Wal-Mart, Same-Ol’, Same-Ol

They gathered by the thousands earlier this month (2013.06.06) at the Walton arena on the University of Arkansas campus in Fayetteville. It was the annual meeting of the world’s largest retailer, Wal-Mart. The crowd was largely made up of employees who had earned a trip to Fayetteville from their remote corner of the wonderful world of Wal-Mart through some display of loyalty. There were a few shareholders and high profile performers including Hugh Jackman, who was the meeting’s host. 

Unlike the Wal-Mart employees at the meeting, Jackman and the other celebs were not there at company expense, at least not Wal-Mart’s expense. Given the revenues generated for major motion picture and music companies by Wal-Mart –reportedly as much as 40% of their total income– we’ll guess that the stars were well compensated for their visit to Arkansas by someone.  

The affair was not all glitz, glitter, and company presentations. Time was set aside for participation by the shareholders, fifteen minutes out of the four hours, about 6%. That despite the fact that the shareholders had some serious beefs. Like what have you done about the rampant bribery, the deaths in Bangladesh factories and declining year to year store sales, things like that? Management’s answers? Less than satisfying. Easy for them knowing that the Walton family controls more than half the votes. As long as the family is happy, the management can ignore the rest of the world. 

A shareholder/employee commented on CEO Michael Duke’s nearly $21 million 2012 paycheck: “Times are tough for many Wal-Mart associates. We are stretching our paychecks to support our families.” Considering our low wages, she added, “I don’t think that’s right.” A considerable number of those in the audience cheered and applauded her comment. You can bet those folks won’t get a free ride to next year’s annual meeting, assuming they even keep their jobs.

For his part Duke said, "You operate with integrity, our company was founded on integrity. For Wal-Mart, compliance is an absolute. Make no mistake about it; we will do the right thing." It’s easy to see the disconnect right there. Duke obviously doesn’t understand that the “Right Thing” is not compliance. "The “Right Thing” is the ethical business model. “Compliance” is the letter of the law, working right at the edge of the law; Compliance is what you can get away with.

Compare this annual meeting with one held a month earlier in Omaha, Nebraska, the annual Berkshire Hathaway bash thrown by Warren Buffett. “Buffettpalooza,” as it’s called, attracted more than twice as many people, 35,000, all shareholders, all happily paying their own way. But those are just the surface differences when compared to the Wal-Mart annual meeting. The real difference lies in a culture of transparency at the core of Buffettpalooza, a culture that’s nowhere in sight at Wal-Mart.