Shareholders Want Wal-Mart To Treat Minorities, Women Better

Proposals ask for independent directors, reports on political spending

Last updated Saturday, May 28, 2005 11:27 PM CDT in Business

By Lana F. Flowers
The Morning News

Wal-Mart also should justify annual bonuses that exceed executives' salaries and shareholders should ratify executive severance plans that exceed executives' salaries and bonuses, the proposal states.

Institutional Shareholder Services of New York City, a firm that analyzes proxies and makes corporate governance recommendations, supports the additional disclosure about executive bonuses and benefits and recommends shareholders vote for the proposal.

• The AFL-CIO Reserve Fund of Washington, D.C., which owns 2,700 shares of Wal-Mart Stock, wants senior executives to get shares of stock based on performance, rather than getting stock options.

Institutional Shareholder Services advises Wal-Mart stockholders to vote against the proposal because the company already has a performance-based executive stock grant program.

• The General Board of Pension and Health Benefits of the United Methodist Church of Evanston, Ill., which owns 922,422 shares of Wal-Mart stock, and the Libra Fund LP of New York City, which owns 30,930 shares of Wal-Mart stock, want the company to say how it will protect workers' rights, human rights and the environment.

The church and Libra Fund ask Wal-Mart's board to prepare a sustainability report by December 2005. The report should include Wal-Mart's definition of sustainability, a review of company policies related to social, environmental and economic sustainability and a summary of Wal-Mart's long-term plans to implement sustainability measures.

Institutional Shareholder Services also recommends shareholders vote for the sustainability proposal.

"While we commend the company for the steps it has taken to address some issues of concern, ISS also notes that sustainability reporting is becoming the norm at many large companies and that Wal-Mart has continued to face concerns related to certain employment and labor issues in its operations," the ISS states in a written report.

• NorthStar Asset Management Inc. of Boston, which owns 3,400 shares of Wal-Mart stock, wants the company to prepare a report on how much in stock options are granted to employees based on gender and race. The report should be prepared no later than Nov. 1, 2005.

Institutional Shareholder Services advises Wal-Mart stockholders to vote for the measure.

" ... We believe that specific controversies and litigation related to the company's compensation practices related to gender and racial composition warrant further disclosure," ISS states in the written report.

• The Sisters of Charity of St. Elizabeth, Convent Station, N.J., which owns 2,840 shares of Wal-Mart stock, wants the company to say how it promotes women and minorities or encourages their advancement.

The Sisters ask Wal-Mart to prepare a chart, encompassing the past three years, that lists employees according to their genders and races in nine major employment categories. The Sisters ask the report be done within four months of the annual shareholders' meeting.

Institutional Shareholder Services advises Wal-Mart stockholders to vote for the proposal, because Wal-Mart has faced lawsuits alleging discrimination and does not disclose information about the advancement of women and minorities in the company.

• The United Brotherhood of Carpenters and Joiners of America, Washington, D.C., which owns 69,900 shares of Wal-Mart stock, wants the company to change the way Wal-Mart's board is elected.

The United Brotherhood proposes that the company amend its certificate of incorporation or bylaws to say that the directors shall be elected by a majority of votes cast at the shareholders' annual meeting.

Wal-Mart board members now are elected by a plurality of votes, which means a director can be elected or re-elected by receiving less than 50 percent of votes.

Institutional Shareholder Services advises Wal-Mart stockholders to vote for the proposal.

• Amalgamated Bank of New York City, which owns 1.69 million shares of Wal-Mart stock, wants Wal-Mart's board to consist of more independent directors with no Wal-Mart ties.

Four Wal-Mart directors are current or former executives and a fifth director is the chairman's brother, the proposal states.

The independent directors should not be Wal-Mart executives, be employed or affiliated with a company that's a significant vendor or have service contracts with Wal-Mart or its senior management.

The independent directors also should not have had, within five years, any business relationship that had to be disclosed under federal SEC regulations. Independent directors also could not be related to any person in any positions described above.

Institutional Shareholder Services advises Wal-Mart stockholders to vote against the proposal.

The ISS report states that 71 percent of Wal-Mart's board already is independent, with no company ties, so the proposal is not necessary.

• The International Brotherhood of Teamsters of Washington, D.C., which owns 160 shares of Wal-Mart stock, and another unnamed filer ask the Wal-Mart board to compile a semi-annual report on policies on political donations made with company funds.

Institutional Shareholder Services advises stockholders to vote against the proposal.

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