Wal-Mart fights back at proxy firm
Thursday, May 29, 2014
NEW YORK (AP) — Wal-Mart, the world's largest retailer, fired back at a prominent proxy advisory firm that critiqued the company's executive pay plan and how it's handled an overseas bribery probe.
Institutional Shareholder Services earlier this week urged shareholders to vote against Wal-Mart's executive compensation package and asked them to back a resolution for the appointment of an independent chairman.
It also recommended shareholders vote against the re-election of board members Robson Walton, the company's chairman, and Mike Duke, recently Wal-Mart's CEO. The ISS cited the failure of the board to provide more information to shareholders about specific findings of an investigation into bribery outside of the United States.
Those issues go to a vote at the company's shareholder meeting June 6. The meeting will be held in Fayetteville, Arkansas, about 30 miles from the company's headquarters in Bentonville.
In a filing with the Securities and Exchange Commission Thursday, Wal-Mart said that the ISS analysis "misconstrues the nature and operation of Wal-Mart's executive compensation program."
Wal-Mart said the ISS analysis is based on information provided by CtW Investment Group, a union-backed organization that has a long history of opposition to Wal-Mart.
ISS cited changes that it believes have diminished the consistency of performance goals set for company executives.
Wal-Mart said its pay structure emphasizes performance and is "intended to closely align the interests of our named executive officers with the interests of our shareholders."
Wal-Mart pointed out that because the company's fiscal 2014 performance was worse than expected, Duke, who stepped down as CEO earlier this year, was paid about $1.5 million less. It also said that the bonus paid to Doug McMillon, who succeeded Duke, was nearly $520,000 less.
Wal-Mart said that ISS's request for disclosure of "specific findings" in regard to possible violations of the Foreign Corrupt Practices Act, which can include bribery, is "contrary to the best interests of the company" because such a disclosure could interfere with the ongoing investigations.
Wal-Mart said that that type of disclosure could also "adversely affect the company's position in any current or future legal proceedings."
Allegations first surfaced two years ago that Wal-Mart failed to notify law enforcement that company officials authorized millions of dollars in bribes in Mexico to speed up building permits and gain other favors. Wal-Mart has been working with government officials in the U.S. and Mexico on that investigation.
With the shareholders meeting a week away, a union-backed group called OUR Wal-Mart, which started three years ago and includes former and current members of Wal-Mart, will stage protests at 20 cities around the country. The protesters will be Wal-Mart workers who are pushing for higher pay and protesting what it calls retaliation against employees who speak out against the company.
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