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Wal-Mart Investor Ire Could Cloud Annual Meeting

Friday, 01 June 2012 08:23 AM EDT

Growing concern over the past actions of Wal-Mart Stores Inc. executives and board members threatens to cast a pall over the world's largest retailer's annual shareholder meeting and 50th anniversary party on Friday.

Large investors and a scrappy group of employee shareholders are calling for the removal of leaders such as Wal-Mart's chief executive officer and its chairman from the board for their alleged connection to a bribery scandal in Mexico.

"Wal-Mart has given us an opportunity, with the Mexico bribery scandal, to pick up a head of steam," said Jackie Goebel, 60, a company employee for two decades.

Goebel belongs to a group called Organization United for Respect at Walmart, which is backed by groups including a major grocery union and has spent the last couple of days encouraging stockholders to vote against several directors.

While some people are using the bribery scandal to reignite public debate about Wal-Mart's business practices, "we haven't seen that it has had any kind of meaningful impact on the way our shoppers or others look at the company," Leslie Dach, executive vice president of corporate affairs, told reporters on Thursday afternoon.

Before the meeting is set to begin at 7 a.m. local time in Fayetteville, Arkansas, Wal-Mart woke up the crowd with a band playing songs such as Kool & The Gang's "Celebration."

Later, celebrities such as Justin Timberlake will be on stage in front of thousands of employees and shareholders.



Wal-Mart has repeatedly said that it would not comment on the specific allegations until investigations are complete.

A New York Times investigation reported in April said management at Wal-Mart de Mexico, or Walmex, allegedly orchestrated bribes of $24 million to help it grow quickly and that Wal-Mart's top brass tried to cover it up.

The U.S. Department of Justice, the U.S. Securities and Exchange Commission and government agencies in Mexico are investigating the allegations. Wal-Mart is also conducting an internal probe.

Some shareholders believe that current board members, including Chairman Robson "Rob" Walton, CEO Mike Duke and former CEO Lee Scott, knew about the Mexico bribery and should have taken corrective action years ago.

Several large U.S. public pension funds, including the California Public Employees' Retirement System, already have signaled plans to vote against certain board members.

The vote is likely to be only symbolic since the family of Wal-Mart founder Sam Walton controls roughly half of the retailer's 3.4 billion shares.

But that has not daunted change-seeking shareholders.

"If at first you don't succeed, try, try again," said Carlton Smith, 51, who works in a Paramount, California, store and owns Wal-Mart stock. "We'll be back."

At Friday's meeting, Goebel also will introduce a shareholder proposal that calls on Wal-Mart to analyze and report the details of its executive compensation plan.

Wal-Mart's annual meetings are part business and part entertainment, typically including surprise appearances and performances by celebrities.

Some 14,000 employees and shareholders are expected to attend what is normally a raucous event, complete with cheering sessions, in the Bud Walton arena named after James "Bud" Walton, who helped pay for the basketball facility's construction and was Wal-Mart founder Sam Walton's brother. But this year's meeting looks likely to have its serious moments, too.

© 2024 Thomson/Reuters. All rights reserved.

Friday, 01 June 2012 08:23 AM
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