It’s not every day that a presidential hopeful shows up at Walmart Inc.‘s annual shareholder meeting, but Bernie Sanders on Wednesday did just that, grabbing headlines and using the exposure to, well, sound like a candidate by pointing a finger at the corporate goliath on behalf of the working-class voters he hopes to capture.
The Vermont Independent and longtime Walmart foe — last year Sanders introduced The Stop Walmart Act prohibiting large employers from buying back stock unless they agree to raise wages, among other things — attended the meeting to read a shareholder proposal.
Sanders took Walmart to task about wages, after first reading a shareholder proposal written by Cat Davis, a member of the organization United for Respect and a veteran sales associate, urging the board to give seats to hourly employees.
“The issue we’re dealing with is pretty simple,” Sanders said. “Walmart is the largest private employer in America and is owned by the Walton family, the wealthiest family in the United States. Yet, despite the incredible wealth of its owner, Walmart pays starvation wages, so employees are forced to rely on government programs. The American people are sick and tired of subsidizing the greed of some of the largest and most profitable companies in the country.
“The Walmart ceo makes 1,000 times more than the average employee,” Sanders added. President and chief executive officer Doug McMillon in 2018 received $23.6 million. “Last year Walmart earned $10 billion in profits.…Surely, with all of that, Walmart can afford to pay its employees a living wage of at least $15 an hour. That’s not a radical idea because competitors — Amazon, Costco and Target — have already moved in that direction. Walmart can strike a blow against corporate greed and the grotesque level of income inequality.”
Wall Street wasn’t too troubled by Sanders’ appearance, however. Walmart shares closed at 104.46, up 1.85 percent, or $1.90, on the New York Stock Exchange.
And Walmart was fully prepared for Sanders’ appearance, with McMillon enumerating the retailer’s benefits for workers in an effort to pre-empt the inevitable criticism.
Walmart even featured past President Obama and his wife Michelle in an opening video montage about the retail and digital behemoth’s sustainability efforts. “More companies are realizing that wasting less energy isn’t just good for the planet, it’s good for business,” the former president said, while his wife spoke about Walmart’s work with suppliers.
Hillary Clinton is another prominent Democrat who was associated with Walmart, having served on the board for six years, beginning in 1986.
“We’ve invested in our associates with higher pay, training and education, new technology for our associates, lower prices for our customers and in our e-commerce business to help ensure our future,” McMillon said. “Our operating margin percentage is slim and these investments hurt earnings for multiple years.
“Taken together, these decisions are working. Just a few years ago, our U.S. comp sales ran down for five quarters in a row, but we’ve now run up in comp sales for the past 19 consecutive quarters. Last year, excluding fuel and tobacco, Sam’s Club comps increased 5.7 percent and our international markets delivered positive comps in eight out of 10 markets.
“We’ve moved up starting wages in the U.S. by 50 percent in the last four years, and continue to adjust up, market by market, to recruit and retain the talent we need to run a good business,” McMillon said, adding that during the period the company invested an incremental $4.5 billion in pay beyond traditional wage increases.
“It’s clear by our actions and those of other companies that the federal minimum wage is lagging behind, $7.25 is too low,” McMillon said. “It’s time for Congress to put a thoughtful plan in place to increase the minimum wage.”
The ceo gave $17.50 per hour as Walmart’s average compensation. A spokesman explained that the figure includes hourly wages, benefits and bonuses. Walmart’s starting wage is $11 an hour. The retailer has pledged to pay associates $15 an hour, although no timeframe has been set for reaching that threshold, even as competitors Amazon and Target already are at that level.
McMillon said hourly associates earned $793 million in cash bonuses last year on top of compensation. “We promoted more than 215,000 store associates last year,” he said. “Across the U.S. workforce, 57 percent of hourly promotions were to women and 45 percent were to people of color. Also, 75 percent of store managers started as hourly employees.
Walmart offers new benefits, such as a dollar-a-day college program. There’s parental leave with as much as 16 weeks of paid time off for birth mothers and a new $5,000 child adoption benefit. “We cover 1.1 million associates and family members in the U.S. and offer health-care options that start as low as $28 per pay period,” McMillon said, adding that centers of excellence in partnership with providers such as the Mayo Clinic and Johns Hopkins University are available to associates facing a health crisis.
After the various presentations, the proposal to include hourly associates among potential board of director candidates, and the only other shareholder proposal, which called on Walmart to strengthen the prevention of sexual harassment, both failed to receive affirmative votes from a majority of shares represented at the meeting.