Mike Duke Stepping Down As Wal-Mart CEO, Doug McMillon To Succeed (UPDATED)

Wal-Mart Stores, Inc. today announced that its board of directors elected Doug McMillon, 47, to succeed Mike Duke, 63, as president and CEO, effective February 1, 2014.

McMillon was also elected to the company’s board of directors, effective immediately.

“This leadership change comes at a time of strength and growth at Walmart,” said Rob Walton, chairman of Walmart’s board of directors. “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.”

“Doug is uniquely positioned to lead our growing global company and to serve the changing customer, while remaining true to our culture and values. He has broad experience – with successful senior leadership roles in all of Walmart’s business segments – and a deep understanding of the economic, social and technological trends shaping our world. A merchant at heart, Doug has both a long history with our company and a keen sense of where our customers globally are heading next. He has also shown strong leadership on environmental sustainability and a commitment to using Walmart’s size and scale to make a difference in the lives of people, wherever they might be,” Walton added.

In September, Talk Business’ content partner, The City Wire, reported that Wal-Mart insiders were gearing up for a change in the retail giant’s top leadership post.

Many consultants believed the next CEO of Wal-Mart would be one who is well-versed in the retailer’s global business interests.

McMillon has run the international division for more than three years, the last 18 months dealing head-on with investigations surrounding allegations of violations of the Foreign Corruption Practices Act and rolling out better internal controls against corruption in the future.

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.

“The opportunity to lead Walmart is a great privilege,” McMillon said. “Our company has a rich history of delivering value to customers across the globe and, as their needs grow and change, we will be there to serve them. Our management team is talented and experienced, and our strategy gives me confidence that our future is bright. By keeping our promise to customers, we will drive shareholder value, create opportunity for our associates and grow our business.”

“Mike put in place the building blocks for the next generation Walmart and today the company is stronger, more global and more unified across all our stores, mobile and online,” said Walton. “He also reinvigorated the productivity loop and delivered strong financial performance. During his tenure the company made critical investments in talent and technology to expand Walmart to even more customers globally and stepped up its progress on social and environmental issues. Mike also has a strong commitment to diversity, and has been especially engaged in advancing women throughout organization. He set a tone at the top to never be satisfied, to always accelerate and do better, while remaining true to the culture that has been core to the company’s success.”

Duke’s departure makes his stint as CEO – just five years – one of the shortest but most fruitful for investors. Wal-Mart 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.

“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,” said Duke. “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.”

Duke will continue serving as chairman of the executive committee of the board and, in the tradition of his predecessors, stay on as an advisor to McMillon for one year. The company plans to make an announcement on McMillon’s successor as CEO of Walmart International by the end of the fiscal year.

McMILLON HISTORY
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.

“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.

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

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.

Editor’s note: Kim Souza with our content partner, The City Wire, contributed to this report.