Wal-Mart Fires Back at Proxy Adviser Over Pay, Bribery Criticism

Wal-Mart Stores Inc. (WMT), responding to criticism from Institutional Shareholder Services Inc. over executive compensation and its handling of a foreign-bribery probe, said the firm is wrong and relying on faulty analysis.

After ISS recommended voting against Wal-Mart’s compensation plan at its June 6 shareholder meeting, the retailer said today that the firm’s analysis “misconstrues the nature and operation” of the pay program. Wal-Mart blamed ISS’s reliance on information from CtW Investment Group, a union-backed organization that is rallying shareholders to vote against the compensation proposal in the nonbinding vote.

“Wal-Mart’s executive compensation program emphasizes performance,” the Bentonville, Arkansas-based company said in a filing. “Our financial performance during fiscal 2014 was below our expectations at the beginning of the fiscal year, and our executives’ pay for fiscal 2014 reflected that performance.”

The bonus of Michael Duke, who was chief executive officer until February and remains a director, was lowered by about $1.5 million, Wal-Mart said. Doug McMillon, the current CEO, saw his bonus trimmed by almost $520,000.

Wal-Mart also took issue with ISS’s recommendation to vote against re-electing Duke and Chairman Rob Walton to the board because of a lack of information on the company’s Foreign Corrupt Practices Act probe. Providing “specific findings” of the investigation, as requested by ISS, could interfere and distract from ongoing probes and hurt the company’s future legal position, Wal-Mart said.

To contact the reporter on this story: Nick Turner in New York at nturner7@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net James Callan

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