Question

Review: As Walton Family Solidifies Majority, Wal-Mart Workers Promise Dissent for Fair Pay. By O'Conner. 2013.

1. What are some of the shareholder proposals listed in the article?
2. What are the groups complaining about against Wal-Mart?
3. What is Wal-Marts response to their claims
4. What of kind of ethical dilemma does Wal-Mart face?

Answer 1

Requirement 1

The article emphases on only one of the five shareholder offers presented at the annual meeting. Janet Sparks, a Wal-Mart customer service manager addressed a crowd of 14,000 to suggest that senior executives to hold a large share of their shares until retirement. This would (positively) create placement of interests with front-line employees.

All five proposals, together with Sparks, was voted down with the Walton’s family keeping more than 50% of the companies stock. A $15 billion dollar share buyback that was declared the same morning of the annual meeting referenced in the 2013 article would likely cover their control even more. The buyback publication was combined with the resignation of three directors, trimming the board to 14, 9 of whom are independent.

Requirement 2

One of the organizations that disagrees with Wal-Mart is a wholly-owned subsidiary of the United Good and Commercial Workers Union that goes by the name of OUR Wal-Mart. The week of the annual meeting corporate Wal-Mart responded by filing a provisional restrictive order against the group. The court order was anticipated to ban, “picketing, patrolling, parading, demonstrations, ‘flash mobs’, handballing, solicitation, and manager confrontations in the state of Arkansas” .Not to be daunted by a show of power and what is called in the article as “considerable” police existence activists gathers in front of Jim Walton’s home the days before the shareholders conference.

Requirement 3

During Sparks presentation she pointed out the fact that Mike Duke got over $20 million dollars last year while the usual sales associate earns an annual wage of $19,104, well below the United States poverty line for a family of four. Although the majority shareholders voted all stakeholder offers down, the 27.1% of non-Walton family voted contrary to Duke being re-elected. Likewise, Rob Walton also received a 22.6% non-Walton family vote against re-election.

Wal-Mart called OUR Wal-Mart a “made-for-TV group” and asserts that most of the people seen at protests aren’t even Wal-Mart associates, instead paid advents by the unions. Lundberg goes onto defend Wal-Mart stating that 160,000 Wal-Mart associated were endorsed and given raises in the last fiscal year. No specific numbers of raise amounts were mentioned however Lundberg states that, “the bottom line is, at Wal-Mart, you can go as far as your work and talent takes you.” This can be a hard statement to swallow for those doing the math of the incongruity between Duke’s annual salary and those of the average sales associate whom works full-time but still need government assistance to provide for their families.

Requirement 4

Wal-Mart is in a risky place in many ways. Not only must face the consequences of un-happy front-line employees but also un-happy stakeholders. This is not something that goes overlooked by the public eye. It is very clear that the enormous bridge between the top executives and the sales associates must be narrowed if things are to continue without public chaos. This article is not the first and certainly won’t be the last to grace Forbes pages. It is un-ethical to make billions of dollars while your employees live in poverty. Consumers are realising the fact that each time they make a purchase at Wal-Mart they are voting with their money and supporting current business practices. If Wal-Mart wants to remain the brick-and-mortar mega giant that it is there needs to be change and quickly. The ease of acquiring basics at the click of a button has made it far too easy for consumers to take their money elsewhere.