Wal-Mart Executives Stress Integrity At Shareholders Meeting

Some 14,000 shareholders managed to give Wal-Mart one heck of a 50th birthday celebration Friday (June 1) despite the threat of protests.

The historical event was a balance of old and new with a common theme of “integrity” woven in each presentation.

Board chairman and founder’s son Robson Walton emerged on stage promptly at 7 a.m., standing in front of a set displaying downtown Bentonville and an historical image of Walton’s 5-10 store on the Bentonville square.

He welcomed his brother Jim and sister Alice to join him in front of their family store.

“We cut our teeth in this store,” Robson Walton said as he bantered back and forth with his siblings about who did the most work in the family business.

Robson said it was hauling in freight. Younger brother Jim argues it was shining the floors to his older brother Rob’s satisfaction. Baby sister Alice claims she did all the dusting of the fine china dolls and was paid handsomely in-kind with these fine collectibles — chipped of course.

THE NEXT PLATEAU
In all seriousness, Robson told the crowd that even though the company has grown to be the largest retailer in the world, his dad was never one to measure success by financial standards.

“The secret to Wal-Mart’s success are its people around the world,” he said.

Robson said his dad would be pleased with what the company has attained, but his restless nature would have him striving toward the next plateau.

“He would say there is no trust without transparency and urge us to improve our compliance, challenge us to win with e-commerce, move forward on sustainability and have the humility to change what needed to be changed,” the chairman said.

He warned ahead of the financial meeting that there may be protests, but there were no boos or heckles from the capacity crowd.

Charles Holley, chief financial officer, had just shared the best news shareholders have heard in several years with respect to a recent 12-year high in share price. Since last year’s shareholder meeting, the stock price has risen from $53.66 to $65.40 on Friday.

For the first time in three years, all of Wal-Mart’s operating units showed positive growth, which has also helped to push the share price higher.

‘INTEGRITY IS NOT NEGOTIABLE’
Walton publicly discussed the ongoing investigation launched seven months ago into allegations of bribery and cover-up in its Mexican subsidiary.

He said an independent investigation will go where the facts lead them.

“Integrity is not negotiable. We will do the right thing, the right way. You have my word,” Walton promised shareholders.

Three proposals brought by shareholders were voted down at Friday’s meeting, but shareholders rallied around Jackie Goebel, an associate for 24 years and investor for 20 years.

Goebel asked the board to consider revamping its executive compensation with respect to how bonuses are calculated.

Goebel drew cheers from the crowd when she said management should listen to their associates like Sam Walton modeled.

“The cuts have gone too far, our stores are understaffed and we can’t provide the kind of service we should,” she said.

More cheers rang out when she mentioned the alleged breach in the company’s core ethics saying it has been an embarrassing distraction to associates worldwide. The proposal Goebel brought, along with two others, were defeated. The exact voting percentages will be made available next week.

Walton said there was a 92% voting quorum casting ballots Friday. The Walton family controls 47% of the total 3.4 billion outstanding shares.

All 16 directors nominated were elected to one-year terms.

INTEGRITY CALL ‘RINGS HOLLOW’
New York City Comptroller John Liu has been one of the more outspoken critics seeking to oust Duke and others linked to the investigation. The NYC Pension funds hold 5.6 million shares of Wal-Mart shares.

“Wal-Mart’s promise that integrity is central to its business rings hollow,” Comptroller Liu said following the meeting. “The NYC Pension Funds heard the same empty reassurances years ago when the board failed to act on our repeated concerns over Wal-Mart’s lack of internal controls and compliance with its own policies and claims to high standards of ethics.”

He urged the board to demonstrate by its actions, not rhetoric, that it is responsive to shareholders and looking out for our interests.

CEO Mike Duke spoke near the end of the meeting again reinforcing the “integrity” theme.

“You can’t build a company of our size over a 50-year period, during so much change in the world, on a weak foundation,” Duke said. “It requires bedrock that runs deep, building blocks that stay strong and mortar that binds it all together. The values that built Walmart … will drive our success and make us proud for the next 50 years.”

DUKE’S REVIEW
Wal-Mart paid tribute to an employee from Lebanon, Mo., named Valeda. She is the company’s first associate to reach a 50-year service milestone.

When Duke asked Valeda what kind of job he was doing, she answered, “Alright, for now.”

Duke concluded with the comparison of the 25 associates in a store of 35,000 square-feet in 1962, bearing the name Wal-Mart. Just 50 years later the company is on five continents in 27 countries with more than 10,000 stores, 2 million employees, 200 million weekly customer visits and a billion square feet of space.

He said no one can truly envision what the retail world will look like in 50 years, but if Wal-Mart stays true to the foundation that Sam Walton built, it will be a better, stronger and prouder company able to help more families save money and live better.

Kim Souza with our content partner, The City Wire, is the author of this report. She can be reached by email at [email protected].

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