Employee Pay and Benefits

REI is a co-op and we bring those values into how we treat our employees. As a result, we serve and support our employees through programs that demonstrate our respect for them and allow them to professionally and personally thrive.

REI's comprehensive benefits and pay packages include several features unique in the retail industry. For a complete overview of the employee benefits package visit REI.com/jobs. Some of our benefits program features include:

Health Care Coverage for All—REI provides unprecedented, subsidized health insurance to all employees, regardless of the hours worked, through our Part-Time Healthcare (PaTH) program. This is in addition to the extensive health care coverage we provide employees who work an average of 20 hours or more each week. In 2008, approximately 1,200 part-time teammates were covered under PaTH. The program is exceptional in the retail industry; most companies do not offer or subsidize coverage for their part-time employees.

Vacation and sick benefits for part-time employees—REI recognizes the value that part-time employees contribute to the co-op. We have a long history of extending benefits to our part-time staff, and in 2008, we began providing more generous part-time vacation accruals, based on years of service. Through this effort we extended improved sick and vacation time benefits to about 1,000 additional part-time team members.

Financial incentives—REI employees receive financial incentives based on the success of the co-op. In 2008, REI funded more than $5.7 million in incentives for eligible full- and part-time employees. Since this program was introduced in 2001, more than $102 million in incentive pay has been distributed to employees.

Retirement and Profit Sharing—REI believes that those who create the co-op's success deserve to share in the financial results of their hard work. Despite a challenging environment, in early 2009 REI distributed more than $15 million to co-op employees through our retirement and profit sharing plan. Eligible employees received a 10 percent contribution to their plan, whether they contributed to it themselves or not. This amount far exceeds the retail industry norm of 3 percent and represents full funding of a 5 percent discretionary company contribution under the profit sharing plan, along with the 5 percent guaranteed contribution to each eligible employee's retirement account.

Gear and apparel discounts—REI has a very generous discount program to support and encourage employees to get outside and try our products. Year-round, employees enjoy discounts such as 50 percent off full retail price on REI-branded gear and apparel, a 30 percent discount on REI Adventures trips and all other branded products we sell, free gear rentals, and a lifetime 30 percent discount after 25 years of service to REI.

Employee wellness–REI offers programs to help employees improve and maintain their lifestyle. Employees (and dependants) who are enrolled in our health plans have free access to the Quit for Life™ tobacco cessation or Mind & Body™ Program (New 2008) weight management programs. Throughout the curriculum, participants have the guidance of a personal health coach and access to a website full of helpful tips, discussion boards, and progress trackers. We also make available Healthy Lifestyle Dollars to benefit-eligible employees who currently practice healthy behaviors to help reduce their healthcare contributions. More than 75 percent of eligible employees qualify for Healthy Lifestyle dollars to offset their healthcare premiums.

Challenges

One of the greatest challenges that employers currently face is balancing the need to provide a strong benefits package in the midst of a difficult economic environment. The increasing cost of healthcare alone makes this an especially difficult task.

Another challenge facing retailers is the need to adapt to the economic realities confronting consumers. While the co-op has weathered the weakened economy relatively well, REI has not been immune to the effects of smaller wallets and more frugal shoppers.

In light of the business slowdown in the final months of 2008, REI announced the elimination of 61 full-time jobs in February 2009. The positions, less than 2 percent of our full-time workforce, were primarily located in our headquarters, and the Sumner, WA distribution center. In addition, a number of part-time, hourly positions were eliminated on a store-by-store basis in about half of the company's 105 retail stores and in the Sumner distribution center.

Full-time employees who departed REI were given transition support – including severance pay, outplacement assistance, and access for two years to REI's Employee Assistance Program.

Additional steps to manage REI's expense management plans included deferring raises for headquarters and management staff (reinstituted June 28, 2009) hiring only critical staff positions, and delaying or eliminating selected projects and programs.

Looking Forward

Throughout 2009, REI will take actions to remain in a strong financial position while continuing to provide attractive benefits and a supportive work environment to our employees. In the weeks and months ahead, REI will continue looking for ways to reduce our healthcare costs while simultaneously promoting and encouraging ways for our employees to boost their wellness levels and well being.