On his first day of work at Wal-Mart, Doug McMillon reportedly rear-ended his boss's car. Luckily for him, the incident, when he was just 17 and starting a job at a Wal-Mart distribution center, wasn't an ill portent for his career there.
Three decades after he drove into that parking lot, McMillon is serving as Wal-Mart's CEO and says he will add his massive company to the list of retailers raising their internal wages above the federally required minimum. The announcement came on Thursday after increasing pressure by activists and labor organizers.
Among other changes, McMillon plans to boost the pay of its U.S. workers to at least $9 an hour by April and $10 an hour by February of next year, moves that the company says will affect some 500,000 employees. He also announced the launch of a training program to help employees prepare for careers with Wal-Mart.
That part of the announcement may particularly resonate for McMillon, who was named CEO a little over a year ago after spending nearly his entire career with the company. Like Wal-Mart, McMillon is an Arkansas native. He worked early on as an assistant manager and a buyer for the retailer. More recently, he led the company's international operations and, before that, its Sam's Club unit. A bona fide insider, McMillon's folksy Southern charm was said to make him popular with the Walton family.
Yet despite his long-time insider status, McMillon is also something of a fresh face for Wal-Mart. At just 48, he is the youngest chief executive to lead the company since Sam Walton founded it. He ran the company's international business, where much of its growth has come from, and didn't join the board of its Mexico unit until after the company's alleged violations of the Foreign Corrupt Practices Act. He's been known for stressing technology to improve the experience for shoppers, and spent part of the company's giant annual meeting taking selfies with employees.
As a former colleague described him to the Financial Times, “He’s got high standards for people that work with him or around him. He’s got a very low tolerance for people who make errors – and that is a Walmart thing. He'll allow you to fail once. You don't want to make the same mistake twice."
McMillon is also known for his competitive streak and closely studies his industry peers. Just after he was named CEO last year, he reportedly asked his executive team to read The Everything Store, a book about how Jeff Bezos (who also owns The Washington Post) built Amazon. That assignment reflects the urgent and experimental approach McMillon has taken to managing the company during his short tenure, pushing for new store concepts and more e-commerce as the retailing landscape continues to shift dramatically.
Wal-Mart has rebounded recently — its quarterly results reported Thursday showed rising store traffic and profits that beat expectations — but had been struggling the last two years with sluggish sales.
Thursday's announcement about wages isn't a complete surprise. McMillon had hinted before that the company would be raising the pay of its lowest-rung workers. However, it does signal a willingness to depart from Wal-Mart's traditional stance, despite his long tenure inside the organization.
The company has said only about 6,000 of its 1.3 million U.S. employees currently make the minimum wage, though many more still make below the $10-per-hour rate that will go into effect next year.
It's worth keeping in mind that small raises tend to have only small impacts for many low-wage workers. Still, if it has a ripple effect on pay at other retailers, and prevents further government regulation on the minimum wage, McMillon's call could have a big impact among employers in the industry.