Wal-Mart Stores Inc (WMT.N) shareholders should vote against Chief Executive Michael Duke, former CEO Lee Scott and other board nominees, two influential proxy advisory firms said.
Institutional Shareholder Services and Glass Lewis & Co made their recommendations in the wake of a New York Times report that said that Wal-Mart failed to fully investigate allegations last decade of widespread bribery by company officials in Mexico, a key foreign market for Wal-Mart. The Glass Lewis report was released on Monday and the ISS report came last week.
Scott was CEO during the period of the alleged bribery and Duke was head of Wal-Mart International when the allegations were being looked at by the company.
"If the account in the New York Times is accurate, the decision by Scott and Duke to enable executives implicated in the bribery allegations to conduct the company's investigation into those allegations reflects a staggering lack of judgment," ISS, the largest proxy adviser, wrote in recommending votes against Duke, Scott, chairman Robson Walton and Christopher Williams, chairman of the board's audit committee.
Glass Lewis also recommended shareholders vote against Scott, Duke and Williams, as well as Aida Alvarez, Michele Burns, James Cash, Arne Sorenson. The proxy adviser said that Williams, Alvarez, Burns, Cash and Sorenson served on the audit committee when there was a failure to fully investigate the bribery allegations
Glass Lewis, the second-largest proxy adviser, recommended a vote for Walton.
Also last week, another proxy adviser, Egan Jones, recommended shareholders withhold their votes for Duke and Scott for their role in the bribery allegations.
Wal-Mart has recommended votes in favor of all of the board nominees. The recommendations of the proxy advisory firms may have limited impact, as the family of Wal-Mart founder Sam Walton owns almost 50 percent of the company's stock.
Wal-Mart shares ended up 1 percent to $63.04 on Monday, hitting a fresh 52-week high. The stock plunged 7.5 percent in the two days following the New York times report, but has gained 9.1 percent since then.