Wal-Mart Stores, Inc. Annual Shareholder Meeting
June 5, 2015
Vote FOR Proposal No. 9 – Independent Chair Policy
Vote AGAINST Director S. Robson Walton
S. Robson “Rob” Walton is the most powerful person at Wal-Mart Stores, Inc. (“Wal-Mart” or
“Company”). He is the non-independent Chair of the Board of Directors (“Board”), member of the
Board’s Executive Committee, and leader of the family that controls more than half the outstanding
shares of the Company.
It is time for Mr. Walton to step down as Chair in favor of an independent director who can represent
non-insider shareholders without conflict. Under Mr. Walton’s leadership, Wal-Mart has experienced a
series of legal and regulatory compliance failures that may put the value of the Company at risk. These
failures include:
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Alleged illegal bribery at Wal-Mart’s Mexican subsidiary (“Wal-Mex”) and the alleged cover-up
of such bribery by Wal-Mart officials in Mexico and the United States1;
Alleged accounting irregularities in China2;
The National Labor Relations Board’s finding of multiple labor law violations in California and
issuance of a nationwide complaint, which is currently pending3;
Various judgements against Wal-Mart or settlements totaling more than $1.18 billion in wage and
hour violations since 20084; and
Wal-Mart’s guilty pleas for violating several Federal environmental laws, paying over $80
million in fines.5
These legal and regulatory compliance failures have led to costly investigations and penalties, threaten
Wal-Mart with further contingent liabilities and reputational damage, and risk greater regulatory scrutiny
and increased barriers to operating in certain markets, including urban markets in the U.S. where WalMart has struggled to gain a foothold. All of this could harm the Company’s stock price.
Compliance problems like these also suggest that Wal-Mart’s internal controls over financial reporting
may be inadequate, and they hint that senior management and Directors may be failing in their
stewardship of the Company. Wal-Mart has not disclosed the name of a single person held accountable
for the alleged Wal-Mex bribery and cover-up. Failure to hold wrongdoers accountable and disclose such
accountability sends the wrong message to employees and leaves shareholders in the dark. Since at least
as far back as 2005, shareholders have been expressing concerns about the “culture of non-compliance
and disregard for ethical standards within the ranks of Wal-Mart’s management.6”
We are Wal-Mart store employees with more than 40 years of combined experience working at the
company, and we have been shareholders for almost that long. We are members of Organization United
for Respect at Walmart, an organization of employees committed to improving our jobs and our company.
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Shareholders’ Best Interests
According to the International Corporate Governance Network (ICGN) Global Corporate Governance
Principles, Director responsibilities include “overseeing the integrity of the company’s accounting and
financial reporting systems, including the independent audit, and that appropriate systems of control are in
place; in particular, financial and operational control, and compliance with the law and relevant
standards.”7
Under this standard, Mr. Walton and other Wal-Mart Directors are responsible for establishing and
overseeing systems for accounting and financial reporting, internal controls, and legal compliance. To cite
just one example from the list above, the alleged long-term, systematic, and illegal payment of bribes by
Wal-Mex officials would be a clear failure of these systems, as would be the failure to disclose the
alleged bribes as a possible violation of the FCPA to the Department of Justice, the SEC, and to
shareholders. Such failures would constitute significant breakdowns of Mr. Walton’s and other Wal-Mart
Directors’ governance, stewardship, and risk oversight responsibilities.
We believe that as the most powerful person at Wal-Mart Mr. Walton bears the greatest responsibility for
the corporate culture that has allowed these legal and regulatory compliance failures to take place. As
described in the most recent Proxy, he “has extensive legal and corporate governance expertise.”8 He is
Chair of the Board, meaning he “provides advice and counsel to the CEO and other officers; focuses on
oversight and governance matters.”9 Thus, according to the Company, he has the capacity to establish and
oversee the internal controls necessary for best-practice legal and regulatory compliance systems.
Yet, from the evidence we have available, Mr. Walton has not used his power and positions for this
purpose. Discussing Mr. Walton and the Wal-Mex allegations in 2012, ISS noted, “There is one man who
has had the ability to steer the company on the correct course at every crossroads, at the time of the
original investigation and again today—chairman S. Robson Walton… Walton could have acted in his
fellow shareholders' best interests in each of these instances, but from all outward appearances has failed
to do so.”10
As we see it, Wal-Mart needs more robust and independent oversight of its corporate culture and
behavior. That oversight should come from a Board committed to implementing best-practice internal
controls and legal compliance systems and to holding themselves and senior management accountable for
breakdowns in those systems. Such a Board should be led by an independent Chair who can represent
non-insider shareholders without conflict.
That is why we urge you to vote FOR Proposal No. 9, submitted by the International Brotherhood of
Teamsters General Fund, which calls on the Board to adopt a policy that the Chair of the Board should be
independent. And, given the record described above, we also urge you to vote AGAINST Mr. Walton’s
reelection as Director.
Sincerely,
Mary Pat Tifft
Mary Watkines
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1
D. Barstow, “Vast Mexico Bribery Case Hushed Up by Wal-Mart after Top-Level Struggle,” The New York Times,
April 21, 2012, available at: http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquirysilenced html?pagewanted=all& r=0; and also D. Barstow and A. Xanic von Bertrab, “The Bribery Aisle: How WalMart Got Its Way in Mexico,” The New York Times, December 17, 2012, available at: http://www.The New York
Times.com/2012/12/18/business/Wal-Mart-bribes-teotihuacan.html.
2
Rene Dudley, “Wal-Mart Report Found Profit Boosted by China Maneuvers,” Bloomberg News, December 11,
2014, available at: http://www.bloomberg.com/news/articles/2014-12-10/wal-mart-report-found-profit-boostedby-china-maneuvers.
3
Steven Greenhouse, “Walmart Illegally Punished Workers, Judge Rules,” The New York Times, December 10,
2015, http://www.nytimes.com/2014/12/11/business/walmart-illegally-punished-workers-judge-rules.html;
National Labor Relations Board, “NLRB Office of the General Counsel Issues Complaint against Walmart,” Press
Release, January 15, 2014.
4
Steven Greenhouse and Stephanie Rosenbloom, “Wal-Mart Settles 63 Lawsuits Over Wages,” The New York
Times, December 12, 2008, available at: http://www.nytimes.com/2008/12/24/business/24walmart.html;
Attorney General of Massachusetts, “Attorney General Martha Coakley's Office Reaches $3 Million Agreement
with Wal-Mart to Settle Claims the Company Violated the Massachusetts Meal Break Law,” Press Release,
September 24, 2009, available at: http://www.mass.gov/ago/news-and-updates/press-releases/2009/ag-coakleysoffice-reaches-3-million.html; U.S. Department of Labor, “US Department of Labor Recovers $4.83 Million in Back
Wages, Damages for More than 4,500 Wal-Mart Workers,” Press Release, May 1, 2012, available at:
http://www.dol.gov/opa/media/press/whd/WHD20120801.htm; Wal-Mart Stores, Inc. Form 10-K, March 27,
2012, p. 43; “Wal-Mart Must Pay $188 million in Workers' Class Action, Reuters, December 16, 2014, available at:
http://www.reuters.com/article/2014/12/16/us-walmart-lawsuit-idUSKBN0JU1XJ20141216.
5
Jessica Wohl, “Wal-Mart Pleads Guilty in U.S. Hazardous Waste Cases, to Pay $82 Million,” Reuters, May 28, 2013,
available at: http://www.reuters.com/article/2013/05/28/us-walmart-hazardouswaste-idUSBRE94R0Y720130528.
6
Letter, William C. Thompson, Jr., Comptroller of the City of New York, to Roland A. Hernandez, Chair, Audit
Committee of the Board of Directors, Wal-Mart Stores, Inc., May 25, 2005.
7
International Corporate Governance Network, “ICGN Global Corporate Governance Principles: Revised (2009),”
reprinted July 2013, p. 10.
8
Wal-Mart Stores, Inc., Notice of 2015 Annual Shareholders’ Meeting and Proxy Statement, April 22, 2015, p. 22,
available at:
http://www.sec.gov/Archives/edgar/data/104169/000130817915000149/lwmt2015 def14a.htm#lwala008.
9
Ibid., p. 29.
10
ISS Proxy Advisory Services, “Wal-Mart Stores, Inc.,” May 19, 2012.
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