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Published on Sat, Jun 09 12:32, Updated at Sat, Jun 09 at 12:41
Source : CNBC-TV18   |   Watch Video :

Where in the world would you find Lionel Ritchie, Justin Timberlake, Taylor Swift & Celine Dion - all in one place at 7 am? No idea? Think Wal-Mart!

A Celebrity opening, a comic skit and a 6 time Grammy award winner's performance... Wal-Mart pulled out all the stops for its 50th shareholder meeting held last week. But not once in those 4 hours did management mention Mexico or bribery says Catherine Dunn reporter with Corporate Counsel

Catherine Dunn
Staff Reporter, Corporate Counsel
"They certainly made reference to the allegations that were made against them, they repeatedly made references to the company's culture of integrity and the legacy of their founder Sam Walton, we saw chairman Rob Walton make references that they wont tolerate violation of the FCPA, which people think could be the issue with the allegations reported by New York Times, but did they use the words bribery or they didn't."

Catherine Dunn
Staff Reporter, Corporate Counsel
"What happened at the meeting was that 3 shareholders presented proposals and each of the 3 rebuked the company and said that their rebukes were in light of the new York Times reporting, so shareholders talked about it at the meeting and in the lead up to the meeting we saw a lot of institutional investors and I am talking of major US pension funds saying that they weren't satisfied with board independence at Wal-Mart & they were going to vote against the directors accordingly."
In April, The New York Times reported on alleged bribery payments made by Wal-Mart de Mexico to obtain construction permits for its stores. The Times said that the senior management quashed an internal investigation. Since that story broke many of Wal-Mart's institutional investors have pushed for board changes.

Catherine Dunn
Staff Reporter, Corporate Counsel
"There are a number of pension funds who are not happy with the number of directors serving on the board who had key oversight positions in the company at a time when these allegations surfaced. So they were looking for some recognition of that and they were going to voice their discontent by voting against directors who they think shouldn't be carrying the company's internal investigation who they don't think have lived up to the expectation of strong oversight."
But at Friday's meeting all 16 directors nominated by the company were re-elected

Catherine Dunn
Staff Reporter, Corporate Counsel
"All of the board directors were re-elected and the shareholders were expecting that because the Walton family controls about half of the stock, but the numbers on Monday were very telling and they showed roughly a 13-15 % disapproval rate among shareholders for key executives including CEO Michael Duke, Chairman Walton, Ex CEO Lee Scott who is also now also a director, 13% may not sound like much for some people but given again that the company owns so much of the stock, those are huge numbers and unprecedented for those executives."

And analysis by the New York City comptroller's office revealed a more than 30% disapproval rating amongst non-Walton family shareholders

Catherine Dunn
Staff Reporter, Corporate Counsel
"I think the institutional investors who already expressed their discontent through their votes are waiting to see if Wal-Mart will respond in a meaningful way by bringing on more independent directors, its not uncommon for a company in this position to bring in a special committee of outside directors who had nothing to do with the corporation before and conduct an internal investigation, Wal-Mart hasn't opted to do that. Shareholders are not happy about that and the company hasn't indicated that it's going to do otherwise."
Thank you Catherine for playing our eyes and ears at the Wal-Mart 50th shareholder conference. Interesting, I thought, to see how one of the largest corporations in the world deals with a bribery scandal and shareholder disapproval.

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