Wal-Mart Stores Inc. stressed its strong financial performance this year, and Chairman Rob Walton promised at its annual shareholder meeting to make sure the company acted with integrity.
The comments on Friday came as a Mexican bribery scandal loomed over the world’s largest retailer’s meeting and 50th anniversary party.
“Acting with integrity is not a negotiable part of this business. It is our business, we will not tolerate violations of the FCPA or ethical wrongdoing of any kind,” Mr. Walton said, referring to a U.S. law that bars bribing foreign officials.
The New York Times reported in April that management at Wal-Mart de Mexico, or Walmex, allegedly had orchestrated bribes of $24-million (U.S.) to help it grow quickly and that Wal-Mart’s top brass had tried to cover it up.
The U.S. Department of Justice, the U.S. Securities and Exchange Commission and government agencies in Mexico are investigating the allegations. Wal-Mart is also conducting an internal probe.
Large investors and a scrappy group of employee shareholders are calling for the removal of leaders such as Walton and Chief Executive Officer Mike Duke from the board for their alleged connection to the bribery scandal.
“We have seen what happened with Mexico, when some people were so focused on growth at any cost they forgot our code of ethics,” said Jackie Goebel, 60, a company employee for 24 years. “We have all felt the pain, the scandal and the dishonor that this has brought to our company.”
Ms. Goebel belongs to the Organization United for Respect at Walmart, which is backed by groups including a major grocery union and has spent the last couple of days encouraging stockholders to vote against Mr. Duke and Mr. Walton.
“There are thousands of us who have invested our blood, sweat and tears in this company, and we want to feel proud again,” said Ms. Goebel, who introduced a shareholder proposal that asks for an annual report on incentive compensation programs.
While some people are using the bribery scandal to reignite public debate about Wal-Mart’s business practices, “we haven’t seen that it has had any kind of meaningful impact on the way our shoppers or others look at the company,” Leslie Dach, executive vice president of corporate affairs, told reporters on Thursday afternoon.
Before the meeting started, Wal-Mart woke up the crowd with a band playing songs such as Kool & the Gang’s “Celebration.”
The beginning of the event was upbeat and reflective. The children of founder Sam Walton -- Rob, along with his younger siblings Jim and Alice -- spoke about the work they used to do in the stores when the chain got its start.
After the family’s opening comments, entertainer Justin Timberlake came out on stage in a hula skirt. Sam Walton donned such an outfit on Wall Street in 1984 after losing a bet, an event memorialized in a photo shown on the large screens at the meeting.
Wal-Mart has repeatedly said that it would not comment on the specific allegations until investigations are complete.
Some shareholders believe that current board members, including Chairman Walton, CEO Duke and former CEO Lee Scott, knew about the Mexico bribery and should have taken corrective action years ago.
Several large U.S. public pension funds, including the California Public Employees’ Retirement System, already have signaled plans to vote against certain board members.
The vote is likely to be only symbolic since the Walton family controls roughly half of the retailer’s 3.4 billion shares.
But that has not daunted change-seeking shareholders.
“If at first you don’t succeed, try, try again,” said Carlton Smith, 51, who works in a Paramount, California, store and owns Wal-Mart stock. “We’ll be back.”
At Friday’s meeting, Ms. Goebel introduced a shareholder proposal that calls on Wal-Mart to analyze and report the details of its executive compensation plan.
Wal-Mart’s annual meetings are part business and part entertainment, typically including surprise appearances and performances by celebrities.
Chief Financial Officer Charles Holley started off his presentation by showing the increase in the stock price since last year’s meeting. On June 3, 2011, Wal-Mart traded at $53.66. On Thursday, the shares closed at $65.82.
The stock fell 0.6 per cent to $65.42 in morning trading, while the broad Standard & Poor’s 500 stock index was down 1.5 per cent.
“Many companies are still struggling, but not your company,” Mr. Holley said, adding that sales, operating income and earnings per share are all growing.
Some 14,000 employees and shareholders are attending what often becomes a raucous event, complete with cheering sessions, in the Bud Walton arena named after James “Bud” Walton, who helped pay for the basketball facility’s construction and was Sam Walton’s brother.