No surprises at Walmart’s annual shareholders meeting

Walmart held its 51st annual shareholders meeting on Wednesday (June 2), the second year for the virtual-only format. Chairman Greg Penner opened the meeting at 10:32 a.m., applauding president and CEO Doug McMillon and the roughly 2 million Walmart employees for their accomplishments during the pandemic.

Walmart had plenty to celebrate behind a banner year of record sales totaling nearly $560 billion, up more than $40 billion from the prior year. In addition, operating income rose to $36 billion, and online sales increased from 7.6% of total sales a year ago to 12% of sales for the fiscal year ending Feb. 1.

McMillon told shareholders the business is strong, and Walmart has the assets and people to ensure its forward growth trajectory. He said the world looks different from just a year ago, but Walmart’s priorities remain constant. He said ensuring the health and wellness of employees, keeping the supply chain moving and advancing the company’s long-term strategies for success behind the flywheel business model are all fundamental to the company.

While the U.S. is recovering from the COVID-19 pandemic, McMillon said that in areas like India, Canada and Latin America, the struggle continues. He said Walmart is dedicated to helping its businesses in those regions with financial support, providing oxygen and personal protective equipment (PPE) where needed.

In the U.S., McMillon said Walmart encourages its employees to get vaccinated and recently added a $75 cash incentive to those who do. However, he said the company would not make vaccinations mandatory.

Walmart also remains committed to racial justice and equity and said 95% of the company officers had taken part in a two-day diversity workshop training. In addition, he said the company had awarded $14.3 million in grants through its Center for Racial Equity, which the retailer announced a year ago with a $100 million commitment.

McMillon said there is more work to do. Still, he’s been encouraged by the kindness, courage, and generosity seen among employees amid the past year’s pandemic and social justice uprisings.

“Our people continue to rise to any occasion,” he said.

Rachel Brand, corporate secretary at Walmart, ran the business portion of the meeting. First, she announced the 12 directors slated for election: Chairman Greg Penner, Tom Horton, Doug McMillon, Tim Flynn, Steve Reinemund, Sarah Friar, Steuart Walton, Carla Harris, Cesar Conde, Marissa Mayer, Rob Walton and board newcomer Randall Stephenson. Shareholders did approve the slate of 12 directors to a one-year term.

In its proxy filing with the Securities and Exchange Commission, Walmart noted that the median age of its board is 56 years. The median tenure is 7.5 years and there is also a 12-year term limit, except for Walton heirs. Rob Walton has been on the board since 1978. Penner, married to Carrie Walton, has been on the board since 2008.

Steve Reinemund, a former chairman and CEO of PepsiCo, joined the board in 2010 and is the longest-serving member other than Walton family members.

Walmart said five nominees had been appointed in the past five years, three of whom are women or ethnically diverse. Walmart also said eight of the 12 directors are independent, and 11 are non-management. Shareholders also approved two other proposals noted in the proxy: the ratification of Ernst & Young as the company’s independent accountant and the approval of the executive compensation plan.

Industry groups read four other proposals seeking changes in policy and more transparency. They ranged from refrigerants released from Walmart operations, as noted in Proposal No. 4., read by Randall Rice, to Rhode Island employees’ retirement plans. Rice said Walmart should issue a report detailing how it plans to limit the impact on climate change by increasing the scale and rigor of its plans to reduce refrigerants released from its operations.

Walmart said it has a track record of reducing emissions and is making progress against those goals to achieve zero emissions by 2040. Refrigerants are part of the plan. Kathleen McLaughlin, chief sustainability officer at Walmart, said that the company is transitioning to low global warming refrigerants during the question and answer portion of the meeting. She also said Walmart’s refrigerant leaks are less than half the supermarket average in the U.S.

Walmart was against Proposal No. 4 of and it was defeated by shareholders.

Shareholders also defeated proposals 5-8, and Walmart did not support any of them. For example, proposal No. 8 called for McMillon to step down as chairman of the Business Roundtable, an association of CEOs of the United States’ leading companies. The proposal argued that McMillon’s involvement conflicts with his ability to serve shareholders, customers, employees, supply chain partners and communities where Walmart operates.

Walmart’s company proxy, which is available online, spelled out its opposition to the four proposals. The company made election results public at this link. The shareholders meeting is also being archived on the Walmart investor website.