By Sarah Nassauer
Top executives at Wal-Mart Stores Inc. needed to be more
attentive to sales growth to earn their bonuses.
Wal-Mart has tied executives' cash bonus to the retailer's sales
performance for its fiscal year, in addition to operating income,
according to its proxy statement filed with security regulators.
The year prior, executives were judged largely on the company's
operating income to receive the maximum cash bonus possible.
In recent years, Wal-Mart has struggled to grow sales,
especially in its core U.S. business. The retailer has notched
sales growth in its last two quarters after more than a year of
declines in sales excluding newly opened or closed stores. In the
year ended Jan. 31, U.S. sales excluding newly opened stores rose
0.5% while overall U.S. sales increased 3% to $288 billion.
In a regulatory filing last year, the company said it planned to
add a sales-related performance measures to part of the cash
payment portion of salary "to emphasize the importance of sales
growth as a priority for our company." Wal-Mart executives earn
compensation in several forms: base salary, stock awards and a cash
incentive, along with other forms of payment.
Chief Executive Doug McMillon's cash bonus in the last fiscal
year was based 25% on total company sales, while 75% was based on
total company operating income, according to the proxy. Former
Chief Executive Mike Duke's cash payment was based entirely on
total company operating income in the year prior. Other executives
were also evaluated on company sales performance for the cash
portion of their salary, including U.S. chief Greg Foran and Chief
Financial Officer Charles Holley.
Mr. McMillon's total compensation for the year ended Jan. 31 was
$19.4 million, down 24% from $25.6 million in the previous year.
Mr. McMillion became Wal-Mart chief executive in February 2014. Mr.
Foran, who became the company's U.S. head last year, earned $19.5
million in fiscal year 2015.
The company said its performance "did not meet the challenging
targets" established at the beginning of fiscal 2015, resulting in
executive pay below target levels, in the filling.
Josh Beckerman contributed to this article
Write to Sarah Nassauer at sarah.nassauer@wsj.com
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