The annual proxy statement filed with the Securities and Exchange Commission Monday gave an interesting view into how Wal-Mart (NYSE:WMT) conducted its investigation into bribery allegations last year. The retailer stated that it had paid the members of its board’s audit committee more in 2012 than in the previous year because of the extra work created by the foreign bribery probe.
Bribery allegations first materialized after The New York Times published two reports last year that detailed the financial incentives given to Mexican officials by the company’s affiliate, Wal Mart de Mexico. One of the largest was a $52,000 bribe paid to change a zoning map so that the retailer could open a store located near ancient pyramids in Teotihuacan.
Evidence was also uncovered that contradicts statements made by the company after the Times story was published. Wal-Mart executives, including Chief Executive Officer Mike Duke, stated publicly that they knew nothing of the bribery allegation, but documents — including emails — released by congressional Democrats showed otherwise…
In November of 2011, Wal-Mart began its own investigation into the matter, which allegedly violated the U.S. Foreign Corrupt Practices Act. During fiscal 2013 — a period that ended in January — the audit committee met 15 times, as compared to the five or six times the other committees gathered. The full board met only six times, said Wal-Mart in the proxy statement. As a result of the additional meetings, members of the audit committee received an additional $60,000 in compensation, while the committee’s chairman, Christopher Williams, was paid an extra $85,000.
Williams, who has been on Wal-Mart’s board since 2004, earned $189,000 in fees for the last fiscal year, more than any other person on the 15-member board, excluding the management team. The bribery allegations caused some ripples in the boardroom; last year, Williams faced disapproval from many shareholders, but he managed to retain his position during the annual elections, with only 13.3 percent of votes cast against him.
In total, Wal-Mart spent $157 million last year on its investigations into bribery allegations in Mexico, Brazil, China, and India…
Wal-Mart’s proxy letter had other revelations. As Reuters reported, James Breyer — the board’s presiding director — M. Michele Burns, and Arne Sorenson — a member of the audit committee — will be leaving the board. The document also showed that Chief Executive Officer Mike Duke was paid $20.7 million in fiscal 2013, an increase from the previous year’s $18.1 million. His compensation rose alongside a similar growth in sales during the same period, which came despite the sluggish U.S economy. However, Wal-Mart noted in the filing that Duke will only earn a majority of his overall compensation if the company meets certain performance targets.
While sales concerns dog Wal-Mart currently, total sales increased 5 percent to $466.11 billion in the last fiscal year and earnings per share rose 10.6 percent to $5.02 per share.
Meanwhile, labor groups dissatisfied with Wal-Mart’s business practices asked the company Monday to remove Duke and Chairman Rob Walton, the son of the retailer’s founder Sam Walton, from the board. The United Food and Commercial Workers International Union and its OUR Walmart subsidiary told Reuters that letters were sent to Wal-Mart’s global ethics office calling for the resignation of both the CEO and chairman because of “their failure in leadership in preventing the alleged bribery, trying to cover it up,” and not significantly fixing internal problems. The letters were dated April 22, the same date The New York Times published its bribery expose in 2012.
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