The world's largest retailer is drawing criticism from key influences of its shareholders, Bloomberg reported. In response to reports about executive compensation and potential of the Foreign Corrupt Practices Act in Wal-Mart Stores Inc's overseas stores, Institutional Shareholder Services Inc and Glass Lewis & Co has not so very nice observations about how the company had been handling the issues.
In an advisory note at the shareholder meeting on June 6 at the retailers, Rockville, Maryland-based ISS reiterated its earlier call to install an independent chairman in the company board.
"The board failed to make progress in providing meaningful information to shareholders about any specific findings on the FCPA-related investigations and whether executives will be held accountable for related compliance failures," ISS said.
Glass Lewis said in a separate report, "The Walton family can ensure the election of each of the 14 director nominees without action on the part of any other shareholder. We suspect that most, if not all, shareholders both understand and accept the nature and extent of the Walton family's control over the company and the composition of its board."
The current chairman of the board is Rob Walton. The founding family has control of over a half of the company's outstanding shares, which means that the recommendations of both the ISS and Glass Lewis will put a dent on the outcome of the proposals at the investor meeting. However, Bloomberg noted that the criticism somewhat lends its support to certain groups who had been lobbying for changes at the retailer. For one, the union-backed CtW Investment Group is currently heading a campaign that aims to vote against the executive compensation of Wal-Mart.
On the other hand, Wal-Mart spokesman Randy Hargrove said in a response to the FCPA-related investigations about alleged bribery in their stores in Mexico, Brazil, China and India, "The FCPA investigation is an ongoing investigation, and we're cooperating fully with the Department of Justice. We don't have a timeline for when the investigation will be completed, but we haven't waited to act. The board has authorized whatever resources are necessary to get to the bottom of the matter."
