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These are difficult days for Wal-Mart, but one would never know it watching the retail giant’s annual meeting on Friday.
There was no mention of the ongoing investigation into alleged bribery in Mexico and beyond, the black eye Wal-Mart received for sourcing apparel in Bangladesh, where the Rana Plaza factory collapse in April killed 1,129 Workers, and refusing to sign a legally binding safety accord.
That is, until four shareholder proposals were read later in the program, held at the University of Arkansas at Fayetteville’s Bud Walton Arena.
Wal-Mart pulled out all the stops for what is usually a high-octane, entertainment-filled spectacle with moments devoted to business, seamlessly spliced together. Hugh Jackman hosted the event with a combination of song and dance and self-deprecating humor. Prince Royce warbled the classic “Stand by Me,” and Kelly Clarkson and Jennifer Hudson also entertained.
Wal-Mart is tight-lipped about the talent it hires for “annual,” as the event is simply called. More than halfway through, a special guest was introduced: Tom Cruise. “I’ve wanted to come here for quite some time, actually,” the actor said, “because the culture you have here is like no other. I truly admire your company. [It’s] a role model for how business can address some of the biggest issues facing our world.”
Cruise spoke about Wal-Mart’s sustainability efforts and initiatives for women, including its goal to source more than $20 billion worth of goods from female-owned companies over five years. “Wal-Mart is increasing training, market access and career opportunities for one million women around the world,” Cruise said. Critics have accused the retailer of failing to support women in its workforce, with a series of sex discrimination lawsuits working their way through the courts seeking class status after the U.S. Supreme Court heard a case, Wal-Mart v. Dukes, that would have been a nationwide class-action lawsuit. The Supreme Court ruled it did not have nationwide class status.
In the discussion of its business operations, Neil Ashe, president and chief executive officer of global e-commerce, said walmart.com reinvented its search engine, resulting in customers “finding what they want and buying more often.” The pick-and-click program in the U.K., similar to Shop Online, Pick Up in Store in the U.S., is growing. In Shanghai, Wal-Mart is using scooters for home delivery and to circumvent the traffic. “We are taking share in e-commerce around the world,” Ashe said. “In Brazil, we went from number eight to number one in just five months. In China, we made a major investment in Yihaodian, and ASDA is the second-biggest online grocer in the U.K.”
It wasn’t all celebration, however. Kalpona Akter, executive director of the Bangladeshi Center for Worker Solidarity, proposed giving shareholders the right to convene emergency board meetings. Referring to the tragedies in Bangladeshi factories, she said, “Wal-Mart’s supply chain is out of control.” Addressing Rob Walton, chairman, Akter said, “Fixing factory buildings would cost just a tiny fraction of your family’s wealth. You have the power to do this very easily. Don’t you agree the factories where Wal-Mart products are made should be safe for the workers? Forty-two companies have already signed an accord that represents a real commitment to worker safety. Wal-Mart is only one of a few retailers that refused to sign. Wal-Mart p.r. said [it has] an alternative agreement, but not a single meaningful detail has been provided. Every time there is an accident, Wal-Mart officials make a promise to improve the terrible conditions in my country’s factories. Apparel workers are dying by the hundreds. Could there be any more clear reason for an emergency meeting?”
Other shareholder proposals included adopting a policy requiring senior executives to hold onto a large portion of their shares until they reach retirement age, appointing an independent chair to the board and requesting an annual report of recoupment of executive pay.
Rob Walton delivered the unofficial preliminary results of the propositions. He said the company-sponsored proposals, including the election of 14 directors, passed, while those introduced by shareholders failed.
The overall mood of the meeting was decidedly upbeat. Charles Holley, chief financial offer, crowed about the company’s stock, which closed on Thursday at $75.63 on the New York Stock Exchange, a 17 percent increase over the stock’s price at last year’s annual meeting. The $466 billion retailer grew sales by $92 billion over the last five years and is closing in on half a trillion dollars. “I love saying that,” he said. Profits last year were $28 billion and grew faster than sales. Earnings per share of $5.02 is up 10 percent over the last five years.
“Wal-Mart U.S. grew by $10 billion last year to $274 billion,” he said. “Sam’s Club had $56 billion in sales last year. Wal-Mart international, with $135 billion in sales, is big enough to be the second-largest retailer in the world and represents almost 30 percent of total company sales.”
Wal-Mart last year added 35 million square feet of retail space worldwide. About 19 million of it was devoted to the international business.
The board retired a 2011 $15 billion share repurchase plan and authorized a new $15 billion program.
Mike Duke, president and ceo of Wal-Mart Stores Inc., noted that the company’s free cash is up 18.1 percent. “Our long-term business strategies are working,” he said.
Duke alluded to the alleged bribery scandal, saying, “Our company was founded on integrity, and over the past years we’ve strengthen our compliance programs. Compliance is absolute.”