Wal-Mart votes show rise in dissatisfaction

Published 5:00 am Tuesday, June 5, 2012

Shareholders voting at last week’s annual meeting registered significantly higher dissatisfaction with Wal-Mart compared to last year, according to the company’s vote tally released Monday.

H. Lee Scott Jr., the former chief executive, received 15.6 percent “no” votes this year, while three others — including Michael Duke, the chief executive, and the chairman, S. Robson Walton — received about 13 percent “no” votes.

Last year, no director received more than 2 percent “no” votes. Every director comes up for re-election each year.

The founding Walton family controls almost half of the shares in the company, and the stock ownership of executives and board members pushes the inside control to slightly over 50 percent. So there is no way for outside investors to get a majority on their own.

Still, the share of negative votes was particularly loud for Wal-Mart. It means that almost one-third of Wal-Mart’s public investors — those that do not work at the company or sit on its board — did not support the current chief executive and some other board members.

Last year, on average, each director was elected with only about 0.7 percent opposition votes; this year, each director received, on average, more than 5 percent “no” votes.

In April, The New York Times reported that executives at the company’s Bentonville, Ark., headquarters received credible evidence about bribery allegations in 2005 and 2006 at its Mexican subsidiary but shut down an internal investigation into it.

Scott was then the chief executive of the company, Walton was chairman and Duke was the head of international operations. The Times reported that Duke and Scott both knew about the bribery allegations. The Department of Justice and the Securities and Exchange Commission are now looking into the matter, and Wal-Mart is conducting its own internal investigation.

David Tovar, Wal-Mart spokesman, said in an email that an independent board committee nominated the directors and that “obviously a substantial majority of our shareholders supported their election.”

The Wal-Mart shareholders’ meeting on Friday was a lively four-hour session, with celebrities and tales of founder Sam Walton’s thrift largely overshadowing concerns over the bribery investigation.

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