June 7, 2013 at 2:47 PM ET
Wal-Mart Stores Inc's board approved a $15 billion stock repurchase plan, its first in two years, the world's largest retailer announced at its annual meeting on Friday.
The event at the Bud Walton arena in Fayetteville, Arkansas, is traditionally more of a pep rally for thousands of employees than a typical annual meeting. Shareholders attend, including members of the Walton family, who collectively own just over half of Wal-Mart's shares. But the largest and loudest contingent is 14,000 workers from around the world, including store workers and truck drivers.
Wal-Mart continues to face pressure from some shareholders over issues including the alleged bribery of officials in Mexico and a supposed cover-up reported by the New York Times in 2012, as well as factory safety after industry building catastrophes in Bangladesh. Executives emphasized integrity in their speeches on Friday, echoing comments made at last year's event.
"You operate with integrity, our company was founded on integrity," Chief Executive Mike Duke told the crowd. "For Wal-Mart, compliance is an absolute. Make no mistake about it, we will do the right thing."
This year there were protests by OUR Walmart, a union-backed group that hopes to gain the attention of the Walton family and other shareholders. OUR Walmart wants Wal-Mart to publicly commit to providing full-time work with a minimum wage of $25,000 a year.
Despite the protests, Wal-Mart has continued to increase sales and profit, and its shares have risen.
Still, a 15.4 percent gain in Wal-Mart shares since last year's annual meeting was smaller than a 24.1 percent gain in the Dow Jones Industrial Average, of which Wal-Mart is a component.
As of Thursday, Wal-Mart had about $712 million remaining under a $15 billion share repurchase program announced in June 2011.
Thousands of associates, as Wal-Mart calls its workers, were picked by their peers and managers to attend Friday's meeting and other events throughout the week, including concerts featuring Elton John and country signer Luke Bryan. Friday's meeting was hosted by actor Hugh Jackman and featured performers including John Legend, Kelly Clarkson and Jennifer Hudson. Actor Tom Cruise was also on hand, to praise the company's efforts in areas such as the environment and women's empowerment.
Some 100 OUR Walmart members who work for Wal-Mart came to Arkansas to protest what they say are Wal-Mart's illegal attempts to silence critics who want to see changes.
Wal-Mart employs about 2.2 million people, including 1.4 million in the United States, where it is the largest private employer. It says that its national average wage for full-time hourly workers is $12.67 an hour and has not released other figures. The majority of its hourly associates are full-time workers.
Wages vary in the retail industry, depending on tenure, the type of work done and other factors. According to data from the National Retail Federation, retail wages averaged $13.24 an hour in 2010. At that rate, an employee working 40 hours a week every week would earn $27,539.20 annually.
OUR Walmart, part of the United Food and Commercial Workers International Union, cites IBISWorld data from several years back that showed Wal-Mart associates, on average, earn $8.81 an hour. Its members also complain that they are not scheduled for enough hours, sometimes getting as few as 19 or 22 hours per week. Some Wal-Mart workers use taxpayer-funded programs to support their families.
Members of the family of Wal-Mart founder Sam Walton rank among the richest people in the world. They collectively own roughly 1.67 billion shares of Wal-Mart, or 50.76 percent of the company's outstanding stock.
OUR Walmart does not define itself as a union, although its members do pay $5 monthly dues.
Kalpona Akter, a former garment worker from Bangladesh who presented a defeated shareholder proposal at the company's 2011 annual meeting, joined the OUR Walmart workers to push the company for changes throughout the week. She presented a proposal at Friday's meeting seeking power for owners of 10 percent of outstanding shares to call special meetings. That proposal and three other shareholder proposals were all defeated.
"We have a supply chain out of control, and a failed safety inspection system, in a country (Bangladesh) where apparel workers are dying by the hundreds. Could there be any more pressing case for a special meeting of shareholders?"
The New York City Pension Funds said it would vote its more than 5.1 million shares against nine of Wal-Mart's 14 board nominees - including Chairman Rob Walton and CEO Duke.
It is concerned about what it says has been the board's poor oversight of compliance as well as a lack of overall independence. Last year, the New York City funds opposed the election of five directors.
Copyright 2013 Thomson Reuters.