When one ponders an extremely powerful American company, Wal-Mart (NYSE: WMT) springs to mind, especially given its ubiquity on the consumer landscape. That's why it's particularly interesting that many shareholders exhibited displeasure with Wal-Mart's top brass amid allegations of bribery in the Mexican market.
Last week it became clear that Wal-Mart was seated squarely on the proverbial hot seat in this year's shareholder voting season. One big sign: Major institutional shareholder CalSTRS had pre-announced its intention to vote against some key members of Wal-Mart's management and board.
As it turns out, a significant number of Wal-Mart shareholders did indeed vote against certain key members of Wal-Mart's leadership. More than 13% of the votes tallied were against the re-election of Wal-Mart CEO Mike Duke, and 15.6% came in against former CEO Lee Scott.
In still more embarrassing votes, Sam Walton's son Robert Walton, who currently serves as Wal-Mart's chairman, suffered 13% of votes against him as well, as did director Christopher Williams.
These percentages may not sound like much, but they're more significant than you think: about half of Wal-Mart's shares are owned by the Walton family, making it impossible for regular shareholders to gain a majority of the votes. Meanwhile, votes against directors are pretty rare in regular proxy voting situations. These votes really should send a message.
Wal-Mart is by no means alone in getting into hot water for possibly having run afoul of international bribery laws. According to Fortune, at least 81 companies were under investigation under the Foreign Corrupt Practices Act as of late April.
Shareholders shouldn't forget their ownership role in public companies, and that they can use their votes to push corporate leaders and directors to exhibit proper ethics at home and abroad. The dirty dealings that go on under corrupt business practices don't add up to good profits or fair competition, and shareholders shouldn't tolerate unethical behavior spoiling the marketplace and soiling American companies' brands.
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