Walmart will host its shareholders meeting this week. The world’s largest retailer calls the annual event a “celebration.” But Bernie Sanders and worker advocates are coming to Walmart’s Bentonville, Arkansas, headquarters prepared for a fight.
Shareholders will vote Wednesday on whether to strengthen Walmart’s sexual harassment policies and approve executives’ pay. And, in the biggest twist to this year’s gathering, Sanders will introduce a shareholder proposal putting hourly workers on Walmart’s board of directors and press Walmart to raise its $11 an hour minimum wage.
“I’m going to Bentonville, Arkansas, to tell the Walton family of Walmart, the wealthiest family in America: Get off welfare. Pay your workers a living wage!” Sanders tweeted last week.
Walmart (WMT) is pushing back. It says its existing sexual harassment policies are sufficient. The company argues its CEO and executive pay are appropriate. And it believes it has worked hard to make life better for its more than 1.5 million workers in the United States.
“We hope [Sanders] will approach his visit not as a campaign stop, but as a constructive opportunity to learn about the many ways we’re working to provide increased economic opportunity, mobility and benefits to our associates,” said Randy Hargrove, spokesperson for Walmart.
Walmart’s annual shareholder meeting is expected to draw 16,000 workers, investors and retirees from around the world.
Sexual harassment proposal
The shareholder proposal calling on Walmart to step up its sexual harassment procedures was filed by United for Respect, a workers’ advocacy group. The proposal urges Walmart to “formalize the board of directors’ oversight responsibility” on the issue, align senior compensation incentive structures, review company policies and report to shareholders by the end of the year on how it’s addressing sexual harassment.
The proposal cited a study by the Center for American Progress that found that the retail industry has the second-highest rate of harassment claims in the private sector.
As the largest corporate employer of women in the United States, Walmart “should be a leader” in establishing policies that “enable women and men to reach their full potential at Walmart while holding wrongdoers accountable,” the proposal states.
Walmart opposes the proposal, calling it “unnecessary.” Backed by influential proxy advisory firm Glass Lewis, Walmart says it has strong procedures in place to combat sexual harassment. The company argues that its training and education programs raise awareness about the policies and how workers can confidentially report their concerns.
The company also says its executive compensation plans and incentive awards include clawback provisions and other ways to reduce compensation if employees violate company policies.
Although Glass Lewis recommended that shareholders vote down the proposal, it came with a warning: The firm said it will monitor Walmart’s response to sexual harassment issues and may recommend shareholders adopt “better-tailored proposals at future meetings” if Walmart does not adequately respond to harassment allegations.
Walmart’s executive compensation package, however, has drawn scrutiny from Glass Lewis.
CEO Doug McMillon’s total compensation reached nearly $24 million during the last year as the company continued to hold its ground against Amazon and other rival retailers.
“We are a pay-for-performance company and heavily link our executive compensation program to the company’s operating performance and our strategic priorities,” Walmart spokesperson Randy Hargrove told CNN Business in April.
Yet Glass Lewis believes that Walmart’s compensation plan exhibits a “sizable disconnect between pay and performance.”
Walmart’s stock dropped 8% during the last fiscal year. But Walmart’s overall sales grew 3%, and digital sales ballooned 40%. Walmart’s all-important holiday sales blew past expectations, too.
The proxy advisory firm argued that Walmart’s executive compensation structure focuses too much on short-term performance targets, instead of longer-term incentives.
Walmart disagrees. The company said that its annual results are often impacted by macroeconomic conditions. It believes annual performance goals are the most effective way to offer incentives for strong executive performance.
But Glass Lewis noted that “overwhelming majority” of companies with similar sizes use multi-year goals to structure incentive plans. Walmart has not “designed a compensation program that will sufficiently [align] pay with performance going forward,” the firm said.
Walmart isn’t alone
Shareholders are growing increasingly vocal at companies’ annual meetings.
Fight for $15, with support from the Time’s Up Legal Defense Fund and the American Civil Liberties Union, filed 25 new sexual harassment charges and lawsuits against the company. And presidential candidates, including Sanders, made statements in support of McDonald’s workers during the shareholder meeting.
At Walmart’s meeting, Sanders will pressure Walmart to raise its wages and introduce a shareholder proposal calling for hourly associates to have a seat on Walmart’s board. The proposal was filed by Carolyn Davis, a Walmart worker.
In a tight labor market, Walmart has been investing in worker pay and benefits.
Last year, Walmart increased its starting hourly wage in the United States to $11 an hour and paid nearly $800 million in bonuses to hourly workers based on stores’ performance. It also added new maternity and parental leave policies. The company says its average hourly total compensation and benefits come out to more than $17.50 an hour.