Walmart’s first quarter earnings report from last week also revealed that costs related to the FCPA investigation continue to climb. The $73 million the company spent in the first quarter of the year brings the total reported spending on FCPA matters to $230 million, with no end in sight.
That amount might seem like pocket change to the Walton family, but to those of us who aren’t on the Forbes billionaires list, it’s a lot of money. With $230 million, you could give each of the 2.2 million Walmart associates worldwide a $100 bonus—and still have $10 million left over. Or Walmart could make $824,000 worth of safety and infrastructure improvements at each of the 279 factories it sources from in Bangladesh (you know, the sorts of upgrades that Walmart said were too costly?).
Walmart has also been more than a bit off on its estimates for these costs, raising concerns that the price tag could be even bigger than the company’s projections. In both the third and fourth quarters of last year, Walmart said it would spend $35 to 40 million, but they seriously underestimated—they spent $48 million in Q3 and $58 million in Q4. And in this first quarter, the company told investors to expect that it would spend between $40 and 45 million, but ended up actually spending $73 million.
Dollar figures in millions. No expense projections in Q1 2013 or Q2 2013.
At this rate, Walmart will soon be spending more than $1 million per day on FCPA matters. The company might manage to top Siemens, which spent $1 billion on its internal FCPA investigation and another $1.6 billion to the U.S. and German governments to settle its own bribery debacle.
How much do you think Walmart will actually spend on FCPA issues in the second quarter? Post your best guess in the comments.