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GOVERNANCE

Proxy access, independent chairman proposals defeated at Wal-Mart’s annual meeting

Shareholder proposals calling for proxy access and an independent board chairman were defeated at Wal-Mart's annual meeting June 2, despite support from several large pension funds.

Only 15% and 26% of shareholders voted in favor of the proxy access and independent chairman proposals, respectively, according to a news release from Wal-Mart Stores Inc.

The $322.3 billion California Public Employees' Retirement System, Sacramento; $206.5 billion California State Teachers' Retirement System, West Sacramento; $189.4 billion Florida State Board of Administration, Tallahassee; C$316.7 billion ($235.4 billion) Canada Pension Plan Investment Board, Toronto; and $133.2 billion Texas Teacher Retirement System, Austin, supported both proposals, according to their proxy-voting disclosures. The C$175.6 billion Ontario Teachers' Pension Plan, however, supported only the proxy-access proposal.

Additionally, all six entities opposed ratifying the compensation of C. Douglas McMillon, Wal-Mart's CEO and president, and four other named executives. However, 83% shareholders supported the executives' compensation.

The total compensation for Mr. McMillon was $22.4 million in 2016, up from $19.8 million in 2015, according to Wal-Mart's 2017 proxy statement. The total compensation for the four other named executives was at or above $6.4 million each.

In a May report, proxy-advisory firm Institutional Shareholder Services recommended that shareholders vote against ratifying the executives' compensation. Among its concerns, ISS said that “short- and long-term incentives were paid above target against non-rigorous goals despite lower year-over-year financial performance.”

In the same report, ISS recommended that shareholders approved the proxy access and independent chairman proposals.