The Wal-Martians are coming

By Maylon T. Rice

The Wal-Martians are coming
How much are they making, how much are they bringing in and other facts

Every year, like the swallows returning to Capistrano, thousands of Wal-Mart shareholders descend on the world headquarters here in Northwest Arkansas. This week as Fayetteville and all of NWA is bracing for the invasion of Wal-Mart shareholders—popularly know in these parts as Wal-Martians—for the annual Wal-Mart Shareholders meeting, city, regional and yes, company pride is bustin’ out all over. It’s also a heyday for protestors who think that Wal-Mart should be thinking more like Burger King and doing things their way. In other words, everyone is here.

As Wal-Mart associates from all over the world converge on the University of Arkansas campus in Fayetteville, where the activities are centered, conversations between associates usually start with a little bragging—“In my state….”

So what do they brag about? Here is a sampling of some of the bragging rights Wal-Mart associates may be sharing.

In Rhode Island, the smallest of the 50 states, there are only two super centers, seven discount stores and a lone Sam’s Club? But those Rhode Island Wal-Mart full time hourly wage associates earn $11.43 an hour. Wal-Mart Stores spent $552 million for merchandise and services in the tiny state during the last fiscal year.

All the way across the country and up aways, our neighbor to the north and the largest state of them all, Alaska, can boast only two super centers (same as Rhode Island), only six discount stores and three Sam’s Clubs. The average hourly wage for full-time associates in the frigid north is $12.43 an hour. Wal-Mart spent $79 million for merchandise and services for the big state.

Here in Arkansas, especially here in Northwest Arkansas, there is lots to brag about. Benton County is where Mr. Sam started out with Store No. 1 and although it’s gone, the world headquarters is here, smack in the middle of Bentonville. Arkansas has 66 super centers, 17 discount stores, six Neighborhood Markets and seven Sam’s Clubs. The state also boasts 10 – count ’em – 10 distributions centers.

But the real bragging’ point is that from it’s Arkansas base, Wal-Mart purchased $7 billion, that’s with a B -billion worth of goods and services. Sadly, however, the average hourly wage for full-time associates in the state is $10.65 an hour.

There is that old saw that things are always bigger in Texas and Wal-Mart, it seems, is indeed bigger in Texas. With 296 super centers, 43 discount stores, 34 Neighborhood Markets, 72 Sam’s Clubs and 14 distribution centers, it’s hard to argue the fact that Texas is indeed the leader in all things Wal-Mart. The company stepped up the average, full-time hourly wage in the Lone Star State to $10.69 an hour. And in Texas, Wal-Mart spent $31 billion for goods and services.

More Fact and Figures
How many associates does it take to run the world’s largest retail company? The number is staggering. Wal-Mart is closing in on becoming the world’s largest employer. The company may have already surpassed the United States government, which at one time was thought to be the world’s largest single employer.

Wal-Mart estimates it has 2.1 million associates, from CEO H. Lee Scott, down to the part-time cart pusher at Super Center 144 in Fayetteville.

If you do the math, you can imagine that it would take the entire population of Houston, Tex. to run the Wal-Mart operation. A recent visit to the Wal-Mart website listed almost 1,000 job openings.

No wonder the company did away with those little blue “How May I Help You!” vests. Two million of them is a chunk of change.

Other things about Wal-Mart:
– By the end of 2008, six months from now, Wal-Mart projects it will increase the number of electronic prescriptions it fills to eight million. This will be a 400 percent increase in the total number of e-scripts filled by Wal-Mart stores in the U.S. over the last year. It saves trees.
– By the end of 2010 Wal-Mart will provide its associates and their families, including Wal-Mart retirees, with private, portable electronic health records.
– Within the next three years Wal-Mart’s goal is to work with suppliers to put the most energy efficient products in its stores to become 25 percent more energy efficient.
– Within two years all air conditioners sold at Wal-Mart will be Energy Star qualified. These use 10 percent less energy that other models.
– In Arkansas, Wal-Mart stores collected $396.6 million in state and local sales taxes during the last fiscal year and paid more than $141.7 millions in state and local taxes during the same time period.
– In Texas, Wal-Mart collected $1.5 billion in state taxes and paid in $247.7 million in state and local taxes.
– Each non-management Wal-Mart Board of Director receives $140,000 in an annual equity award of shares of company stock in addition to an annual retainer of $60,000, which can been taken as cash or stock. As executive officers of Wal-Mart, H. Lee Scott and Rob Walton do not receive these benefits.
– None of the celebrities, musical stars or big name entertainers are paid to appear at the Shareholders Meeting. Most are glad to come and get exposure for the stores selling their lines of merchandise. They usually travel at their own expense and vie for time on the stage with Wal-Mart big wigs.

This year’s big questions
The Shareholders meeting is the time when those who hold of shares of stock in the company vote on the direction of the company by casting ballots on different proposals and transact other business “properly brought” to the meeting. Some decisions are made way before the first Wal-Mart cheer kicks off the annual meeting at 7 a.m. Friday in the Bud Walton Arena. The Wal-Mart Board of Directors issues their opinion on the proposals and presents their nominations for board of directors in the Share Holders booklet—a 70-page item this year.

At this year’s meeting, following a week of activities like trade shows and big name concerts, shareholders will be asked to vote yeah or nay on eight shareholder originated proposals, and three company originated proposals. Wal-Mart is asking that the three company proposals be approved and the eight shareholder proposals be turned down.

The shareholder proposals range from the establishment of a human rights committee to implementation of pay plan for superior performance.

The company proposals ask for the approval of its 15 nominees for its board of directors—of which all but two are currently serving, approval of an amended and restated Management Incentive Plan and ratification of the appointment of Ernst & Young as the company’s independent accountants.

Shareholders will be asked to approve two new board members, one of them a son-in-law of a Walton family member, and proffer a vote of confidence for its 13-seated board members.

If approved as nominated, the Wal-Mart Board of Directors will consist of three women and 12 men. S. Robson (Rob) Walton and Jim C. Walton, two of founder Sam Walton’s sons, sit on the board. Rob Walton is Chairman of Wal-Mart and Jim Walton is Chairman and CEO of Arvest Bank Group and Chairman of Community Publishers Inc. Still on the board and the longest serving board member is David D. Glass, who served as President and CEO of Wal-Mart between 1988 and 2000.

Seaking seats on the board for the first time are Gregory B. Penner and Arne M. Sorenson.

Penner is a son-in-law of Rob Walton. At age 38, Penner is no stranger to Wal-Mart having served as Senior Vice President and CFO of the Japan division from 2002 to 2005. He has been a General Partner at Madrone Capital Partners, an investment management firm since 2005. Penner would join Rob Walton and Jim Walton to be the third Walton family member on the board.

Sorenson, 49, is the Executive Vice President and CFO of Marriott International and president of Marriott’s European lodging division. Wal-Mart disclosed that it did approximately $5.5 million in business with Marriott and its subsidiaries during its last fiscal year.

Shareholder Proposals
Eight proposals will be brought to the meeting and will be voted on by shareholders. The Board of Directors recommends no votes on all eight. The proposals are:
1. Establish Human Rights Committee
Asks for establishing a board management committee to oversee labor and human rights controversies, claiming that past controversies have damaged the Wal-Mart brand and long-term shareowner value.

Wal-Mart management says the company “….takes seriously our commitment to ethical sourcing and to the health, safety, compensation and working conditions of our Associates and workers in our suppliers’ factories around the world,” and does not believe that adopting this proposal is necessary.
2. Advisory Vote on Executive Compensation
Shareholders have asked for the opportunity to cast an advisory vote on the compensation package for NEO’s, (named executive officers) at the annual shareholders meeting, claiming that there is concern from investors about the “mushrooming executive compensation that sometimes appears to be insufficiently aligned with the creation of shareholder value.”

Wal-Mart says that shareholders who are not satisfied with the performance of the board or the corporate management already have the ability to express such dissatisfaction through the annual election of directors.
3. Political Contributions Report
Shareholders presenting this proposal say that outside sources report that Wal-Mart contributed $5.6 million in corporate funds since the 2002 election cycle. The shareholders want complete disclosure from the company on what trade associations and tax exempt organizations the company’s political expenditures go to, citing examples of other companies that publicly disclose this information.

Wal-Mart says that “ample disclosure exists regarding our political contributions to alleviate the concerns cited in this proposal” and it would place the company “at a competitive disadvantage by revealing our long-term business strategies and priorities” because “the company is involved in a number of legislative initiatives that could dramatically affect our business and operations.”
4. Social and Reputation Impact Report
Drawing information from media reports, shareholders presenting this proposal want the board of directors to issue by Oct. 2008, a report on the negative social and reputation impact of management non-compliance with International Labor Organization conventions and standards on workers’ rights and the company’s legal and regulatory controls. They cite a study that that shows that 2 to 8 percent of Wal-Mart shoppers have stopped shopping at the stores because of the company’s reputation. This proposal also wants the board to outline its recommendations on how to reverse this negative reputation.

Wal-Mart says that this could not be properly issued and that the issuance of any such report would be contrary to the best interests of the company and shareholders. They also claim that the company complies with all applicable labor and employment laws and regulations.

5. Special Meetings
This proposal requests the ability to call a special meeting when it merits “expeditious consideration.” One of the arguments notes that Wal-Mart stock has been stuck in the $45 to $60 range for over seven years. It also cites that some of the company’s directors serve on corporate boards of companies with low bond ratings.

Wal-Mart say that this proposal “….would be contrary to good corporate governance practices” and that because the company is a Delaware corporation, shareholders legally do not have this right and that this would be an invitation for unscrupulous people to disrupt company business. It says that mechanisms are in place to give shareholders access to board members and senior management and certain matters are required by law to have a vote of the shareholders.

6. Amend Equal Employment Opportunity Policy
A request to amend the company’s equal employment opportunity policy to explicitly prohibit discrimination stating that state and local laws are inconsistent.

Wal-Mart cited its Equal Opportunity Policy and listed the company’s recognition of its commitment to diversity including being named one of Diveristy Inc.’s Top 50 Companies for Diversity.

7. Pay-for-Superior-Performance
This proposal outlines several suggestions regarding executive compensation in order to promote long-term corporate value.

Wal-Mart says the executive compensation program that is in place is adequately tied to performance.

8. Recoupment of Senior Executive Compensation Policy
Shareholders presenting this proposal want Wal-Mart to adopt a policy that would better allow the company to recoup future compensation to senior executives involved in fraudulent or illegal conduct or other misconduct.

Wal-Mart says it is committed to pursuing and has pursued recoupment actions against former associates who have been “unjustly enriched by acting unethically.”

How to transform into a Wal-Mart(ian) this week
It’s not so hard to do

Ever since the Wal-Mart Shareholders meeting has been held on the University of Arkansas campus, local folks, who are not Wal-Mart invitees, aka Wal-Martians, have been sneaking in to see some of the big name musical acts and celebrities. As former Razorback football coach Danny Ford said, it don’t take a scientific rocket to figure out how to swing it.

Wal-Martians, by definition, are those who are here for the shareholders meeting and they fall into a few different categories:

1) A Wal-Mart associate who has been bused, flown or has driven here to be part of the rah, rah, sis, boom, ba annual pep rally;
2) An hourly employee at a local store or a corporate employee;
3) A Wal-Mart stockholder or,
4) One of the Walton clan

But there are hundreds of others, who don’t fall into the above categories, who sneak into some of the annual proceedings every year, especially the concerts and entertainment venues.

When they hear that their favorite American Idol wanna-be, country crooner or rap daddy, will be in town, they figure out a way to get into Bud Walton Arena. Among last year’s special guest were Jennifer Lopez and Sinbad.

And ah yes, to those of you who are new in town, the arena, is named after a Walton, Sam’s brother, Bud, who loved basketball and threw the UA a pretty good cash deal on building the arena when Razorback basketball was a really B-I-G deal.

And of course, Wal-Mart at that time, needed a bigger venue for the rapidly growing shareholders meeting. The almost 20,000 seat arena serves just fine and the UA with its hands-off policy lets the world’s largest retailer hold court on the court and on other UA locations.

But back to sneaking in to see the big name acts, whomever they may be this year.

Tip No. 1: Dress like a shareholder. This is not too hard to do. Go to Wal-Mart and purchase one of the souvenir t-shirts for the annual shareholders
meeting. They are, guess what, on sale. Wear some dress shorts – remember look like you’re on vacation.
Tip No. 2: Walk a really long way to get to the show. Along the way chit-chat and befriend some Wal-Martians from out of town, especially those from way out of town. Mix into the herd and keep the friendly banter going. Once inside you are on your own.
Tip No. 3: Arrive at the gates when the crowds are the largest—not hard to do. Act like you have just been inside and gone back out to get someone.
Tip No. 4: Tell the gatekeeper you have gotten separated from your group – and they are inside. Try something like you had to go get your cell phone, which you are, by the way, chatting on all the time, while the usher is trying to talk to you as you walk into the arena.
Tip No. 5: Surely you must know a vendor name that you can drop. Say you’re with them and that you have a CD that you have to get in for the presentation.
Tip No. 6: Don’t argue. Don’t call attention to yourself. Sometimes you have to walk around to another entrance where the usher is a little more laid back to be able to stroll right in.
Tip No. 7: Be flexible. Most of the time, even with the really big name acts.. Most everyone gets in anyway.
Tip No. 8: Wear lots of pins and ribbons and carry in building Wal-Mart luggage, aka those nasty plastic sacks, and you will look just like a Wal-Martian.

They like us, they really like us
because they’re letting us in for free

The powers that be in Bentonville are once again, allowing us commoners (aka non Wal-Mart associates or stockholders) into the big name concerts for free and although Taylor Swift, Lifehouse, Journey and All American Rejects have come and gone, tonight you can catch the really big shows.

The only glitch is that doors open first to Wal-Mart affiliates and then to the rest of us. Here’s where and when to line up.

-Razorback Stadium: Keith Urban, Carrie Underwood. Gates open to public at 7:15 p.m.

– Barnhill Arena: Juan Luis Guerra. Doors open to public at 6:45 p.m.

Categories: Features