Three proposals on company proxy scheduled for a vote at annual meeting of stockholders on June 1st.
NEW YORK, NY, THURSDAY, APRIL 28TH, 2022 - When Walmart ($WMT) shareholders attend the company’s annual meeting on June 1st they will be voting on three shareholder proposals raising areas where they believe company performance may be falling short.
Walmart has stated it “aims to do more than operate responsibly and mitigate business risk....the company wants to help transform related societal systems (e.g., food systems, workforce development systems) for more equitable and sustainable outcomes.” However, while Walmart has made progress in recent years on several issues of sustainability, given its size, influence, and global reach, shareholders are calling on the company to model genuine leadership by creating value for all its stakeholders.
Two of the three proposals center on Walmart’s workers: the first seeks to improve communication between frontline hourly workers and decision-makers on the board; the second seeks to understand how Walmart’s starting wage for new associates, often the lowest-paid members of Walmart’s workforce, aligns with the company’s stated racial justice commitments.
A proposal filed by Cynthia Murray, a long-time Walmart associate, Walmart shareholder, and founding member of United for Respect, asks the Board of Directors to create a Pandemic Workforce Advisory Council composed of hourly Associates, to provide guidance to the Board on pandemic-related workforce issues, including health and safety measures, whistleblower protections, and paid sick leave.
Walmart’s founder, Sam Walton, exalted the value of Associate input: “The folks on the front lines—the ones who actually talk to the customer—are the only ones who really know what's going on out there. You’d better find out what they know."
According to the proposal: 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.
"Walmart contends it has multiple communication channels for associates to express concerns to company leadership, yet associates have reported being retaliated against for raising safety issues to store managers. Clearly, existing channels to communicate directly with frontline workers are ineffective,” said Bianca Agustin, Corporate Accountability Director at United for Respect. “A pandemic advisory council would provide directors with a formal mechanism to engage directly with associates, unfiltered by middle management, and help ensure company policies and practices reflect associate experiences and needs."
A second proposal focused on workers asks how Walmart’s racial justice goals and commitments align with the starting pay for Walmart Associates. As our nation confronts the challenges of an ever-widening and racialized wealth gap and the U.S. Bureau of Labor Statistics reports record turnover in the restaurant and retail industries, investors say Walmart must do more to address pay inequities in its ranks.
Walmart Associates have identified wages as the most important element of their compensation and higher wages have been shown to improve recruitment and attendance, promote better health, and reduce turnover and operational problems leading to better business performance. Moreover, given the concentration of people of color in low-paying jobs, investors argue boosting starting wages would advance Walmart’s stated commitment to helping address the structures of systemic racism. As the company achieves record profits and stock price, there needs to be a conversation about the equitable or even reasonable balance between shareholder returns and worker compensation.
“Walmart’s CDEI Report provides significant detail about the gender and racial makeup of Walmart’s workforce, but it does not contain any information about how those demographics correlate with wages,” said Sr. Sue Ernster, Vice President & Treasurer/CFO, Franciscan Sisters of Perpetual Adoration. “The report we requested would help Walmart leadership understand the economic realities facing the company’s hourly frontline Associates.”
The third shareholder proposal asks Walmart to disclose corporate spending on direct and indirect lobbying activities to assess whether Walmart’s lobbying is consistent with the company’s stated goals and interests.
Investors say Walmart has made progress in its disclosure of some of the requested information on lobbying activities including the disclosure of key trade association memberships and certain other organizations, coalitions and initiatives that help to shape public perspectives on ESG matters. Walmart has also taken steps to better articulate how the board oversees these engagements with these third parties. However, investors are concerned that Walmart has not provided actual spending amounts that would help to clarify the degree of involvement with these organizations.
Corporate-funded lobbying and grassroots groups may seek to advance policy that is contrary to Walmart’s stated positions at state and local levels, which may have broader public policy implications on ESG-related objectives.
“Companies do not have a limit on how much spending they do through non-profits and so-called special welfare organizations,” said Marcela Pinilla of Zevin Asset Management. “These actions, some of them designed to spread misinformation, can expand across state lines and shape civil society’s perception of the social and environmental challenges we face. Walmart has now disclosed the names of the third parties it allies with, but we are concerned that stopping short of disclosing its spending presents reputational risk when its lobbying contradicts Walmart’s public policy positions. This leaves a massive blind spot for investors.”
Proposals calling for disclosure around lobbying spending generally receive strong shareholder support with many majority votes. The investors note that a similar proposal garnered 22% of the vote in 2021 which, when excluding shares held by Walmart family and insiders, would have achieved a 54% majority vote.
The proponents are seeking the support of their fellow Walmart shareholders for these proposals when they come to a vote at the annual meeting on June 1st.
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 51st year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs, and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn, and Facebook.