Wal-Mart to Revamp Board -- Update
April 20 2016 - 7:38PM
Dow Jones News
By Sarah Nassauer
Wal-Mart Stores Inc. is bringing in the next generation of
Walton family members to its board, nominating a grandson of
founder Sam Walton.
Steuart Walton, a 34-year-old lawyer and pilot, would be the
first of his generation of Waltons to have a presence on the retail
giant's board. He would join at the same meeting where his father,
Jim Walton, steps down. He would serve alongside his uncle Rob
Walton, a retired chairman and director since 1978.
The move is part of a broader revamp of Wal-Mart's boardroom.
The company said four current directors are retiring and it will
cut the size of its board to 12 from 15 following its annual
meeting on June 3 as part of a plan to "strengthen the board for
the future."
In addition to Jim Walton, the company said Aida Alvarez, Roger
Corbett and retired Chief Executive Mike Duke will leave the board.
Ms. Alvarez and Mr. Corbett are rotating off the board after a
decade, in line with the company's governance guidelines. Wal-Mart
is one of the few S&P 500 companies with term limits for
directors.
A smaller group will "position the board to react and be more
nimble," said Wal-Mart spokesman Randy Hargrove. Seventy-four % of
S&P 500 companies have 9 to 12 board members, he said. The
company noted that three remaining board members have expertise in
technology at a time when the retailer is investing heavily to
boost e-commerce sales.
The Walton family holds a controlling 51% stake in the company
founded by Sam Walton in 1962 as a discount retailer. The family
held 1.61 billion shares as of April 8, a stake currently worth
more than $110 billion. Historically, three members of the Walton
family have been members of the company's board. The current board
chairman, Greg Penner is married to Carrie Walton Penner, the
daughter of Rob Walton.
Steuart Walton, like many members of his family, has worked at
Wal-Mart but he left in February 2013 to start his own company. His
firm, Game Composites Ltd., designs and builds small composite
aircraft. At Wal-Mart for about two years, he worked in the
company's M&A department, according to Wal-Mart's proxy filing.
Before working at Wal-Mart, he was an associate for three years in
the London office of Allen & Overy LLP, a law firm. He has a
law degree from Georgetown University.
"He has a strong history and familiarity with the company," said
Mr. Hargrove.
The changes mean Wal-Mart will have a board that is younger than
most of its peers. According to the company's proxy filing, the
median age of its proposed slate of new directors is 57. The median
age of directors at S&P 500 companies was 63, according to a
Journal analysis of proxies filed through Oct. 30. At that time,
the median age of a Wal-Mart director was 66.
In addition to Steuart Walton, the Wal-Mart board includes
32-year-old Instagram founder Kevin Systrom and 40-year-old Yahoo
Inc. CEO Marissa Mayer. Mr. Penner is 46.
"We're now living in a new period of disruption, largely driven
by rapid technological advances, and that change is likely to
accelerate even further," said CEO Doug McMillon, who is also 46
years old.
Wal-Mart's proxy showed that Mr. McMillon's total compensation
last year was valued at $19.8 million, up from $19.4 million in
2014. Stock awards, the largest component of the total figure,
declined to $14.3 million from $14.6 million.
Wal-Mart said its financial performance last year "did not meet
the challenging targets established" at the beginning of the year.
As a result, incentive payouts to top executives were below target
levels.
Mr. McMillon's cash incentive plan payout was $3.4 million,
representing 83.7% of the target. His base salary rose to $1.26
million from $1.2 million.
Josh Beckerman contributed to this article.
Write to Sarah Nassauer at sarah.nassauer@wsj.com
(END) Dow Jones Newswires
April 20, 2016 19:23 ET (23:23 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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