With Wal-Mart getting ready to throw a big party for its 50th birthday this week, pension funds from across the county are defying the corporation’s board by voting against the directors who drove the retailer into the Mexican bribery ditch.
On May 29th, the Massachusetts Pension Reserves Investment Management (PRIM) Board issued a press release announcing it had voted against the election of seven of Wal-Mart’s sixteen board members. According to the PRIM release, some of the board members were “deemed too closely associated with an alleged bribery scandal in Mexico that recently came to light.” The Massachusetts Pension Reserves owns about $60 million in Wal-Mart stock.
In similar fashion — but on a much larger scale — the California Public Employees’ Retirement System (CALPERS), which owns $228 billion (3,800 times more than Massachusetts) last week said it was withholding its support for the election of nine Wal-Mart directors until there was “a thorough and independent investigation into the bribery allegations”
CALPERS was joined by the smaller California State Teachers’ Retirement System (CALSTRS) which gave a thumbs down on all the Wal-Mart directors as a vote of no confidence. (CALSTRS) said it would vote against the election of all 16 Wal-Mart directors for similar reasons.
In New York City, five pension funds joined ranks in voting against some of the Wal-Mart directors.
PRIM Board Chairman Steve Grossman, who is the Massachusetts State Treasurer, said in a press release, “These allegations detail egregious examples of corporate illegalities, and it’s critical that we as shareholders voice our strong disapproval. We need to make it clear that these kinds of corporate abuses are not acceptable, and that serious repercussions happen when problems are not appropriately addressed. Shareholders own public companies, not the other way around.”
Grossman said recent reports have suggested that some members of the company’s board of directors and senior management were complicit in regulatory and legal misconduct related to the incident. PRIM voted against all seven board members due to concerns about their independence since they are associated with Wal-Mart in capacities other than the full board, and it voted against four of them specifically because of their alleged connections to the Mexican bribery incident.
PRIM owns 923,626 shares of Wal-Mart, which by company standards is not much — but Grossman said “shareholders like the Massachusetts pension fund raising objections could fuel additional scrutiny and prompt the company to improve its corporate governance.
PRIM voted against M. Michele Burns, Michael T. Duke, Gregory B. Penner, H. Lee Scott, Jr., Jim C. Walton, S. Robson Walton, and Christopher J. Williams.
In a recent Security and Exchange Commission report, Wal-Mart admitted it “began conducting a voluntary internal review… into whether certain matters, including permitting, licensing and inspections, were in compliance with the U.S. Foreign Corrupt Practices Act.” The company told stockholders “We do not believe that these matters will have a material adverse effect on our business, financial condition, results of operations or cash flows.
After researching the Mexican bribery case, CalSTRS concluded that “the complete breakdown of Wal-Mart’s corporate governance threatens to damage the Company’s business reputation.”
Readers are urged to go to Wal-Mart’s Global Ethics Office at:
https://walmartethics.com/ReportAConcern.aspx
and file the following concern:
“I am concerned about the lack of independence on Wal-Mart’s board of directors. It appears that the 10 directors the company says are ‘independent’ are really bought and paid for with their six figure salaries. If they speak out against the company, or ask for more transparency, they could be risking that big salary.
Wal-Mart is not really meeting NYSE standars on board independence, and somebody on the board should have blown the whistle on the Mexican bribery cover up. Now it looks like the millions spent on board members is just hush money to buys board silence. Numerous pension funds across the country have voted against the board of directors. It does not appear that the Global Ethics office at Wal-Mart is either global, or ethical.”
With Wal-Mart getting ready to throw a big party for its 50th birthday this week, pension funds from across the county are defying the corporation’s board by voting against the directors who drove the retailer into the Mexican bribery ditch.
