Wal-Mart’s shareholder meeting follows the script

Updated: 2013-06-08T02:03:31Z


The New York Times

— F There were two Wal-Marts on display at the company’s shareholder meeting Friday: the one Wal-Mart presented, and the one some investors and activists were complaining about.

Wal-Mart, in what appeared to be an attempt to counter employee and union complaints about thin staffing and low wages, centered the meeting on extolling the value of its employees. That message was interspersed with the usual parade of celebrity and spectacle: Hugh Jackman, Tom Cruise, Kelly Clarkson, Jennifer Hudson, dancers and a giant puppet of a white elephant.

While Wal-Mart’s stock price remains close to an all-time high, its results in the most recent quarter missed analyst expectations. Sales at stores open at least a year, a key measure, declined in the United States for the first time since summer 2011, while costs in the international unit were higher than expected.

Its stock price got some help Friday from news that the company authorized a $15 billion stock buyback, replacing the 2011 authorization for a $15 billion buyback, of which about $712 million remained. Shares were up 1.2 percent.

As is common for Wal-Mart at these meetings, executives barely made mention of recent controversies, including issues of employee staffing and the Bangladesh factory collapse that killed more than 1,100 workers where Wal-Mart was shown to be producing garments. In addition, there is still the continuing investigation into potential violations of the Foreign Corrupt Practices Act in Mexico and other countries after The New York Times reported last year that company officials at Wal-Mart de Mexico bribed officials to ease expansion in that country, and executives at headquarters were told of the bribery and declined to take action.

But that did not mean those issues did not come up.

During the brief portion of the meeting where shareholders could present proposals, critiques were strong.

One presenter asked why Wal-Mart had not joined European retailers in a pact to improve safety standards in Bangladesh.

“The last six months have seen two of the worst disasters in the entire history of the garment industry,” said Kalpona Akter, a union activist in Bangladesh, referring to the Rana Plaza collapse and the Tazreen fire. “Both occurred in buildings where Wal-Mart goods were produced.

“Don’t you agree that the factories where Wal-Mart products are made should be safe for the workers?” she said.

Wal-Mart says it did not have any production in the Rana Plaza factory at the time of the collapse.

A shareholder and employee, Janet Sparks, who works at a Wal-Mart in Baker, La., pushed the company on its pay and scheduling policies.

“Times are tough for many Wal-Mart associates, too. We are stretching our paychecks to pay our bills and support our families,” said Sparks, a member of the union-affiliated employee group Our Wal-Mart.

Referring to chief executive Michael T. Duke’s $20.7 million in 2012 pay, she said that given the low wages that store employees receive, “with all due respect, I don’t think that’s right.”

There were cheers and applause from the crowd, a response that could be considered significant because the employees selected to attend the annual meeting are generally big Wal-Mart supporters.

Other investors raised concerns about the financial and reputational fallout from the Mexico inquiry, and whether Wal-Mart had a good handle on its supply chain given what occurred in Bangladesh.

As expected, none of the shareholders’ proposals passed. The founding Walton family owns more than 50 percent of shares, making it impossible to pass any measures without their support. Likewise, despite opposition from some large pension funds and proxy advisory firms, all 14 directors up for re-election were reinstated. Wal-Mart said it would release a detailed breakdown of the votes on Monday, which would signal how dissatisfied outside investors are with the company and board.

Yet the part of the meeting where investors could speak amounted to about 15 minutes of an almost four-hour meeting.

The rest of it was devoted to Wal-Mart’s version of its story.

The head of human resources was one of the first to speak, telling employees, “We’re here to celebrate each and every one of you.” Later, another human resources executive took the stage, along with William S. Simon, the chief executive of Wal-Mart U.S., as they promoted two employees to assistant managers in front of the crowd of 14,000.

Even the celebrities were on message.

In one of the odder moments, Tom Cruise, looking dashing in a sharp suit and tie, took the stage not to entertain, but to rehash Wal-Mart talking points about sustainability and promoting women. (Cruise, like the other celebrities, was not paid for his appearance.)

“Wal-Mart has served as a model for how business can address some of the biggest issues facing our world,” Cruise said.

Executives briefly nodded at the Mexico bribery inquiry, telling the crowd that Wal-Mart remained committed to acting with integrity.

And Duke, one of the executives who had been apprised of the bribery scheme after it occurred, according to reporting in The Times, had the crowd applaud a Chilean employee who had recently declined to take a bribe from a vendor.

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