Proxy Blog

Walmart

May 10, 2018

The annual proxy for this retailer had the following proposals: 

  1. Proforma votes on directors, appointment of auditors, and “say-on-pay” advisory vote 
  2. Shareholder proposals on:
    -Independent chair
    -Racial or ethnic pay gaps 

Magni voted as follows: 

  1. Magni voted for and against proforma proposals. 
  • For all except one director. The board has a majority of independent directors and some have CEO/CFO experience with other companies. The compensation of directors is disclosed with a meaningful portion in equity where the equity has restrictions to align director incentives with long-term value creation. The compensation levels are set using a benchmarking process.Only one Walton needs to be on the board, so Magni voted against Stuart Walton. 
  • For auditors. There appear to be no controversies with the financial statements of the company. 
  • Against “Say-on-pay” proposal. The proxy disclosures were perfunctory. Key missing disclosures included explanations of major contract clauses and data used in benchmarking compensation. 

Magni voted for and against shareholder proposals. 

  1. For independent chair – Generally having an independent director as board chair is a good idea, though there are instances where a combined CEO and Chairman make sense, especially in companies at an early stage. Walmart is sufficiently mature to separate the roles. 
  2. Against racial or ethnic pay gaps – The justification for the proposal was mainly a regurgitation of Economic Policy Institute generic information along with a diatribe about involuntary part-time work. Walmart has received numerous awards for its diversity and inclusion practices. The proposal appears primarily designed to push a political point.