I am delighted to announce that Kalpona Akter, a former garment worker from Bangladesh who is the executive director of the Bangladesh Center for Worker Solidarity, will have access to the floor of the WalMart ($WMT) annual meeting on Friday, June 7 in Bentonville, Arkansas. She has been an outspoken critic of sweatshop conditions in Bangladesh where Wal-Mart is the second largest producer. Ironically, she will be presenting my proposal to allow shareowners to call a “special meeting.”
The November fire in the Tazreen garment factory, the collapse in April of the Rana Plaza and a second deadly fire on May 8th in a sweater factory in Dhaka resulted in the death of over 1,500, with at least another 1,000 seriously injured.
Walmart and the other large retailers hold the key to ending senseless deaths in garment factories throughout the world. Walmart must ensure good pay and safe working conditions for all workers in its supply chain from the factories to the warehouses to the stores… the conversation has changed and there is more attention than ever before on horrible labor conditions inside the factories that produce clothing for major global brands like Walmart. Unfortunately as other retailers start to take responsibility, Walmart and the Gap continue to turn a blind eye.
Unless WalMart takes serious action, I fear our company could suffer serious reputational damage. More important, we might see continued tragedies such as those that will be described by Ms. Akter. Concerned that human rights catastrophes like the April 24 collapse of the Rana Plaza in Bangladesh might recur if sweeping reforms aren’t promptly implemented, a global coalition of institutional investors is calling on apparel manufacturers and retailers to join the Accord on Fire and Building Safety.
The investor group included nearly 200 signatories, such as the publisher of Corporate Governance (James McRitchie), from 16 countries in North America, Europe and Australia with combined assets valued at over $1.5 trillion. The statement was drafted by the Interfaith Center on Corporate Responsibility along with Boston Common Asset Management, Domini Social Investments LLC, the Missionary Oblates of Mary Immaculate and Trillium Asset Management.
Special meetings allow shareowners to vote on important matters that can arise between annual meetings. The timing of shareowner input is especially important when events unfold quickly and issues may become moot by the next annual meeting. This proposal topic won more than 60% support at CVS, Sprint and Safeway. Proposal No. 5 is important to democracy at WalMart. For more on the agenda at WalMart’s annual meeting and my voting recommendations, see Wal-Mart Stores $WMT – Proxy Score 57.
Wal-Mart’s annual shareholder meeting will be live web-cast Friday, June 7 at 7:00 a.m. CT.
Proposal No. 5 Special Shareowner Meeting Right
RESOLVED: Shareowners ask our board to take the steps necessary unilaterally (to the fullest extent permitted by law) to amend our bylaws and each appropriate governing document to give holders of 10% of our outstanding common stock (or the lowest percentage permitted by law above 10%) the power to call a special shareowner meeting.
This includes that such bylaw and/or charter text will not have any exclusionary or prohibitive language in regard to calling a special meeting that apply only to shareowners but not to management and/or the board (to the fullest extent permitted by law). This proposal does not impact our board’s current power to call a special meeting.
Special meetings allow shareowners to vote on important matters, such as electing new directors that can arise between annual meetings. Shareowner input on the timing of shareowner meetings is especially important when events unfold quickly and issues may become moot by the next annual meeting. This proposal topic won more than 60% support at CVS, Sprint and Safeway.
This proposal should also be evaluated in the context of our Company’s overall corporate governance as reported in 2012:
GMI/The Corporate Library, an independent investment research firm, had rated our company “D” continuously since the first term of the Bush administration with “High Governance Risk.” Also “Concern” for our director’s qualifications and “High Concern” in Executive Pay -$20 million for Michael Duke.
Mr. Duke’s annual incentive pay relied on only one performance goal, operating income. A mix of performance goals is better, not just to prevent our executives from the temptation to game results, but to ensure that they do not take actions to achieve one goal that might ultimately damage another. Despite missing operating income targets Mr. Duke received $3 million in annual incentive pay.
Our highest paid executives continued to be given restricted stock that simply vested over time without job performance requirements. Equity pay should have job performance requirements to align with shareholder interest. These executives also were given a so-called long-term incentive of performance shares which were based on short-term results of 2-years. Our highest paid executives received the key to the corporate jet for their personal travel. Because such a perk is not tied to job performance, it is difficult to justify in terms of shareholder value.
Two directors were inside executives, another director was a former executive and two other directors were potentially-conflicted due to related party transactions (RPTs) with entities affiliated with Wal-Mart. Additionally, there are several other related party transactions involving Walton family members and Wal-Mart executives, that raised concerns regarding the effectiveness of our board in representing the interests of us, the minority shareholders.
In spite of the Walton family controlling 51 % of the vote, four directors received double-digits in negative votes: Lee Scott, Christopher Williams, CEO Michael Duke and Chairman Robson Walton. Please vote to protect shareholder value:
Special Shareowner Meeting Right – Proposal 5