Walmart Workers to Attend Yahoo Shareholder Meeting…Again.

Last year, just as Walmart was illegally firing  workers for participating in legally protected strikes, Walmart Associates who are members of OUR Walmart were attending the Yahoo! shareholder meeting.  They did so in order to address their concerns about Walmart’s illegal retaliation to Yahoo! CEO Marissa Mayer, who is also a member of the Walmart Board of Directors.  The workers and the questions they directed to Mayer were widely covered in the press.

Following the encounter at last year’s Yahoo shareholder meeting, Ms. Mayer has persisted in her steadfast refusal to meet with members of OUR Walmart, despite repeated invitations.

Now, Mayer is doubling-down on Yahoo’s ties to Walmart by nominating former Walmart CEO and Director H. Lee Scott to join the Board of Yahoo!

In this post, we summarize some of the issues that may be raised at this year’s Yahoo shareholder meeting on June 25th.

Yahoo! values to Walmart or Walmart Values to Yahoo!?  

Expect to hear questions about whether Ms. Mayer is bringing Silicon Valley values to Walmart or allowing Walmart values to creep in at Yahoo.

The meeting comes on the heels of a new report about the lack of diversity at Yahoo and the Yahoo Board will be welcoming three new members whobring the total number of people of color on the Board to….zero.

OUR Walmart members are also sure to raise questions as to whether Ms. Mayer’s role at Walmart subjects Yahoo to unnecessary reputational risk, or simply represents an unnecessary distraction (is Mayer’s being two hours late for an important advertising meeting because she was asleep, a sign of being overcommitted?)

New Yahoo Director Heavily Implicated in Alleged Bribery and Cover-Up at Walmart

The nomination of former Walmart CEO Lee Scott to the Yahoo! Board (at Ms. Mayer’s behest) raises serious questions for Yahoo! investors about their company’s commitment to accepted standards of corporate governance and legal compliance. Scott is among those implicated in in the alleged bribery and cover-up scandal at Walmart.

As the Pulitzer-Prize winning articles in The New York Times detail, Mr. Scott, who was then CEO of Walmart, rebuked internal investigators into the alleged bribery for being overly aggressive.  The Times reports that,

“days later, records show, Walmart’s top lawyer arranged to ship the internal investigators’ files on the case to Mexico City.   Primary responsibility for the investigation was then given to the general counsel of Wal-Mart de Mexico – a remarkable choice since the same general counsel was alleged to have authorized bribes.”  

 As CEO of Walmart, Scott approved this transfer of responsibility, thereby limiting the internal investigation.  The alleged bribery and apparent cover-up and the failure of the company to fully investigate and disclose these matters at the time may yet result in  criminal and/or civil actions being taken against Walmart and senior executives including Mr. Scott. It has already had serious consequences for Walmart investors, as the company expects to spend more than $600 million by the end of the current fiscal year on lawyers, internal investigations, and compliance reforms. The matter is currently under investigation by the Department of Justice and the Securities and Exchange Commission.  The company has said that it expects to spend more than $600 million through January 31, 2014 on internal investigations, legal fees and compliance reforms.

If The New York Times is accurate, it appears that Mr. Scott not only participated in the alleged cover up of FCPA violations, but may have also subsequently violated the certification requirements of the Sarbanes Oxley Act numerous times, by failing to disclose to the SEC and to shareholders credible evidence of FCPA violations, inadequate internal controls, and fraud by senior management personnel.

Mr. Scott’s E-Commerce Record at Walmart is Poor

Mr. Scott was CEO of Walmart from 2000 to early 2009 – a period during which analysts appear to agree that Walmart’s progress in the area of e-commerce was characterized by repeated stumbles and slow growth.

As of 2007, Walmart’s failures in e-commerce were being noted in the industry press.

 Meanwhile, Wal-Mart has struggled online. Its website lags behind competitors like and Target, and recent marketing experiments using social networking technologies have achieved mixed success. The company has even suffered in its sweet spot, with serious setbacks to its deployment of radio-frequency identification (RFID) tags throughout its supply chain. 


Wal-Mart is struggling to build an online presence. It ranks 13th in Web sales volume among retail businesses, according to industry watcher Internet Retailer, even though, according to Web data analysis company Alexa, is the third most-popular retailing website based on number of users (behind and


Walmart’s failure to build an ecommerce foundation during Mr. Scott’s tenure continues to be felt today.   The company reported online sales of $10 billion in 2013 - less than 3 percent of overall sales – compared with Amazon’s online sales of $67.85 billion.

Can Yahoo! shareholders really expect Mr. Scott to be independent?    

 According to Yahoo, the role of the Nominating and Corporate Governance Committee of the Board of Directors “shall be to recommend to the Board individuals qualified to serve as directors of the Company and on committees of the Board.”

However, Yahoo’s proxy document states that Mr. Scott was identified as a candidate for service by Ms. Mayer.  The two served together on Walmart’s Board, until Mr. Scott stepped down earlier this month.

Given Mr. Scott and Ms. Mayer’s existing relationship and her role in identifying him for service at Yahoo, can Yahoo investors really expect Mr. Scott to be independent?

Particularly given Mr. Scott’s implication in the alleged bribery and cover-up at Walmart and his failures in the area of ecommerce, shouldn’t Yahoo investors have the right to expect that candidates for Board service will go through established channels of nomination and vetting?


How will Ms. Mayer respond to these kinds of questions?   Will Yahoo investors raise other concerns about Mayer’s focus on Yahoo or about Mr. Scott’s potential legal issues?    The shareholder meeting is on Wednesday at 8am pacific.   Check out the live stream here.



Friday headline roundup

Walmart’s dirty secret (New York Post, 6/11/2014)

A final tally of votes from Walmart’s annual shareholder meeting held last week also showed unprecedented opposition against key directors, including Chairman Rob Walton, who saw 29 percent of independent voters opposed to his re-election. A full 40 percent of shares not controlled by the founding Walton family voted that Walton be replaced by an independent chairman. Last week, Walmart appeared to thumb its nose at that proposal by appointing Walton’s son-in-law as his heir apparent to helm the board. “It’s déjà vu all over again in terms of high votes against directors and, unfortunately for Walmart’s shareowners, the board’s cynical response,” said New York City Comptroller Scott Stringer, whose city pension funds voted against 6 of Walmart’s 14 directors.

My Life on the Walmart Treadmill (Huffington Post, 6/10/2014)

I’m caught in the neverending cycle of the working poor: I work because I need to support myself but the work I do at Walmart doesn’t provide enough means in order for me to support myself, nor does it offer any relief from my plight nor any progression from it. I’m not an underachieving worker either. I am a cashier and I’m really good at it too. In my first six months, my scans per hour were the highest in my entire district and I even won a cashier rodeo, beating out the best cashiers in the district, winning $100 for a store-wide pizza party — but we never had the party. There was a point in time when I was training to become the customer service manager as well. However, after close to six months of “training” — often doing this job all by myself — I wasn’t offered the position yet I was still scheduled to work as the customer service supervisor, and I wasn’t compensated for the work I did.

Former Managers Allege Pervasive Inventory Fraud at Walmart. How Deep Does the Rot Go? (The Nation, 6/11/2014)

Among the big questions raised by these allegations is whether irregular inventory accounting practices are widespread and systemic throughout the company, or the result of a few local rogue operations. And, if the practices are widespread—and not corrected for on the company’s financial statements—are they significant enough to inflate the company’s profitability and, in the process, its stock price?

Wal-Mart Is Family Friendly—at Least to Members of the Walton Family (Businessweek, 6/5/2014)

Yet in some ways, Walmart is still a family business. The Waltons own slightly more than 50 percent of the company, a share that’s gone up in recent years. Rob Walton, Sam’s eldest son, is chairman of the board of directors, a position he’s held since 1992. His brother, Jim, and son-in-law, Gregory Penner, are also on the board. That’s too many Waltons for some shareholders, who want a more independent board and plan to say so at the company’s annual meeting on June 6.

Poll: Walmart’s treatment of associates affects consumer choices

Check out Lake Research Partners’ new polling data on Walmart:

The conversation about Walmart’s treatment of employees is influencing consumer decisions. An important share of consumers do not believe Walmart treats their employees well. This affects how they feel about Walmart and their willingness to shop there. Consumers also believe that Walmart is a successful company, capable of treating employees better, and support efforts to do so. The data is clear that Walmart’s record of treating workers poorly is harming the company’s reputation. Furthermore, the concerns about Walmart’s pay and treatment of workers is putting its market share at risk, leading even some of its most loyal customers to consider avoiding the store.

“The opposite direction” from better corporate governance

How did Walmart’s leaders respond to the myriad employees, investors, and proxy advisors urging the company to strengthen corporate governance standards by establishing an independent board chairman? Why, by entrenching Walton control of the company, of course, appointing director Greg Penner as the board’s vice chair and setting him up to succeed his father-in-law Rob Walton as chairman of the company.

Charmaine Givens-Thomas of Illinois, a longtime Walmart associate and shareholder, traveled to Arkansas to attend the company’s annual meeting and read the shareholder resolution calling for an independent chairman. She was not impressed by Walmart’s selection of Penner, telling Bloomberg: “It’s absolutely in the opposite direction that we wanted. We want Walmart to put an independent person in there to be more fair to the associates and shareholders.”

Company leaders’ message to Walmart associates and shareholders seems to be: You don’t matter unless you’re a Walton. However, the Walton family, Walmart executives, and members of the board of directors shouldn’t expect to be able to ignore other shareholders forever. Indeed, shareholder sentiment for better governance standards appears to be rising: Between 2013 and 2014, the percentage of shareholders supporting an independent chairman for the company’s Board of Directors increased. Will it grow even more in 2015?

Friday headline roundup

Wal-Mart Board Criticized by ISS; More Independence Needed on Pay and Handling of Bribe Probe, ISS Says (Wall Street Journal, 5/26/2014)

Institutional Shareholder Services Inc., which advises big shareholders like mutual funds how to vote on corporate ballots, is concerned the company hasn’t disclosed which, if any, of its executives might be found culpable in an investigation into alleged bribery overseas. ISS also said it is troubled by a string of adjustments to pay targets and plans that together have the effect of insulating executives’ pay somewhat from the consequences of Wal-Mart’s declining performance. The recommendations are unlikely to have much practical effect given the Walton family’s control over the company. But they do highlight the recent challenges Wal-Mart is facing. The retailer recently reported its fifth straight quarterly decline in U.S. sales and said there is more weakness to come. It is struggling in international markets as well.


Wal-Mart Shareholders Want to Hear More About This Bribery Problem (BloombergView, 5/27/2014)

Should you vote to re-elect Wal-Mart chairman S. Robson Walton and director Michael T. Duke? Hahaha who cares, your vote doesn’t count, over 50 percent of Wal-Mart’s shares are controlled by Walton family members so they can do whatever they want. If you’re actually filling out a ballot, just write in my name or whatever, it doesn’t matter.

Wal-Mart Workers Plan Strikes Ahead Of Company’s Shareholders Meeting (Business Insider, 5/29/2014)

The striking workers will primarily be mothers who are fighting for higher pay, better benefits, and more opportunities for full-time work, organizers said Thursday. They are also protesting what they call retaliation against workers who speak out against the company. 


Why Walmart needs to support a higher minimum wage (Yahoo! Finance, 5/27/2014)

Breakingviews estimates that Walmart could net an additional $13 billion if the minimum wage jumps to $10 an hour. At least one quarter of Walmart shoppers work in minimum-wage jobs and they’re more likely to spend that extra cash than save it, Cox notes. For now, Walmart has stayed mum on the issue. But that’s to the company’s — and employees’ — disadvantage, Cox says. “It’s the right thing for the working man, who also happens to be their customer,” he adds.  

Walmart’s reputation gap with Costco continues to grow in new Nielsen/Harris poll

In late April, Nielsen/Harris released the latest results of its Reputation Quotient survey. And, as has become commonplace for Walmart on customer surveys, the results were not good. Walmart dropped four places in the ranking. Meanwhile, the reputation gap between Costco and Walmart continues to grow and is now the widest it has ever been.

Walmart's reputation gap: Costco's widening advantage in Harris Reputational Survey

In response to the release of the poll, OUR Walmart member and store associate Tiffany Beroid released a statement that read, in part:

It’s no surprise that Walmart fell in the rankings. As my co-workers and I continue to speak out about the problems at the country’s largest employer, Americans are increasingly concerned about where the company is headed and feel the economic impact of its choices…Customers see first-hand–and are frustrated by–the issues we’ve been raising. Stores are understaffed, shelves aren’t stocked, and associates are treated poorly on the job; many have faced illegal retaliation for speaking out for better jobs…..And rather than investing in jobs, Walmart spends billions on advertising trying to convince Americans the problems workers and customers face aren’t real.

Major proxy advisor calls for better governance at Walmart

From the Wall Street Journal:

Wal-Mart Stores Inc. needs a more independent board in order to improve directors’ handling of a protracted foreign-bribery probe and executive pay, a prominent proxy adviser said.

Institutional Shareholder Services Inc., which advises big shareholders like mutual funds how to vote on corporate ballots, is concerned the company hasn’t disclosed which, if any, of its executives might be found culpable in an investigation into alleged bribery overseas.

ISS also said it is troubled by a string of adjustments to pay targets and plans that together have the effect of insulating executives’ pay somewhat from the consequences of Wal-Mart’s declining performance.

The recommendations are unlikely to have much practical effect given the Walton family’s control over the company. But they do highlight the recent challenges Wal-Mart is facing. The retailer recently reported its fifth straight quarterly decline in U.S. sales and said there is more weakness to come. It is struggling in international markets as well.

Who’s responsible for the Walmart Mexico scandal?

Excellent piece from Ben Heineman Jr., a Senior Fellow of the Program on Corporate Governance at Harvard Law School, on Walmart’s Global Compliance Report and the state of the company’s FCPA investigations. An excerpt: 

What is missing [from the Global Compliance Report], in my view, is a powerful statement by the CEO that he is the leader of compliance in Walmart—and a companion, deeply-felt statement by the board that this is a core CEO responsibility. The Report is replete with redrawn organizational boxes and organizational detail. But, an integrity culture is simply not possible without CEO commitment to integrity as a bed-rock company goal, and to driving compliance deep into the organization through personal action and reviews. In both the current Annual Report and Proxy Statement, there are rather pro forma statements, but not a sense of real personal commitment from the CEO (as opposed to the Audit Committee) or the board. Similarly, the company must make clear the related point that the top operating business leaders are the chief integrity and compliance leaders in their sphere—that they must make this issue a reality by their own personal actions and leadership.

Walmart’s bribery scandal, and the sweep of the current investigation, have made this case a poster-child for the snares of corruption facing global companies, putting it in the same category as the towering bribery scandal faced several years ago by Siemens. Many boards and CEOs from around the globe cite corruption as one of the top issues they face in current globalization efforts—in this sense, “the whole world is watching” the Walmart case carefully.

With its Global Compliance Report, Walmart has written an important chapter in this saga. But, until the results of the investigation are made public and the government’s response revealed, the story—both on past accountability and future governance—is far from over.

Read the whole thing here.

Friday headline roundup

Wal-Mart’s biggest problem: Its customers (CNBC, 5/19/2014)

Its prices continue to undercut competitors. It’s offering a slew of new initiatives, from in-store money-transferring services to organic groceries—even comparison shopping for auto insurance. But despite these strategies—and a broad consumer base driven by low prices—Wal-Mart’s U.S. stores are still struggling to gain traction, having posted their fifth-straight quarter of negative same-store sales last week. At the center of the discounter’s domestic woes is its appeal among shoppers who are facing stagnant wage growth and simply can’t afford to spend on discretionary items—or in some cases, food.


Why Is Walmart Standing Down in the Minimum Wage Fight? (Demos, 5/19/2014)

And if wages went up for all low-wage workers, that could mean big boost: Walmart’s increased labor costs for hundreds of thousands of workers may be easily offset by more spending by tens of millions of flusher customers. Surely the other factor guiding Walmart on the minimum wage is public relations. Publicly opposing a minimum wage hike would add to the company’s image as being anti-worker. Which is to say that the pressure on Walmart by pro-worker groups is having an effect.


Recycling fund from Walmart, P&G and others passes the buck on responsibility (The Guardian, 5/21/2014)

While this may help some cities finance some relatively small projects, this is not – nor should it be seen as – a game-changer. This loan fund will do little to help achieve the stated goal to “provide 100% of US consumers with access to recycling where and when they need it”. So why are they doing it? Every company wants to build their green cred through touting sustainability efforts. For example, at the Walmart expo, P&G also trumpeted their detergent compaction process which puts more detergent into a smaller package as a sustainability initiative. This is what I would call “easy sustainability” because it either costs nothing or saves the companies money. Marketers love easy sustainability because it helps them woo higher-income customers who are willing to pay more for a seemingly greener product. However, many corporations are completely reluctant to do the harder work of “authentic sustainability” – projects or public policy initiatives that may cost money but make significant progress toward solving environmental problems that the companies help create.


Why Wal-Mart’s Retail Dominance May Be in Danger (The Motley Fool, 5/18/2014)

There are several forces combining to threaten Wal-Mart’s status as the industry juggernaut. Its customer base is under duress, it’s facing a severe swing in public opinion for its employment practices that is pushing shoppers toward Costco, and its attempts to expand in the emerging markets aren’t working out. If Wal-Mart isn’t careful, it might just lose the top spot in the retailing space sooner rather than later.

“Let’s just say the numbers can be made to fib”

Walmart shareholders haven’t had a great year. Despite a hot market, Walmart stock has been flat and FY 2014 sales were up just 1.6%. But don’t worry: The flat stock performance didn’t hurt pay for Walmart’s top executives! As Gretchen Morgenson of the New York Times wrote this weekend, “when it comes to figuring the performance of top executives, let’s just say the numbers can be made to fib.”

The Times detailed the ways in which Walmart made “adjustments” to various performance measurements, far more than in previous years, to allow executives to meet their performance bars. One specific example given is that of U.S. CEO Bill Simon. Without the adjusted results, Mr. Simon would have missed his target sales growth of 2% for the U.S. unit, which grew by just 1.8%. But with the adjustments, which included discounting the impact of cuts to food stamp benefits, Mr. Simon eked out a 2.03% growth rate and received an additional $1.5 million in compensation. Mr. Simon’s total compensation was $13 million.

But, of course, virtually all other Walmart employees do not benefit from these kinds of “adjustments” when their bonuses are calculated, if they even get bonuses. The Times article quotes Mary Pat Tifft, a 20-year associate from Kenosha, Wisconsin:

“Walmart associates are having their hours cut because of declining sales but executives are still getting their bonuses,” she said. “It’s ridiculous that they can keep receiving their compensation because they keep moving the numbers around.”

What do you think? How are Home Office employees faring? Let us know at