A Walmart investor who oversees $40 million worth of company shares is pushing ahead to get consideration of a proposal that would link a portion of executive pay to “staff motivation,” according to filings with the Securities and Exchange Commission (SEC) obtained exclusively by Reuters.
The shareholder, Connecticut Treasurer Denise Nappier, has proposed defining staff motivation by the extent to which workers “apply discretionary effort to accomplish organizational goals” and would have the compensation committee use outside experts to measure it as a complement to other metrics that determine senior executives’ incentive pay. Essentially, the idea is to tie executive pay to how happy and productive the company’s low-wage workers are. The proposal is a revised version of one that was supported by labor groups last year but failed to make Walmart’s shareholder ballot.
Walmart announced last week that it would invest $1 billion in raising base wages to $9 an hour by April and $10 by early next year. While Nappier told Reuters that these raises are a “step in the right direction toward investing in human capital,” she still plans to move forward with getting the SEC to allow a vote on her proposal at the company’s annual meeting in June. It would “ensure that Wal-Mart is committed over the long-haul on this important element of sustainable growth,” she said.
The company is fighting to keep her proposal and others off of the ballot. Its lawyers argue that it relates to “ordinary business” matters, which is a common criteria for the SEC to exclude a proposal. It also says what Nappier is calling for has been implemented in other ways, such a diversity and inclusion metric that goes toward determining incentive pay. A spokesman noted that the wage increase is meant to improve employee engagement. Even if it were to come to a vote, the Walton family controls a majority of shares and can easily defeat outside proposals.
But Nappier is not the only shareholder pushing for change at Walmart. Another proposal from a group of Catholic nuns wants the company to disclose the ratio of top executive pay to median store employee pay and explain changes in that gap over time. The SEC proposed a rule that would require all companies to disclose such information, but industry pushback has delayed it. Data show that Walmart has seen the most shareholder ballot proposals related to human capital management over the last decade.
Workers have also been visibly pushing for change at Walmart by holding strikes, sit-ins, and acts of civil disobedience while calling for a $15 minimum wage, better scheduling, and the right to form a union. They welcomed the raises and took credit for pushing the company to increase wages, but they still vow to fight for more. “Especially without a guarantee of getting regular hours, this announcement still falls short of what American workers need to support our families,” said Emily Wells, one of the leaders of Our Walmart, the worker organizing group behind the strikes.