Wal-Mart Reveals Coughlin’s ‘Obsession’

Wal-Mart Stores Inc. sued former Vice Chairman Tom Coughlin on July 27 in an attempt to void his multi-million dollar retirement package.

The suit, filed in Benton County Circuit Court, lists a variety of allegedly personal expenses that Coughlin billed to Wal-Mart or purchased with fraudulently obtained gift cards — from $714 for taxidermy of a wild boar with a rattlesnake in its mouth to $38 for Calvin Klein Obsession cologne and other items. The entire list of items totaled $223,709.

Page 4 of the 124-page lawsuit includes a Coughlin quote from the April 28, 2002, issue of the Cleveland Plain Dealer: “Anyone who is taking money from associates and shareholders ought to be shot. That greed will catch up to you.”

The suit asks for restitution of all cash, property and benefits Coughlin “wrongfully received” in addition to the $6.5 million the company paid him in bonuses during the seven years the alleged fraud took place. Wal-Mart previously rescinded Coughlin’s retirement package, which included $14 million in salary and forfeited restricted stock. Under Arkansas law, a company canceling a contract because of fraud can file a civil suit detailing the fraud in an attempt to recoup losses.

Coughlin announced on Dec. 6 that he would retire on Jan. 24 as the head of all U.S. Wal-Mart and Sam’s Club stores but remain on the company’s board until June 3.

But he resigned from the board on March 25 instead.

In a March 25 filing with the Securities and Exchange Commission, Wal-Mart said it requested Coughlin’s resignation because of a disagreement concerning gift card use and reimbursements valued between $100,000 and $500,000.

Wal-Mart froze Coughlin’s benefits in April. His retirement package included $1 million in salary for the next two years and the vesting of 186,407 shares, worth $9.77 million. Wal-Mart suspended pending further review of 302,503 stock options that are part of Coughlin’s direct holdings.

In a June 10 SEC filing, Wal-Mart said it fired Coughlin retroactively to Jan. 22 for “gross misconduct.” Wal-Mart claims Coughlin misspent the company’s money for seven years before retiring in January.

Through his lawyer, William W. Taylor III of Washington, D.C., Coughlin denied any wrongdoing, saying the money was “reimbursement” for “union activities.”

Wal-Mart referred the case to Bob Balfe, U.S. attorney for the Western District of Arkansas, who is conducting an investigation.

According to the lawsuit, Coughlin received $1 million in base salary and $9.9 million in benefits in fiscal 2004, which ended Jan. 31, 2004. In the most recent fiscal year, he received $1 million in salary and $3.1 million in benefits. He also received $2.8 million each year in incentive pay.

The lawsuit mentioned more than $20,000 worth of “fake transactions” for travel, meals and a $860 fishing rod that Coughlin filed as expenses. The suit also contained receipts for $36,000 for fake hunting leases in south Texas and $15,000 for hunting trips that never took place.

Coughlin’s Gift Card

The July 27 lawsuit lists $27,500 worth of Wal-Mart gift cards that Tom Coughlin allegedly obtained for personal use.

He apparently used much of that amount on hunting gear. But the itemized list also included:

$44.56 for a vacuum, men’s socks, boxers and a toilet seat

$23.24 for a tank top, shorts and a fishing rod rack

$209.85 for a “jade bangle”

$6.79 for hair spray and shaving gel

$14.39 for Dr. Scholl’s “XSupport” shoe inserts

$44.78 for Bloody Mary mix, a Star Wick top and other clothes

$386.73 for a Chris Farley DVD, rib eye steaks, sausage, other food items and lite beer

$231.77 for wine

$106.96 for a karaoke machine

$38.78 for cedar blocks and Calvin Klein Obsession cologne

$109.92 for sausage, chocolate glazed donuts, Bloody Mary mix, steak seasoning, Red Bull, 16-ounce Miller Lite, Shiner Bock beer and other items

$42.50 for fragrance and Fiber Choice

$31.62 for beef sticks and other items

$770.71 for a .82 carat round emerald

$24.97 for beef jerky, Tang and other items

$95.09 for swim trunks, shirts and sunglasses

$400 for food, wine, Corona beer, four cases of 12-ounce Bud Light, two 24-packs of cans of Bud Light and 48 bottles of 24-ounce Bud Light

$39.80 for mascara, a blush brush, foundation, lipstick and a DVD