Pay for Wal-Mart CEO rises despite lower fiscal year revenue, earnings

Wal-Mart Stores failed to report higher net income in fiscal 2016 and sales revenue slipped for the first time in 45 years, but that didn’t curb compensation for CEO Doug McMillon and a few other top executives.

Base pay increased across the board, but bonus pay was reduced for executives tied to U.S. store and Sam’s Club financial results last year. Wal-Mart Stores’ full fiscal year revenue fell 0.7% to $482.13 billion, with net income of $14.694 billion down 9.2% compared to fiscal year 2015.

McMillon earned a base salary of $1.263 million last year, of which he chose to defer $130,000, according the retailer’s annual Proxy filing with the Securities and Exchange Commission on Wednesday (April 20).  McMillon’s base pay included a 5.18% raise from a year ago.

The board of directors at Wal-Mart have moved in recent years toward performance-based earnings tied directly to the company’s sales, operating income and return on income. Last year, 75.4% of McMillon’s overall compensation was performance based.

McMillon’s total compensation of $19.808 million, rose 2.08% from the $19.392 million earned in the prior year. Total compensation included cash bonuses dubbed as non-equity performance pay totaling $3.406 million in fiscal 2016. A year ago, McMillon’s cash bonus was $2.878 million. The company said McMillon’s bonus pay is based on total company financial results, with 75% weighted on operating income and 25% on company sales. Last year McMillon received 83.7% of his targeted bonus pay.

His stock awards totaled $14.27 million last year, down from $14.597 million in the prior year. His pension compensation was $404,775, up from $322,359 in the previous year. Other perks included $15,900 in matching 401(k) contributions, $113,738 for use of the company aircraft and $328,899 in contributions to the company’s deferred compensation plan.

The board noted in the filing that top exec earnings were below targeted levels in 2016 given the company’s inability to reach the expectations set earlier in the year.

Brett Biggs, who took over as chief financial officer in 2016, earned base salary of $623,126, with total compensation of $8.613 million. Charles Holley, who retired from that role last year earned $3.006 million in fiscal 2016.

Greg Foran, CEO of Walmart U.S., earned a base salary $976,334 compared to $846,910 in the prior year. His performance-based pay was 76.46% of target and was based upon total company operational performance (50%) while U.S. sales and U.S. operating income comprise the other 50% of the weighting. Foran’s stock and cash incentives totaled $9.526 million last year, roughly half of the $17.054 million he received in the prior year. When factoring in Foran’s other compensation his total pay for 2016 was $11.544 million, down from $19.535 million in the prior year, which included higher stock awards, substantial relocation allowances and tax equalization payments.

David Cheesewright, CEO of Walmart International, earned a base salary of $1.033 million, down slightly from the $1.152 million, he earned in his first year on the job. Cheesewright received a special individual performance bonus of $500,949 last year. His other stock and cash bonus pay totaled $8.351 million, up from $8.101 million the year before. His total compensation in fiscal 2016 was $10.171 million, down slightly from $10.665 million in 2015. Cheesewright’s use of company aircraft was valued at $188,184 in 2016.

Rosalind Brewer, CEO of Sam’s Club, earned a base salary of $931,202 last year, up from $893,819 in 2015. Her overall compensation totaled $8.454 million, which was down from $9.56 million in the prior year period. Her performance stock and cash bonus awards totaled $7.382 million last year, down from $8.409 million in 2015. Brewer’s bonus pay was 81.86% of the target payout and was 50% of total company operating income and the other 50% split between Sam’s Club operating income and sales.

Neil Ashe, CEO of Walmart Global eCommerce, earned a base salary of $1 million, a raise of 6.92% year-over-year. Ashe has the third highest base salary among the top execs behind McMillon and Cheesewright. His total compensation for fiscal 2016 was $10.831 million, up from $9.436 million in the prior year. Ashe’s performance pay was equal to 85.76% of the target set for him.

His performance pay included stock awards of $7.499 million, up from $6.648 million in the prior year. Cash awards increased to $2.072 million from $1.618 million.