FAYETTEVILLE, Ark.--(BUSINESS WIRE)--Sending a message to the Walmart heirs who control the company, a growing number of institutional investors, independent shareholders, analysts and advisors are raising concerns – and proposing changes – at Walmart’s annual shareholders meeting Friday. The actions come as Walmart reports falling sales for five consecutive quarters and the company reports losing up to $3 billion a year because of stocking problems. Additionally, the increase in consumer concerns around the treatment of Walmart workers and legal problems related to potential violations of the Foreign Corrupt Practices Act and federal labor laws have been factors motivating investors to vote for changes in leadership, governance and compliance.
A new poll of consumers, released by Lake Research Partners Friday, confirms that concerns about Walmart’s pay and treatment of workers are influencing shopping habits. According to the survey, 25% of Walmart’s most loyal customers are shopping there less because of the company’s treatment of workers. In addition, among the 27% of consumers who rarely or never shop at Walmart, 36% say it’s because of “poor treatment of workers,” and 26% say it’s because Walmart “pays workers too little.”
“Walmart’s reputation as a low-paying employer is becoming a growing problem for the company’s bottom-line,” Lake Research concludes. “The good news for Walmart is that over a quarter of consumers confirm that if Walmart’s treatment of workers improved, their likelihood of shopping at the retailer would increase.”
OUR Walmart, the three-year old organization of Walmart associates, has been raising concerns about the company’s illegal retaliation, low pay and erratic scheduling. The group is calling on CEO Doug McMillon to publicly commit to paying workers a minimum of $25,000 a year, putting an end to part-time and temporary work and ending the retaliation against workers who speak out. The group says the Walton heirs – America’s richest family – have led the company to a low point, defined by the hardship they are creating for working families, the inexcusable lack of oversight of its supply chain and alleged bribery and subsequent cover-up.
Speaking from the floor of the shareholders meeting on proposal #4, which calls for an independent chairman of the board, Walmart associate, shareholder and OUR Walmart member Charmaine Givens-Thomas pointed out the connections between staffing problems and customer service concerns:
“We do not have enough trained associates in our stores to keep our shelves stocked. Backrooms are piling up because there aren’t enough people to get things on the floor. So we struggle to deliver the customer service we pride ourselves on. And without excellent service, sales suffer. Our company must invest more in associates and give them the respect they deserve, so we can be even more productive, which benefits us as associates and shareholders. We need a leader at the top who thinks only of what is best for our company, its associates and all shareholders.”
Dr. Iva Carruthers, with the Congregation of Sisters of St. Agnes and Zevin Asset Management, will speak on proposal #6, which asks Walmart to provide a report on its lobbying expenditures. She plans to address the room questioning the company’s possible lobbying efforts around food stamp cuts and the minimum wage:
“As shareholders, customers, and citizens, we are concerned that Walmart may be putting money behind policies that harm our company’s image, threaten its bottom-line, and compromise the value of our shares. For example, some of Walmart’s sales come from food stamps used by both Walmart associates and customers. We need to know if our company’s lobbying efforts supported food stamp cuts that led to lower sales."
Walmart moms, some of whom have been on strike for a week, shared their concerns on the 10 top things to understand about the company’s health outside the shareholders meeting.
"The call for change at Walmart is the loudest it has ever been," said Moronica Owens, a Walmart mom paid less than $25,000 a year – like the majority of Walmart workers. To make sure her son has enough to eat, Moronica skips meals herself. "We feel like change is really possible – and it couldn’t be more urgent. Our resolve to improve jobs at Walmart is strengthened by such a diverse group of shoppers, investors, and associates joining us in the calls for change at Walmart.”
A new report from the independent public policy organization Demos argues that Walmart could use the $6.6 billion it spent on repurchasing stock in 2013 to instead invest in its 825,000 workers making less than $25,000 per year, putting an extra $5.13 an hour in their pockets.
GUIDE ON SHAREHOLDER DISSENT
Shareholder Resolutions Calling for Changes in Corporate Governance, Increased Disclosures
#4, the International Brotherhood of Teamsters General Fund
requests the company adopt a policy requiring the chairman of the
board be independent – ensuring the company has leadership that is
unbiased about management and represents shareholders without
conflicts of interest.
Supporters include: Institutional Shareholder Services, CalPERS, CalSTRS, the New York City Pension Funds, the Florida State Board of Administration, and the Christian Brothers Investment Services (CBIS).
#5, Amalgamated Bank, the Illinois State Board of Investment and
UAW VEBA call on Walmart to disclosure whether it has taken back pay
from executives whose actions have caused significant financial harm
to the company and its shareholders. Coalition members and filers of
the proposal also include: Connecticut Retirement Plans and Trust
Funds and F&C Management Ltd.
Supporters include: CalPERS, CalSTRS, CtW Investment Group, the New York City Pension Funds, the Florida State Board of Administration, and the Christian Brothers Investment Services (CBIS).
#6, Zevin Asset Management and Sisters of St. Agnes request that
Walmart report yearly on its lobbying activities, including through
trade associations and organizations that write model legislation.
Supporters include: CalPERS, CalSTRS, the New York City Pension Funds, the Florida State Board of Administration, and the Christian Brothers Investment Services (CBIS).
Opposition to Executive Compensation
- A number of groups are opposing an advisory vote on executive compensation. This includes Institutional Shareholder Services – the largest shareholder advisory group – and CtW Investment Group, CalPERS, CalSTRS, the New York City Pension Funds, the Florida State Board of Administration, and the Christian Brothers Investment Services (CBIS).
Votes Against Members of the Board of Directors
- In a new form of shareholder activism, 50,000 individuals – including 16,000 mutual fund investors – are asking Vanguard and Fidelity, Walmart’s largest institutional investors, to vote against the election of Rob Walton to the company board.
- Institutional Shareholder Services is opposing Rob Walton and Mike Duke.
- CalSTRS is voting against 13 out of 14 director nominees (all except Pamela Craig, who joined the board in 2013).
- New York City Comptroller Scott Stringer told Bloomberg that the New York City Public Pension Funds will vote against 6 out of 14 director nominees, including Chairman Rob Walton and former CEO Mike Duke.
- CalPERS is withholding support from three director nominees: Aida M. Alvarez and James I. Cash, and former CEO Mike Duke.
- The Christian Brothers Investment Services and the Florida State Board of Administration ($140 billion in assets), are voting against Mike Duke and Rob Walton.
Employee Shareholders Call for an Independent Chairman, Oppose Rob Walton
- A group of Walmart employees who are shareholders and also members of OUR Walmart wrote a letter to Walmart investors and prepared a voting guide this year, urging them to vote against the re-election of Rob Walton and for Proposal #4, which would require an independent chairman.
- In May, the City of Portland voted to divest from Walmart, joining Sweden’s AP Funds and PGGM and APG in the Netherlands which moved to divest in fall 2013.
LEGAL DISCLAIMER: UFCW and OUR Walmart have the purpose of helping Wal-Mart employees as individuals or groups in their dealings with Wal-Mart over labor rights and standards and their efforts to have Wal-Mart publically commit to adhering to labor rights and standards. UFCW and OUR Walmart have no intent to have Walmart recognize or bargain with UFCW or OUR Walmart as the representative of Walmart employees.