Exclusive: Despite wage hike, some Walmart shareholders seek change

Wed Feb 25, 2015 1:39am EST
 
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By Nathan Layne

(Reuters) - A prominent investor in Wal-Mart Stores Inc (WMT.N: Quote) is pushing ahead with a campaign to link a portion of executive compensation to staff motivation, a sign that the retailer's wage hike last week won't end outside pressure over employee pay and benefits.

Connecticut Treasurer Denise Nappier, whose office oversees $40 million worth of Wal-Mart shares in state pension and trust funds, in December submitted a proposal calling for the incentive pay of senior executives to be tied in part to a measure of "employee engagement", according to previously unreported filings to the Securities and Exchange Commission.

Wal-Mart is fighting to keep this and other select proposals off the ballot for its annual meeting in June, filings show. Because the Walton family controls a majority of shares, outside proposals can be easily defeated even if they are put to a vote, and in any case are usually non-binding.

But even a losing battle could raise pressure on the retailer, potentially leading to compromise.

The proposal by Nappier, a Democrat, shows how some investors are searching for new ways to tackle social issues which they argue are key to a company's financial success. This includes the belief, shared by a growing number of investors of all political stripes, that low-wage employers have underinvested in people to the detriment of long-term returns.

Some are aligned with labor groups fighting for a "living wage" and better conditions at retailers and fast-food chains: Connecticut's proposal is a revised version of a union-supported submission that failed to make the Wal-Mart ballot last year.

In another proposal, a group of Catholic nuns is urging Wal-Mart to disclose a comparison of the pay of top executives to the median store employee wage and explain changes in the gap over time.

Wal-Mart is not the only low-wage employer to face scrutiny over pay. McDonald's Corp (MCD.N: Quote) and other fast-food chains have also been the target of nationwide protests calling for the wage floor to be set at $15 an hour.   Continued...

 
The Walmart logo is pictured at its store in the Porter Ranch section of Los Angeles November 26, 2013.  REUTERS/Kevork Djansezian