Retail giant Walmart, which last week announced plans to link executive compensation to compliance amid a bribery investigation, is facing a proxy showdown over greater disclosure with a coalition of investors boasting a combined $300 bn in assets under management.
The coalition, led by the UAW Retiree Medical Benefits Trust, is demanding the company disclose whether any Walmart executives have pay clawbacks for causing ‘significant financial’ harm to the company. The request will be considered at Walmart’s June 7 annual shareholder meeting.
‘To date, Walmart has not committed to disclosing any actual clawbacks to its shareholders,’ says Meredith Miller, chief corporate governance officer of UAW, in a press release. ‘The coalition’s proposal asks Walmart to disclose if and when its existing clawback and recoupment policies are actually used. The disclosure requirements would apply to senior executives covered under one or more of the company’s policies.’
In filing its proxy statement last week, Walmart said it plans to link executive compensation to compliance for the fiscal year 2014, and that CEO Michael Duke has also voluntarily agreed to a compliance-linked compensation review for the fiscal year 2013. The proposal would link annual bonuses for named executive officers and ‘certain’ other executive officers to evaluations that seek to determine whether compliance objectives are being met.
The announcement comes as the company faces an investigation by the SEC and the US Department of Justice into alleged bribery by company officials. Walmart says it spent $157 mn last year on an ongoing internal investigation into allegations that Walmart officials paid bribes to help store expansion in Mexico, as well as other allegations regarding bribes paid in China, Brazil and India. The investigation began in 2011 after the New York Times first reported the allegations.
‘The investor coalition views disclosure by Walmart of the use of its clawback policies as critical to fostering a corporate culture that emphasizes compliance and ethics,’ continues the UAW press release. ‘By asking Walmart’s board to tell investors whether, in fact, it has used the clawback, investors are calling on the directors to be accountable to Walmart’s owners on important compliance issues.’
The coalition comprises seven investors besides the UAW trust, including the Connecticut Retirement Plans and Trust Funds, Amalgamated Bank LongView Funds, the First Swedish National Pension Fund, F&C Management and the Illinois State Board of Investments.
