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.
An analysis from Supply Chain Digest shows that the company’s share of U.S. retail sales has been on the decline for the past four years:
Many are probably asking “What’s Kremlinology?” The term refers to the art of deducing and guessing what is really happening within an organization based on observations and comes from the Cold War era. During that period, analysts had to rely upon what might seem like small things like the removal of an official portrait or where people were sitting during a meeting—which brings us to the Walmart management update.
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.
Following Walmart’s annual meeting, the company’s board of directors is officially less independent than it was a few weeks ago.
The final vote count from the Walmart annual meeting is in. With the Walton family owning a majority of company shares, the results were in effect pre-determined. (Spoiler alert: the vote went the way the Waltons wanted. And critics say the new board is weaker and less independent than the old one.) But like last year, the shareholder vote demonstrates considerable dissatisfaction with the company’s leadership, particularly audit committee chair Christopher Williams, CEO Mike Duke, and Chairman Rob Walton.
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.
That’s not us speaking, that’s Christian Brother Investment Services (CBIS). According to its website, CBIS invests more than $4 billion for more than 1,000 Catholic institutions worldwide. And CBIS has announced that it will be voting its shares against three Walmart Directors standing for election at this year’s annual meeting. Getting no votes are CEO Mike Duke, Chairman Rob Walton, and Audit Committee Chair Christopher Williams.
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.