SEC to allow shareholder vote on Wal-Mart independent chairman
Wal-Mart Stores Inc (WMT.N) shareholders will vote in June at the company's annual meeting on electing an independent board chairman, after U.S. regulators rejected a request by the retailer to block the proposal.
Efforts the past two years were unsuccessful to unseat current board Chairman Rob Walton, scion of the billionaire family that founded the world's largest retailer.
Because the Walton family controls more than 50 percent of the retailer's shares, outside proposals generally have little chance of passing.
Wal-Mart had argued that the proposal, submitted by the International Brotherhood of Teamsters General Fund, should be omitted because it was vague in its standard of independence.
The U.S. Securities and Exchange Commission rejected that argument, according to a letter from the agency delivered to the fund sponsoring the proposal on Friday.
In its ruling SEC attorney Luna Bloom wrote that the proposal was not "so inherently vague or indefinite" that shareholders and the company would not be able to determine "what actions or measures the proposal requires."
Wal-Mart said it respected the SEC's decision, while noting that it has over the years bolstered independent oversight, including filling its 16-person board with 11 independent members and separating the chairman and CEO roles.
"Wal-Mart has always strived to maintain high corporate governance standards," spokesman Randy Hargrove said.
The Teamsters fund has argued that a chairman without ties to the Walton family and who was independent of management would help improve oversight. It cited ongoing investigations into allegations of bribery in Mexico among the issues that illustrated the need for change.
The independent chairman proposal was supported by 15.4 percent of the vote in 2014, short of the 20 percent to 30 percent threshold that governance experts say can generally prompt a board to seriously consider an issue or take action.
But excluding the Walton block of stock, the measure got 40 percent of the "independent" vote, up from 36 percent in 2013.
Wal-Mart has sought to omit a handful of proposals this year. One calling for disclosure on pay disparity between executives and store workers was dropped by a group of Catholic nuns, SEC records show.
The Sisters of St. Joseph of Carondelet and other co-filers said they had dropped the proposal in part because of Wal-Mart's decision in mid-February to raise its minimum wage.