Amidst the backdrop of a major bribery scandal in Mexico, Wal-Mart will hold its annual shareholders' meeting in northwest Arkansas later this week.
It will be the retail giant's 50th anniversary, a cause for celebration.
But there will be plenty of shareholders not in a celebratory mood, as Kim Souza with our content partner, The City Wire, reports.
Three large institutional shareholders are calling for new board leadership in the wake of the Mexican bribery affair.
In addition, three influential proxy advisement firms — Egan Jones, Glass Lewis & Co. and ISS — also recently encouraged their large client bases to vote out Duke and Scott, among others, when they cast their ballots this week.
The potential fallout from these combined initiatives at best are likely to serve as protests, given that 1.7 billion votes would be needed to outvote the family’s holdings — near 50% of the total 3.4 billion shares.
It would take about 26% of votes by minority stakeholders against the board, outside the family control, to demonstrate a vote of no confidence, according to Paul Hodgson, senior associate at governance research firm GMI Ratings.
Glass Lewis disagrees and recently released the following statement: “We believe that these directors, in their current or f
ormer positions as executives with direct responsibilities relating to the matters, should have been aware of the credible threat of widespread bribery involving the company's Mexican subsidiary and acted more proactively to full investigate and resolve the claims.”
Marek Fuchs, former Wall Street analyst and author, notes the Wal-Mart issue may draw some fireworks, but it is the wrong time and wrong place for a shareholder protest to effect much change.
He said Wal-Mart shares are doing well, trading near their 12-year high and the scandal, as it were – doling out bribes for land use in foreign territories – is too commonplace to stand out and sustain outrage.
He said without the family’s nod of approval little change can come through a shareholder vote, but that doesn’t keep minority shareholders from trying.
Souza also examines the shareholder proposals that have been offered for consideration — three from the board and three from outside the board.
In addition to the company's 50th anniversary, it will also recognize the 20th anniversary of founder Sam Walton's death.
You can access her full report here.