DCMP - see the archived articles below:
Walmart 401(K) Plan
The Walmart 401(k) is a simple but solid plan, offering a 6% match—one of the highest in the retail industry. While it doesn’t have all the bells and whistles of some corporate plans, it provides a strong foundation for long-term retirement savings.
Two key points often come up in conversations with executives:
Prioritize the 401(k): Max out the 401(k) before turning to the DCMP—or any investment product being pitched to you. It’s tax-advantaged, Walmart pays you to contribute, and the plan offers low-cost index funds. Surprisingly, I’m often asked if the 401(k) is “worth it.” The answer: absolutely.
Roth vs. Pre-Tax: Many Sr. Directors I meet are still contributing to the Roth 401(k). While Roth can make sense early in your career, once you’re in the higher tax brackets, the pre-tax 401(k) typically provides greater long-term benefit.
The Walmart 401(k) is straightforward; set it up correctly, and in most cases, you can “set it and forget it.”
Want more details on the Walmart 401(k) Plan - see the archived articles below:
Wrap-Up
Overall, Walmart’s executive compensation package is strong, simple, and competitive. While the Deferred Compensation and 401(k) Plans lack some of the flexibility (e.g., customized distribution schedules) or functionality (e.g., Mega Backdoor Roth) found at other Fortune 500 companies, those omissions are relatively minor. For most executives, the simplicity is a net positive.
Taurus Financial Planning provides financial planning guidance to corporate professionals for a flat, fixed fee - no commission-based products, no pressure to hand over your investments. If you'd like to learn more about this Financial Planning approach and see if it could help you, you can check out the service model and pricing via the link below.
Thanks for Reading,
Mark Chisenhall, CFA
Taurus Financial Planning is a Flat-Fee financial planning firm based in Bentonville, AR. The firm offers comprehensive financial planning, tax planning and investment guidance to corporate executives across the country.
Taurus Financial Planning is a Registered Investment Advisor with the State of Arkansas. This information is provided as a guide to assist you in your financial planning. The specific examples are provided for illustration purposes only and are not representative of specific investments or guarantees of future returns. Please consult with a professional for specific questions regarding your particular situation. If there is any error or inconsistency between this document and the official company plan documents, your company plan documents will govern.
This publication is for informational purposes only and is not intended as tax, accounting or legal advice or as an offer or solicitation of an offer to buy or sell or as an endorsement of any company security fund or other securities or non securities offering. This publication should not be relied upon as the sole factor in an investment making decision. Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any recommendations made by the Author, in the future, will be profitable or equal the performance noted in this publication.
