Almost one-third of Wal-Mart Stores Inc.'s non-Walton-family shareholders voted against CEO Mike Duke and three other board members.
The vote at the June 1 annual meeting followed allegations that Wal-Mart executives bribed Mexican officials and came after several pension funds vowed to oppose the re-election of some or all company directors. The founding Walton family controls about 47% of outstanding shares, according to Bloomberg data.
Mr. Duke was re-elected with about 87% of votes in favor, the Bentonville, Ark., company said Monday in a statement. Not counting family shares, Mr. Duke got 70% of the votes. Former CEO Lee Scott received about 84% of votes in favor and Chairman Rob Walton, son of company founder Sam Walton, won about 87% of votes. Not counting family shares, Mr. Walton got 71% of the votes; Mr. Scott 64%.
“Given the family's control, the amount of opposing votes is a big number,” Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, said in a telephone interview. “If there is that much opposition, maybe they need to revisit how the board is comprised.”
Last year, Messrs. Duke, Scott and Rob Walton got more than 99 percent of all votes.
Chris Williams, chairman of the board's audit committee and responsible for oversight of the internal bribery investigation, was re-elected with 87% of all votes and 69% of non-family votes.
Last week, all 15 directors were re-elected and one new director, Marissa Mayer, vice president of local and maps for Google, joined the board.
Pension funds that voted their shares against some or all of the Wal-Mart board included the $229.4 billion California Public Employees' Retirement System, $153.7 billion California State Teachers' Retirement System, $122 billion New York City Retirement Systems, $50 billion Massachusetts Pension Reserves Investment Management board, $37.6 billion Maryland State Retirement & Pension System and the $24.7 billion Connecticut Retirement Plans & Trust Funds.
CalSTRS on May 3 filed lawsuit in Delaware Chancery Court in Wilmington against the Wal-Mart board, claiming it failed to provide proper oversight and seeking corrective action over the alleged shutdown of the bribery investigation.
The votes against the directors should send a message to Wal-Mart that its board needs more independent directors, New York City Comptroller John Liu, the sole trustee of the New York City pension funds, said Monday in a statement.
“The results are a vote of no confidence that sends a message to Wal-Mart's entire board, which has ignored our concerns and failed to safeguard the company's standards of ethical and legal compliance,” Mr. Liu said. “It's up to the board now to restore investor confidence.”