Walmart announces key management shifts with McKenna retirement

Judith McKenna, CEO of Walmart International, plans to depart the retailer at year-end, with Sam’s Club CEO Kath McLay to be the International CEO effective Sept. 11. Walmart U.S. COO Christopher Nicholas will be the next Sam’s Club CEO.

Walmart made the executive changes via a Form 8 filing with the U.S. Securities and Exchange Commission on Wednesday (Aug. 16), one day before it reports second-quarter earnings. Walmart CEO Doug McMillon also announced the executive changes in an internal e-mail.

McMillon praised McKenna’s contributions to Walmart over the past 27 years. McKenna, 57, spent the majority of her time at Walmart abroad working in different roles, including chief financial officer of Asda, the former retailer subsidiary in the United Kingdom. She was recruited to the U.S. by McMillon to work with former Walmart U.S. CEO Greg Foran, also new to the U.S. McKenna served as chief operating officer under Foran from 2015 to 2018. She was promoted to Walmart International president in 2018.

McMillon said when he first met McKenna, he was struck by her “combination of intelligence and heart.” He credited McKenna with helping transform Walmart into an omnichannel business, where she played a role in strengthening the Walmart U.S. business, shaping the e-commerce offering and digital transformation by leading the online grocery pickup business.

“She prioritized our store associates. She listened carefully and acted quickly to make investments in compensation, launch Walmart Academies, introduce new technology for our store managers and make other changes that strengthened the core of the business,” McMillon said in the memo obtained by Talk Business & Politics.

McKenna will receive payments totaling $2.3 million paid over the next two years after her retirement date. Walmart said the company will also accelerate the vesting of 6,153 shares of restricted stock held in her retirement account. She will forfeit the remaining unvested equity awards. The agreement also prohibits McKenna from seeking employment with a competitor for two years.

McMillon said Walmart is extremely grateful for everything McKenna has done, noting that she and the team have re-architected the international segment and led a multi-year transformation that resulted in International delivering more growth and stronger financial results across the board.

“Judith will remain with the company until Jan. 31, 2024, to help ensure a smooth transition and to continue serving on our Walmex, Flipkart and PhonePe Boards,” McMillon noted.

McLay, 49, first joined Walmart in 2016 from Australian retailer Woolworth’s Limited. McLay worked to improve the efficiency of Walmart’s supply chain during her first four years with the company. She managed Neighborhood Markets for about a year before her promotion to lead Sam’s Club as CEO in late 2019. McMillon said the depth of leadership McLay has provided Walmart makes her a great choice to lead the international segment.

“As CEO of Sam’s Club U.S., she and our team delivered 12 straight quarters of double-digit sales growth. She prioritized a member-centric culture, the improvement of our merchandise quality and an expansion of our omnichannel capabilities. … She’ll do a phenomenal job leading our International business,” McMillon noted in the email.

McLay signed a new employment agreement on Aug. 15 for an annual salary of $1 million for the remainder of the fiscal year ending Feb. 1, 2024. Her target annual cash incentive opportunity will remain 180% of her base salary, with a maximum possible payout of 225% of her base salary. McLay will continue to be eligible to receive an annual equity award, generally consisting of a combination of performance-based restricted stock units and restricted stock, with a value of approximately $10,000,000. The company generally grants annual equity awards to executive officers in January of each year, according to the SEC filing.

Nicholas, 46, has been with Walmart since 2018, working in the company’s international segment as chief financial officer before working under Walmart U.S. CEO John Furner as chief operating officer since October 2021. As CEO of Sam’s Club, he will report directly to McMillon.

Nicholas signed an amended contract agreement for a base salary of $850,000 and continued cash incentive payments between 180% and 225% of his base salary. Nicholas will continue to be eligible to receive an annual equity award, generally consisting of a combination of performance-based restricted stock units and restricted stock, with a value of approximately $7 million.

Furner said Nicholas helped Walmart U.S. improve customer service over the past two years. He also worked to improve supply chain operations.

“He has operated in seven countries and served in roles from merchandising, operations, strategy and finance. He’s deeply grounded in our purpose and commitment to to service and continuous improvement,” Furner said in a separate memo on Aug. 16.

In that same memo, Furner announced Kieran Shannahan will take over as chief operating officer for Walmart U.S. on Sept. 11. He is coming from Walmart’s international division and has spent 25 years with the retail giant where he worked in food, health and wellness, e-commerce in Canada. United Kingdom, Africa, and Chile, in addition to Sam’s Club.