Last June, after the national uprising sparked by the murder of George Floyd by now convicted former Minneapolis police officer Derek Chauvin, Walmart’s chief executive officer Doug McMillon made a proclamation. In an address denouncing “systematic racism,” McMillon declared that the company would devote $100 million to create a “center on racial equity.” Since then, the retailer has also revealed raises in starting wages for certain groups of employees, which it has said brings the company’s average wages to roughly $15.25 an hour.
“By the end of the current fiscal year, we expect two-thirds of our Walmart U.S. hourly store roles will be full-time with consistent schedules from week to week,” the company said. “We believe full-time schedules complement the other ways we are preparing for the future of retail.”
Worker groups have both lauded and critiqued such efforts, saying that although raises were a step in the right direction, they should apply to all workers.
Walmart’s proxy statement on Thursday, issued ahead of its annual shareholder meeting scheduled for June 2, offers a window into how the company’s board views such feedback.
Among a handful of shareholder proposals the retailer’s board recommends against voting for is proposal 6, which asks the board to put out a report on how Walmart’s stated racial justice goals can be reconciled with its starting pay.
Although the retailer has recently increased the starting wage for a number of roles, its lowest starting pay that applies to other groups of workers is still $11 an hour. Roughly 46 percent of Walmart’s hourly workers are people of color, according to a recent culture, diversity and inclusion report by the company. During the pandemic, the company also issued periodic special bonus payments rather than instituting a regular hazard pay policy.
“Walmart’s starting wage, $11 an hour, is below many competitors’ $15 minimum wage; the extra pandemic bonus pay is far less than the additional pay that frontline retail associates will have earned at many of Walmart’s closest competitors,” the shareholder proposal claims.
Walmart’s board urged shareholders to vote against the proposal to put out such a report, saying, “We believe our workforce strategy is uniquely designed to promote upward mobility for our diverse workforce and is consistent with our broader goals and initiatives regarding racial equity. Therefore, we believe the preparation of the report requested by the proposal is unnecessarily duplicative of the company’s prior announcements and its ongoing work, and it would not otherwise add significant value for our shareholders.”
During the pandemic, the company has issued $1.6 billion in cash bonuses, which the retailer said “would have amounted to an additional total of $1,200 during the year for our U.S. full-time hourly associates and an additional $600 during the year for our U.S. part-time hourly associates.”
The retailer’s board also recommended against a proposal calling for workers to have more say in workplace safety issues through a “Pandemic Workforce Advisory Council.”
In support of the proposal, a longtime Walmart worker wrote that the company’s COVID-19 response had not provided workers with adequate safety or security through a crisis that required their labor to meet increasing customer demand, especially for online orders.
A survey last May found that 45 percent of participants had shown up to work even when they were unwell, many out of a fear of retaliation, according to the worker’s statement.
“A confirmed COVID-19 diagnosis or mandatory quarantine is required to access additional paid leave under Walmart’s emergency policy, which can be a significant obstacle given that many associates do not have adequate health coverage,” the worker wrote.
“I believe that improving the flow of information between frontline workers and Walmart’s board, which oversees the company’s management and has the power to set policy, would lead to more timely, consistent and effective action at the store level and would reduce reputational and financial risks to the company,” the worker wrote.
The company has reiterated its messages over the past year, emphasizing its COVID-19 emergency leave policy that grants workers up to two weeks of paid leave to stay home “for COVID-19-related reasons.” The company said it has also instituted safety measures at its stores, which include social distancing policies, sneeze guards at check-outs and facilitating more contactless services. Walmart’s board invoked those measures in recommending against the proposal.
“Walmart remains committed to the safety and well-being of our associates and customers, and we believe the many initiatives, policies and procedures that were implemented across the company’s extensive business operations in a short period of time demonstrate that we are responsive to the needs of our associates and customers,” the board wrote. “In addition, our associates already have many well-established and longstanding means by which feedback can be provided, including suggestions or concerns related to COVID-19. Therefore, we believe the adoption of this proposal is not necessary.”
The board also recommended against a shareholder proposal that asks Walmart to consider broader lobbying disclosures. Proposal 5 highlights that the company has spent roughly $67 million on federal lobbying over the past decade, and argues that the retailer’s involvement with trade organizations including the National Retail Federation and the business lobby group U.S. Chamber of Commerce raises concerns about whether its grassroots-level lobbying “contradicts Walmart’s public positions” on issues including racial justice and climate change.
“For example, Walmart pledged $100 million to advance its work on racial equity, including on criminal justice, yet the NRF has opposed state criminal justice reforms and supported harsher anti-shoplifting laws, resulting in negative press for our company,” the shareholder proposal reads.
“Walmart publicly supported COVID-19 efforts, while the [Chamber of Commerce] directly lobbied against using the Defense Production Act to speed production of life-saving personal protective equipment for workers. And Walmart believes in addressing climate change, yet the chamber undermined the Paris Climate Accord,” according to the proposal.
“We believe reputational damage stemming from these misalignments between policy positions harms long-term value creation,” the proposal reads. “Thus, we urge Walmart to expand its lobbying disclosure.”
Walmart’s board opposed the proposal, saying it believes its disclosures are adequate. “We believe our company has effective policies in place for the appropriate oversight and disclosure of the company’s lobbying activities and procedures,” the board said in its response. “We think our current disclosures demonstrate our transparency about our company’s lobbying activities.”