Walmart names new board chairman, keeps job in family
Walmart (WMT) is passing the chairmanship of the world's largest retailer from the eldest son of late founder Sam Walton to a third generation.
The company said that board Chairman Rob Walton will step down and be succeeded by Vice Chairman Greg Penner, who is his son-in-law.
The change took effect at the end of the company's annual shareholders' meeting Friday and came despite pressures from labor-backed worker groups to name an independent chairman. The calls for independent leadership mounted in the wake of allegations of bribery in Mexico and other countries Walmart operates in that came to surface in spring 2012.
Walton, son of Walmart founder Sam Walton, has been chairman since 1992. The company says the 70-year-old will continue to serve as a director. Jim Walton, another son of the late founder, also remains on the board.
Penner, whose background is in technology and finance, will be the company's third chairman in the company's 53-year history. Rob Walton took over as chair upon the death of his father in 1992. The announcement comes Walmart is facing challenges on all fronts, from how it runs its operations to how it treats its workers.
Penner, 45, joined Walmart as a management trainee and held a number of positions including senior vice president of finance and strategy for Walmart.com and chief financial officer for the Japan unit. He had been a general partner of Madrone Capital Partners, an investment management firm since 2005. He joined Walmart's board in 2008. Rob Walton noted on stage at the meeting that Penner is married to his daughter.
Penner had been the chairman of the company's technology and e-commerce committee since it was formed in 2011 and has been instrumental in guiding the company on the technology front.
"You've been a great mentor. No one can fill your shoes," said Penner, referring to Walton. Penner joined Walton on stage as well as Doug McMillon, the company's CEO, and former CEO David Glass who served at the helm from 1988 to 2000.
Walton said that Penner "brings an ideal blend of finance, technology, and international business expertise - as well as a deep knowledge and love of Walmart - to this role."
The announcement was not a surprise after Walton named Penner as vice chairman at last year's annual shareholders' meeting. The Walton family controls about 50 percent of the company's shares.
Keeping with Walmart's practice of showcasing celebrities at the annual event, the meeting was being hosted by actress Reese Witherspoon. Singers Brian McKnight, Rod Stewart and Ricky Martin also performed on stage. Entertainer Carol Burnett was on stage, too, and did her trademark Tarzan call.
"I was born and raised in the South. It's nice to be back in the South," said Witherspoon. "I can get my y'alls out." She said she grew up shopping at Walmart.
The meeting, held at Bud Walton Arena at the University of Arkansas., 30 miles away from the company's headquarters in Bentonville, was packed with 14,000 workers from all over the world.
Despite all the hoopla, the company is under a microscope. Revenue at U.S. stores open at least a year have risen for three straight quarters, but that came after seven straight declines. And the recent increases have been small.
Like many retailers catering to lower-income shoppers, Walmart has been hurt by an uneven economy that hasn't buoyed its customers financially. Meanwhile, shoppers are increasingly researching and buying online, and the company faces intensifying competition from dollar stores and Amazon.com.
To counter that pressure, Walmart is accelerating the rollout of smaller stores and also investing in technology, like online grocery services. It just launched a subscription service for online shoppers with an annual fee of $50.
But the company, which is also under pressure from labor-backed groups to treat its workers better, is also investing in its workers. The company announced earlier this year $1 billion in wage increases and improved training that includes raising the minimum hourly pay for its workers to $9 in April. By next February, Walmart will raise that minimum to $10.
The company is also relaxing the dress code for the 1.2 million workers at its namesake U.S. stores, piping music to its stores and adjusting the temperatures so workers are not too cold or hot.
The changes have not quieted labor groups, which say workers are still struggling. They are pushing for wages of $15 per hour. Among the proposals by shareholders was a call for an independent chairman who doesn't serve as an executive at Walmart. The proposal and four other shareholder proposals were voted down by a majority of votes, according to a preliminary tally because of the Walton family's control.
Walmart is expected to file the final tally of proxy votes next week with the Securities and Exchange Commission.
During the meeting, Walmart CEO and President Doug McMillon, who succeeded Mike Duke to the top position in February 2014, called on workers to fight complacency to serve customers better.
"We're threatened much more by the things we control than those outside our influence," McMillon said. "Our real villains are things like bureaucracy, complacency, a lack of speed or a lack of passion. Let's fight those villains together."
Venanzi Luna, a worker in the Pico Rivera, California, Walmart store that was closed in April, also addressed shareholders Friday. Company officials said the store had to close temporarily because of plumbing issues. But Luna and other workers said it was because it was the site of political activism and the move was in retaliation against the workers.
"Our managers say our stores closed for 'plumbing problems,' but the real reason is that my store had been speaking out for change at Walmart," she said.
"Our board of directors needs an independent chair committed to the highest standards of integrity."
Marc Goumbri, a spokesman at the United Food and Commercial Workers International Union, said that making Penner chairman further cements the family's power over the board and company.
"Instead of listening to and respecting Walmart worker shareholders who have been calling on Walmart empire to implement a new policy establishing an independent chairperson, Walmart and the Waltons have once again decided to elevate family members to powerful positions," he said.
A government investigation is still ongoing regarding possible violations of the Foreign Corrupt Practices Act, which prohibits companies from bribing foreign officials.
____
Associated Press Business Writer Candice Choi contributed to this report from New York.
____
This story has been corrected to say the year allegations of bribery surfaced were 2012, not 2013.