NEW YORK — It’s looking like Walmart’s upcoming annual meeting is going to be a bittersweet affair as the company observes its 50th anniversary against the backdrop of an unfolding Mexican bribery scandal and an appeal from a major shareholder this week urging a no vote on five board members.
New York City comptroller John Liu, who oversees five New York City pension funds that hold 5.6 million Walmart shares, is encouraging fellow Walmart shareholders to vote against the re-election of company directors including chairman Rob Walton, president and CEO Mike Duke, former president and CEO Lee Scott, Marriott CEO Arne Sorenson and Christopher Williams, chairman and CEO of the investment bank Williams Capital Group. Liu’s office issued a detailed press release on Tuesday that spells out the rationale for such action, sent a letter to Walmart dated Wednesday, May 2 and then on Thursday Walmart disclosed the letter in a filing with the Securities and Exchange Commission.
“We are taking this extraordinary step in light of the recently reported cover-up in 2005 and 2006 of alleged widespread bribery in Mexico – which occurred at the same time the audit committee was stonewalling repeated shareowner demands for a comprehensive, independent compliance review – as well as our more general concerns with the board’s independence,” Liu wrote in the letter.
Liu was elected comptroller two years ago and essentially functions as the CFO of the City of New York. In that capacity, he is continuing the work begun by is predecessors to promote improved compliance with regulatory affairs at Walmart. Liu contends the board’s audit committee on which Williams and Sorenson serve has failed shareholders based on the New York Times article from April 22, which detailed an alleged scheme of payments to Mexican officials to accelerate store openings.
“The audit committee’s failure with respect to legal and regulatory compliance is especially troubling given that, in three separate letters between May 2005 and May 2006, then-NYC Comptroller William C. Thomps