In another sign of the growing pressure from Walmart workers and their allies, Walmart announced in its annual proxy statement (a report filed with the SEC in advance of the annual shareholders meeting) yesterday that two long-time board members would be stepping down. The two board members are former Walmart CEO Lee Scott, Jr. and independent board member and Audit Committee chairman Christopher Williams.
Environmental activists from the Institute for Local Self-Reliance and Environmental Action published a piece in the Huffington Post this week on the current state of Walmart’s environmental efforts, nine years after then-CEO Lee Scott proclaimed that the world’s largest retailer would become a leader on sustainability. An excerpt:
Big news today for Walmart director Tim Flynn, who also sits on the board of JPMorgan: JPMorgan and four regulators announced a settlement on the London Whale matter in which the company will pay $920 million in fines and acknowledge misconduct by company management.
It got overshadowed in the press coverage of the company’s disappointing same-store sales figures, weak traffic, and downward revision of guidance for the rest of the year, but Walmart reported yesterday that it spent about $82 million in the second quarter on FCPA and compliance matters—12 percent more than it spent in the first quarter and well above its projection of $65-70 million. Add that to the $230 million the company spent in Fiscal Year 2013 and the first quarter of Fiscal Year 2014, and the total reported spending to date on FCPA-related matters is $312 million.
Before the shareholder meeting, WMTS reviewed how some large public pension funds and proxy advisors were voting their shares for the different Board of Director candidates. Well, the results are in, and Directors Christopher Williams, Mike Duke and Rob Walton, yet again tallied high “no” votes. In an effort to shed some light on why large institutional investors voted against various director candidates, WMTS has looked into the reasoning of the two large public pension funds—Wisconsin (SWIB) and California (CalPERS). Both are among the largest public pension funds in the world with CalPERS ranking 6th and SWIB in 30th place, both with assets in the billions.
No one is expecting the election for Walmart directors to be a nail biter. What with the Walton family controlling more than 50 percent of the votes, you’d be foolish to bet against their reelection. However, how the non-Walton shares are voted will be revealing. Will the no-votes this year will be as large as last year when Lee Scott, Chris Williams, Mike Duke, and Rob Walton garnered the most no votes? The early numbers are starting to come in and it doesn’t look good for those four again this year. The NYC Pension Funds announced yesterday that it will vote its 5.1 million shares of Walmart stock against nine of Walmart’s 14 directors. NYC is casting its vote against Messieurs Scott, Williams, Duke, and Walton, as well as voting no on Directors Aida Alvarez, James Cash, Douglas Daft, Steven Reinemund, and Linda Wolf. CalSTRS is voting against all directors standing for election. Add to that the recommendations of two proxy advisers, ISS and Glass Lewis, who are each advising clients to vote against select directors – ISS recommends voting against Duke, Walton and Williams, while Glass Lewis is suggesting no votes against Duke, Williams, Scott, Alvarez, and Cash – and it could be another year of record no votes.
After the Walmart annual meeting in June, three of the company’s directors will be stepping down from their positions. The exit of Jim Breyer, Michele Burns, and Arne Sorenson will leave Walmart’s Board of Directors will be even weaker and more compromised than it already was.
Following the revelation of the bribery scandal last spring, several large Walmart shareholders voiced concerns about Walmart’s governance. New York City Comptroller John Liu, a trustee for the NYC Pension Funds, announced the Fund’s decision to vote against re-electing Walmart directors who were implicated in the bribery scandal. He stated:
We know it’s only Wednesday, but it’s already been a busy enough week for the Waltons that we thought a roundup was in order:
Top Walmart executives and the Board of Directors faced a sharp rebuke from shareholders when votes were counted after Walmart’s Annual Shareholders Meeting, held last Friday in Fayetteville, Arkansas. According to the Associated Press, many of the company’s directors up for re-election, including CEO Mike Duke, Chairman and Walton heir Rob Walton, former CEO H. Lee Scott and Audit Committee chair Chris Williams, received unprecedentedly high rates of disapproval from shareholders.