Most bosses wouldn’t change the criteria for success if an employee was falling behind on the job. But that’s just what the Walmart board did for CEO Mike Duke, who earned $18.1 million in 2011. According to the company’s proxy statement, Duke’s pay would have been slashed by millions if Walmart hadn’t lowered the minimum requirement for the company’s overall return on investment (ROI).
That matters because the ROI is a key factor in how Walmart calculates Duke’s bonus, a major part of his overall compensation package. Pretty outrageous, right? Well, there is more. According to an article in the usually conservative New York Post, the Walmart board took other steps to help out Duke.
Last year, the board eliminated altogether the use of sales at stores open at least a year, or same-store sales, in favor of overall sales — a much easier goal to hit.
Until last fall, same-store sales had been dropping at Walmart for more than two years — while overall revenues gained.
“Comp-store sales are still a top priority for us,” Walmart spokesman Greg Rossiter told The Post. “But without a total sales approach, there’s less incentive to try to grow the business in new markets.”
It must be nice for Duke to have the Walmart board make things easier for him. However, they aren’t the only people who can hold Duke accountable. A group of Walmart workers who are also shareholders in the company are criticizing Duke’s bonus. They plan to introduce a resolution at the annual Walmart’s shareholder meeting in June that would reform how Walmart executives are compensated. Here’s more from the New York Post article:
Jackie Goebel, a 20-year Walmart employee in Kenosha, Wis., says she got a yearly bonus in 2007 of more than $1,100. With same-store sales in the dumps last year, her bonus this year was $41.18.
“Somebody had to tell me our bonuses were on our checks a couple of times,” Goebel told The Post. “They become so minute you don’t notice them.”
Goebel, who owns about 500 Walmart shares, has joined a handful of Walmart employees to demand changes in the board’s compensation policy.
That’s good news, since it is clear that the Walmart board is not particularly concerned with holding Duke’s feet to fire. But it’s vital that someone raise these issues, especially since his overall compensation of $18.1 million is particularly grotesque when compared to the average salary of a Walmart worker, which is just $8.81/hr. Based on that number, an associate would have to work more than 1,000 years to earn Duke’s pay in 2011.