Two shareholder proxy advisory firms are urging Walmart Inc. investors to reject the company's executive remuneration packages and support a proposal seeking a strengthened boardroom structure that will address workplace sexual harassment, the Financial Times (London) reported May 27.
The development follows reports that Sen. Bernie Sanders is planning to attend Walmart's annual general meeting, scheduled for June 5, to float a proposal that hourly workers get a seat on the retail giant's board.
In a May 27 report, the news daily said Glass Lewis & Co. LLC is recommending shareholders to vote against Walmart's proposed remuneration plans for its senior executives, citing a "pay and performance disconnect."
The proxy adviser added that although payments to Walmart's executives rose on the back of annual revenue of nearly $515 billion, shareholder returns for the year declined 8%, according to the report.
According to the hypermarket operator's annual meeting notice, Walmart CEO Doug McMillon received total compensation of $23.6 million for fiscal 2019, 1,076 times higher than the median salary of $21,952 that an average Walmart worker received during the year. This despite an improvement from the previous year's $19,177 average employee median salary, according to the newspaper.
Other senior executives also benefited from Walmart's annual earnings growth. Walmart International CEO and President Judith McKenna received a package of $12.9 million, while her counterpart in the U.S., Greg Foran, received $13.5 million. CFO Brett Biggs also picked up $9.4 million.
In its notice to shareholders, Walmart justified McMillon's salary as "appropriately aligned with performance" and that the packages were offered to "attract and retain highly-qualified executives."
Institutional Shareholder Services Inc., or ISS, on the other hand, advised investors to vote for a motion that will call for better board oversight at the Arkansas-based retailer to avoid sexual harassment in the workplace but also backed the company's executive pay plan.
The proposal, which will require Walmart to compile a report stating how it handles sexual harassment complaints, was submitted by labor group United for Respect, the Financial Times said. ISS reportedly believes that such a system would assist investors to "better gauge" risks involved with such scandals.
Meanwhile, Glass Lewis reportedly expressed its reservations about the motion and recommended shareholders to oppose it. Walmart said that United for Respect's motion is "unnecessary" provided the company's existing policies, corresponding training and educational programs, according to the report.
ISS declined S&P Global Market Intelligence's request for comment, while Glass Lewis did not immediately respond to an email seeking comment.
Walmart also declined to provide comment on the report apart from it stated in its proxy filings. The company also reiterated that Walmart will respond to shareholder proposals once they are formally presented at the annual meeting.