McMillon to succeed Duke as Wal-Mart CEO

The world’s largest retailer will have a changing of the guard early next year as CEO Mike Duke announces his retirement to be succeeded by 47-year-old Doug McMillon.

The anticipated CEO change has made headlines in recent months, and Wal-Mart’s Board of Directors made it official on Monday (Nov. 25). McMillon will be the CEO effective Feb. 1, 2014. (See the video of the announcement from Wal-Mart at the end of this story.)

A Jonesboro native and University of Arkansas graduate, McMillon will be the youngest to ascend to CEO since founder Sam Walton, who was 44 when the first Wal-Mart was built in Rogers. McMillon is the CEO of Walmart International. The company said it will announce McMillon’s successor by the end of the fiscal year. David Cheesewright, who oversees retail operations in Europe, Africa, Canada and the Middle East, is expected by many Wal-Mart watchers to succeed McMillon.

The company said Duke will retire Jan. 31 after serving five years in the CEO role. He will be 64 in December and has reigned over Wal-Mart during one of the retailer’s most fruitful periods for investors.

"This leadership change comes at a time of strength and growth at Walmart," Rob Walton, chairman of the Wal-Mart Board said in a statement. "The company has the right strategy to serve the changing customer around the world, and Doug has been actively involved in this process. The company has a strong management team to execute that strategy." 

The retail giant has flourished under Duke’s leadership approaching a half trillion dollars in total annual revenue, a record stock price set earlier this year growing market cap by $70 billion since he took the helm in February 2009.

Analysts and insiders have predicted Duke would retire after the end of this year, capping off 19 years of leadership at Wal-Mart and some 44 years in retail. As an engineer, some of Duke’s earlier contributions at Wal-Mart include the redesign of the logistics and merchandising systems.

Last year Duke earned a total of $20.7 million, up from $18.1 million a year earlier. The higher pay was a combination of a 4% rise in annual salary and a fatter bonus based on improving sales.

Duke received a base salary of $1.3 million and stock awards of $13.6 million. His performance-based cash bonus jumped to $4.4 million up from $2.9 million, according the filing.

Other compensation totaled $644,450, the perks included $101,947 for the use of the company aircraft.

"This is a great company and it has been an honor to help advance Sam Walton's vision of giving people around the world a better life," Duke said in the statement. "Our associates make it all possible and I've learned so much from them. No matter where I traveled, our associates continued to inspire me with their commitment to living our values, serving our customers and taking care of each other."

According to Wal-Mart, Duke will remain as board chairman and as chairman of the executive committee of the board. Duke will also stay on as an advisor to McMillon for one year.

MCMILLON’S TIME
“Many have believed for several years that Doug McMillon would one day assume the CEO role, I guess now his time,” said Alan Ellstrand, UA professor with expertise in corporate management and governance.

He said given McMillon’s age, he is set up to serve out what could be a decade in this role, like both Lee Scott and David Glass.

McMillon has served as CEO and president of Walmart International since 2009. During that period, he has overseen the operations of more than 6,100 stores and some 823,000 employees in 26 countries outside the U.S.

For the past 18 months, McMillon has dealt with ongoing investigations regarding alleged violations of the Foreign Corrupt Practices Act and also undertaken a complete overhaul of the retailers own internal controls against corruption in the future.

“That experience is huge for McMillon and he also has been schooled in the corporate culture having worked his way through the ranks and previously serving as CEO of Sam’s Club,” Ellstrand said.

During McMillon’s oversight, Walmart International has grown annual sales by 38.8% between fiscal years 2010 and 2013. Through half of fiscal 2014 annual sales rose 2.9% from the same period last year.

MCMILLON HISTORY
From 2006 to February 2009 McMillon served as CEO and president of Sam’s Club, an operating segment of Wal-Mart, with sales of more than $46 billion during his tenure.

Like Walton, McMillon majored in business and spent the early part of his career in merchandising. Analysts have said McMillon has the expertise and charisma to move the company forward while also being faithful to the culture he was schooled with under the tutelage of Walton and Glass.

In 1984, McMillon began his career with the company as a summer associate in a Walmart Distribution Center. In 1990, while pursuing his master degree, he rejoined the company in a Tulsa, Okla., Walmart store.

He serves on the board of directors of the U.S. China Business Council as well as Dean’s Advisory Board for the Walton College of Business at the UA. He is also a board member for Crystal Bridges Museum of American Art.

Last year McMillon earned $9.563 million, down from $10.96 million in the prior year, challenging global growth was cited for the decline in his performance income.