For the first time in decades Walmart held a no-frill shareholder meeting to conduct the formal business of electing directors and approving shareholder proposals.
Appearing much like the annual meetings of J.B. Hunt Transport and Tyson Foods, in a long room with a few dozen chairs partially filled by shareholders, the event was held at the John Q. Hammons Convention Center in Rogers at 10 a.m. Wednesday (May 30) and lasted a total of 20 minutes.
The board, including President and CEO Doug McMillon, sat at the front of the room. There was no entertainment but the company presented a short video to begin the meeting that highlighted some of the accomplishments from the previous year.
Board Chairman Greg Penner called the meeting to order at 10:02 a.m and said the new meeting format was about being more efficient with time, a practice also used by the board and the retail giant. Penner said the board has optimized the number of director seats to be more nimble in decision-making, and said seven of the 11 directors are deemed independent.
Shareholders elected all 11 candidates to the board for a term of one year. New to the board this year are Steve Easterbrook, CEO of McDonald’s, who was not present for the meeting. Sarah Friar, CEO of Square, was elected for the first time following appointment to a partial-year term. Steve Reinemund, former CEO of PepsiCo, was re-elected to the board, but was not present at Wednesday’s meeting.
Tom Horton, retired CEO of American Airlines, was named lead director as Dr. James Cash is exiting the board. Kevin Systrom, founder of Instagram, also exited the board to focus more on his growing company. Penner thanked Systrom for his technology leadership during his board service at Walmart. The other directors elected by a majority vote were Penner, McMillon, Tim Flynn, Carla Harris, Marissa Mayer, Rob Walton and Steuart Walton.
Shareholders also approved the ratification of Ernst & Young as the company’s independent auditor, as well as the advisory vote to approve executive compensation for top earners at Walmart. The proposal allows the board to oversee the performance-based pay scale used by Walmart management.
There were three shareholder proposals presented that were not supported by the Walmart Board and management. One proposal sought appointment of an independent director, another sought a report that explores racial and ethnic pay gaps, and the third asked to realign share repurchases to match share for share investments into the Associate Stock Purchase Plan. The third proposal was presented by two Walmart employees on behalf of Our Walmart supported by the United Food and Commercial Workers Labor Union.
Two of the presenters were Walmart employees who claimed they are part-time but seek full-time work. Ariana Smith from Barstow, Calif., said she brings home less than $200 a week and wants to work full-time but store management continues to hire more part-time. Her request for a report on pay gap alleges managers at the store level are disproportionately white and male. The other employee said she is a Haitian immigrant who also works part-time earning $11 per hour. She said the board should use the $20 billion earmarked for share repurchases to instead boost worker pay to $15.
“No offense to the Walton family, but you don’t need more money,” the Our Walmart representative said.
None of the three shareholder proposals passed according to the preliminary vote count, according to Penner. The official results will be reported this week and filed with federal regulators. The Walton family controls roughly 50% of the voting of the stock, which classifies Walmart Inc. a controlled company.
McMillon spoke briefly at the meeting recapping last year’s financial performance which included a record $500 billion in sales revenue and the highest comp sales growth in nine years. He said Walmart will continue to manage the business to deliver results in a changing world by saving people money and time, streamlining the shopping experience using technology, improving the back-end of the store using technology while also operating with discipline. He said Walmart is on a mission to be the world’s most-trusted retailer.
“We want customers to feel good about shopping at Walmart and our associates must feel proud to work here,” McMillon said.
The retailer held a brief question and answer session with shareholders in a separate room. The media was not allowed to attend. Shareholders were given the opportunity to go into the room and voice concerns directly with a company representative. This has previously taken place immediately after the shareholder meeting on Friday. The new format allowed shareholders to ask their question in a one-on-one setting. In the previous format, shareholders were called on to ask questions before other investors.