Wal-Mart Shareholders Urge Exposure of Allocation by Race & Gender

Inequity in Equities?
Wal-Mart Shareholders Urge Exposure of Allocation by Race & Gender

Which Wal-Mart employees get stock options? At the Wal-Mart annual Meeting on June 2 in Fayetteville, Arkansas, shareholder Dr. Martha Burk will ask this question.

A Responsible Wealth shareholder resolution that got over 15% of the vote last year - unusually high at a company with so much stock closely held by family members and management - will once again come to a vote, asking the company to disclose the race and gender composition of those receiving stock options and restricted stock. The resolution is online at http://www.responsiblewealth.org/shareholder/2006/WalMart.html

Dr. Burk, past chair of the National Council of Women's Organizations (NCWO) and now director of the organization's Corporate Accountability Project, is best known for leading the effort to open the Augusta National Golf Club to women. Last year she dared CEO Lee Scott, the Board of Directors and fellow shareholders to "break new ground" in the spirit of Sam Walton. She will be available for interviews on the day of the meeting on her cell phone, 202-247-1300.

"We applaud Wal-Mart for its recent decision to release the company's EEO-1 information to the public. The information we seek on stock options through our resolution is every bit as important in determining whether the company is being fair to women and minority men. We think Sam Walton would have agreed, and we urge Wal-Mart management to honor his legacy with the disclosure we are asking for," Dr. Burk will say at the meeting.

According to the 2006 proxy statement, 18.2% of options awarded went to the five highest paid officers, who make up 0.00028% of the company's employees. Four of the five are white men.

"The map of stock option distribution will reveal who holds the real power within Wal-Mart and whom the company values," says Robin Leeds of Responsible Wealth, board member of United for A Fair Economy, who served in the Clinton administration's White House Office on Women's Initiatives and Outreach. She will attend the Wal-Mart meeting with the proxy of Responsible Wealth member Judge Richard E. Tuttle. She will be available for interviews on the day of the meeting on her cell phone, 202-744-2283.

Wal-Mart's opposition statement contends that producing this report is entirely unnecessary because the company's appointed committees - Compensation, Nominating and Governance Committee (CNGC) and the Stock Option Committee (SOC) - are successful in meeting the company's diversity goals. The currently in-force Management Incentive Plan states that an officer's annual incentive payment could have been reduced by up to 15 percent for not meeting diversity goals. In fiscal year 2006, the annual proxy statement says that no Executive Officer's incentive payment was reduced.

In response, Ms. Leeds rebuts, "The CNGC is made up of Douglas N. Daft (white), John D. Opie (white), Jose H. Villareal (Latino), Linda S. Wolf (white woman), while the SOC is made up of David D. Glass (white), H. Lee Scott, Jr. (white), and S. Robson Walton (white). You can look at their pictures on WalMart's own website. Now, do you think employees and shareholders have enough reasons to question the results produced by these directors?"

"In light of increased public scrutiny of and lawsuits against Wal-Mart, I believe that our proposal for a report will help management and owners determine whether there's a glass ceiling in employee equity compensation, and thus help prevent potential liabilities down the road," claims Dr. Burk.

"We're simply advocating for what many large U.S. companies are already doing - distributing options broadly among employees," says Ms. Leeds. "Wealth generated from these option gains has allowed employees - hard-working people who are powerful contributors to the company's success - to fund a family member's college education, make a down payment on a house, provide for an enhanced retirement or establish a reserve pool for emergencies."

Responsible Wealth (http://www.responsiblewealth.org) is a national network of affluent Americans who are concerned about deepening economic inequality and advocate widespread prosperity.