All of the proposals voted on at Walmart’s shareholders’ meeting last Friday were defeated, but the official tally of results filed with the Securities and Exchange Commission last night revealed one proposal that drew a surprisingly large number of votes.
There were 539,951,596 shares voted in favor of a proposal that would give shareholders of 10% of the company’s outstanding shares the power to call a special meeting of shareholders. Walmart had recommended shareholders vote against the proposal on the grounds that the company has appropriate corporate governance provisions in place and the board acts in the best interests of shareholders.
“Permitting shareholders with as little as 10% of the outstanding shares to call special meetings for any reason and at any time could result in special shareholders’ meetings that are not in the best interests of our company and all of its shareholders,” was the rationale the company offered in the proxy statement encouraging shareholders to vote against the proposal. “Holding a special meeting of our shareholders would be a costly undertaking, involve substantial planning, and require us to commit significant resources and attention to the legal and logistical elements of such a meeting.”
While holders of nearly 540 million shares disagreed with that logic, the proposal was nonetheless soundly defeated as holders of 2,369,864,157 shares voted against the special meeting idea. That may sound like a lot, but shareholder votes at Walmart tend to be distorted by the fact that the Walton family holds 1,680,506,739 shares, slightly more than 48% of the total outstanding, and voted against the proposal. Remove those shares from the total and number of votes against the 10% meeting idea drops to 689,357,418, which is a lot closer to the number of shares cast in favor of the proposal. The exercise illustrates the futility of attempting to get Walmart to amend its bylaws by submitting proposals for consideration at the company’s meeting since adoption of any proposal at Walmart will require the support of the Walton family.