Set Compensation Policy that Optimizes Portfolio Value for Company Shareholders

Resolution Text

BE IT RESOLVED, shareholders ask that the board and management exercise their discretion to establish Company wage policies that are consistent with fiduciary duties and reasonably designed to provide workers with the minimum earnings necessary to meet a family’s basic needs, because Company compensation practices that fail to provide a living wage are harmful to the economy and therefore to the returns of diversified shareholders.1

The Company increased the minimum hourly wage for store associates to $14/hour in 2023. While that is good progress, the living wage in 2022 was $25.02 per hour per worker annually for a family of four (two working adults).2 The Company’s CEO, meanwhile, makes 933 times more than the Company’s median employee. While people of color compose more than half the Company’s U.S. workforce, they account for only 29 percent of officer roles,3 indicating they make up a disproportionate number of employees not earning a living wage.

Such inequality and disparity harm the entire economy. For example, closing the living wage gap worldwide could generate an additional $4.56 trillion every year through increased productivity and spending,4 translating to a more than 4 percent increase in annual GDP. A 2020 report found that had four key racial gaps for Black Americans—wages, education, housing, and investment—been closed in 2000,

$16 trillion could have been added to the U.S. economy. Closing those gaps in 2020 could have added $5 trillion to the U.S. economy over the ensuing five years.5

By paying so many of its employees below a living wage, the Company may believe it will increase margins and thus financial performance. But gain in Company profit that comes at the expense of society and the economy is a bad trade for Company shareholders who are diversified and rely on broad economic growth to achieve their financial objectives. The costs and risks created by low wages and inequality will directly reduce long-term diversified portfolio returns because a drag on GDP directly reduces returns on diversified portfolios.6

This proposal asks the Board to set a Company compensation policy of paying a living wage to prevent contributing to inequality and racial/gender disparity. The Company could achieve this Proposal’s objective by securing Living Wage for US Employer certification.7 Additionally, MIT has an online living wage calculator, or the Company can work within frameworks promulgated by organizations such as IDH Sustainable Trade Initiative or The Living Wage Network. The Company should use such frameworks in a manner that allows shareholders to gauge compliance and progress, while providing the Company with discretion as to how to achieve the living-wage goal.

Please vote for: Set compensation policy that optimizes portfolio value for Company shareholders –

Proposal 4*

1 https://theshareholdercommons.com/case-studies/labor-and-inequality-case-study/ 

2 https://livingwage.mit.edu/articles/103-new-data-posted-2023-living-wage-calculator 

3 https://corporate.walmart.com/purpose/belonging-diversity-equity-inclusion/belonging-diversity-equity-and-inclusion-report 

4 https://tacklinginequality.org/files/introduction.pdf 

5 https://ir.citi.com/%2FPRxPvgNWu319AU1ajGf%2BsKbjJjBJSaTOSdw2DF4xynPwFB8a2jV1FaA3Idy7vY59bOtN2lxVQM= 

6 https://www.epi.org/publication/secular-stagnation/ 

7 https://livingwageforus.org/becoming-certified/