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Why Teamsters Present Walmart With A New Challenge

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When the Securities and Exchange Commission rejected a request by Walmart Stores to prevent shareholders from voting on a proposal to elect an independent board chairman at their annual shareholder meeting they were whistling up the wrong tree. The matter will now become part of the proxy for fiscal 2016 to be voted on in early June.

The International Brotherhood of Teamsters General Fund submitted the proposal in an effort to unseat Walton family member, S. Robson (Rob) Walton from a position that he has held for many years. Rob Walton (70) is the oldest son of Sam Walton. He has lead the board with dignity and knowledge. He has experience in strategic planning. He also has extensive legal knowledge though his private law practice and in his former position as Corporate Secretary and General Counsel of Walmart.

In addition, the family holds joint ownership of shares of Walton Enterprises (Walton Family Holding) of about 1,680 Million shares. This is about 51.9% of the 3,240 Million shares outstanding. That is sufficient to block any move by the teamsters. This makes the proposal a waste of time and suggests the teamsters want to be a nuisance.

Of the 16 members of the board 5 members (31%) are insiders. The rest of the board is independent. It is an impressive board that meets about six times a year. In addition committees, such as the audit committee, compensation, nominating and governance committee, strategic planning committee and technology and ecommerce committee give attention to specific company objectives also require board member participation.  It seems to me that Walmart’s board is sufficiently independent and that Walmart shareholders would not be better off without Rob Walton as Chairman.