Shareholders Fight Secrecy At Walmart, Support Transparency On Clawbacks For
38% of independent shareholders call for disclosure of clawbacks amidst
allegations of wrongdoing at Walmart
DETROIT, June 13, 2014
DETROIT, June 13, 2014 /PRNewswire/ -- Shareholders are tired of Walmart's
secrets when it comes to holding executives accountable for ethical
misconduct. Thirty-eight percent (38%) of independent shareholders voting at
Walmart's annual meeting on June 6 voted to require the company to disclose
annually whether Walmart clawed back pay from its senior executives for
breaking laws and causing significant financial and reputational harm. The 38%
percent vote is a significant jump from 32% in 2013 when the proposal was
first voted on. This increase signals a growing lack of confidence in the
board of directors' independence and performance according to members of the
global investor coalition behind the proposal, Request for Annual Report on
Recoupment of Executive Pay.
"The rise in the vote reflects growing frustration among investors that the
board refuses to commit to being transparent about whether or not executives
were held accountable for breaking the law," said Meredith Miller, chief
corporate governance officer for the UAW Retiree Medical Benefits Trust,
co-filer of the proposal. "Walmart has a pay recoupment policy but stonewalls
revealing its use. Shareholders are telling Walmart to stop the secrecy."
The investor coalition filed the proposal in light of a global bribery and
corruption scandal that has cost Walmart over $492 million to date – including
over $100 million to expand its global compliance program – and prompted
investigations by the U.S. Department of Justice and the Securities and
Exchange Commission. The company also recently pled guilty and paid over $110
million in connection with federal and state charges of illegally dumping
hazardous waste in California and Missouri.
"Independent Walmart shareholders continue to push for Walmart to be
transparent in holding its executives accountable for costly compliance
problems," said William Atwood, executive director of the Illinois State Board
of Investment, a co-filer. "Disclosing pay recoupment is a concept important
enough that Halliburton, Northrop Grumman, United Technologies, and McKesson
Corporation already have policies allowing for these disclosures."
Further foot dragging on claw back disclosure by Walmart's leadership will be
closely watched by independent shareholders. The fact that insider
shareholders including family members own over half of the company's
outstanding shares and are only likely to adopt a disclosure policy with the
recommendation of management does not deter proponents of transparency.
"For Walmart to improve its short-term financial performance and sustain
long-term shareholder value, it is essential for the Board to step up its
management of risk," said Connecticut State Treasurer Denise L. Nappier.
"Among other high-profile misadventures, Walmart recently was charged with
illegally threatening and punishing workers protesting for better pay and
working conditions. Directors of Walmart would do well to better link
executive pay with ethical behavior – as other companies, including United
Technologies, Lockheed Martin and Capital One, have done. Improving
transparency and accountability only adds to a company's long-term
The 38% vote on claw backs reflects investors' desire to get a policy in place
now, before claims are settled for the various allegations that have
accumulated rapidly in recent years according to Miller.
"Last week's vote is a clear referendum to the board that investors do not
want to guess anymore each year about whether the compensation committee has
taken action one way or the other in holding senior executives accountable for
corporate losses and reputational harm."
Coalition members and filers of the proposal include: UAW Retiree Medical
Benefits Trust; Illinois State Board of Investment; Connecticut Retirement
Plans and Trust Funds; Amalgamated Bank LongView Funds; and F&CManagement
Ltd. Collectively, the coalition owned over 2.6 million Walmart shares as of
market close on May 15, 2014.
* * *
The $56 billion UAW Retiree Medical Benefits Trust is the largest
non-governmental payor of retiree health care benefits in the United States,
providing health care benefits to over 760,000 UAW retirees and dependents.
The Illinois State Board of Investment, a $14.5 billion fund, has fiduciary
responsibility for managing the pension assets of the General Assembly
Retirement System, the Judges' Retirement System of Illinois and the State
Employees' Retirement System of Illinois.
SOURCE UAW Retiree Medical Benefits Trust
Contact: Patricia McCarthy, UAW Retiree Medical Benefits Trust, C: (313)
418-4155, or O: (313) 882-9200, email@example.com
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