The UAW Retiree Medical Benefits Trust and Illinois State Board of Investment co-filed a proposal at Wal-Mart Stores Inc., calling for annual disclosure of any recoupment of incentive pay or stock compensation from senior executives as a result of misconduct causing financial harm to the company.
“We believe disclosure of the application of recoupment/forfeiture provisions would encourage ethical conduct and appropriate risk management at Wal-Mart by educating senior executives about behavioral expectations, while discouraging future costly compliance violations by communicating concrete consequences for misconduct,” the proposal states.
“Wal-Mart has mechanisms in place to recoup certain incentive compensation upon a finding of misconduct,” the proposal states, adding, “Wal-Mart never has disclosed whether these recoupment/forfeiture provisions have been applied, making it difficult for shareholders to hold members of the committee accountable for administering the provisions.”
William R. Atwood, executive director of $14.5 billion Chicago-based ISBI, said, “We think this disclosure would be helpful” in encouraging more accountability and making employees aware of the consequences of non-compliance.
Meredith Miller, chief corporate governance officer of the $56 billion UAW Retiree Medical Benefits Trust, Ann Arbor, Mich., couldn't be reached for comment.
Wal-Mart recommends shareholders vote against the proposal, saying, “We already are required by (the Securities and Exchange Commission) disclosure requirements to disclose in our annual proxy statement when compensation has been recouped, and the amount recouped, from our (senior executives),” according to a statement.
The $27.1 billion Connecticut Retirement Plans & Trust Funds, Hartford, Amalgamated Bank LongView Funds and F&C Asset Management joined in co-filing the proposal.
Wal-Mart's annual meeting is June 6.
