* Thousands of shareholders attend Wal-Mart annual meeting
* Some investors voiced concerns about board; no protesters
* Shareholders elect all company's nominees for board, as
* Wal-Mart stock down 0.4 percent; S&P 500 down 2.2 percent
By Jessica Wohl and Lisa Baertlein
FAYETTEVILLE, Ark., June 1 Wal-Mart Stores Inc
executives told shareholders they would not stand for
unethical behavior at the world's largest retailer, whose shares
have soared to 12-year highs as strong results more than offset
concerns about bribery allegations.
Friday's annual shareholders meeting was the first time that
Chairman Rob Walton, a son of Wal-Mart founder Sam Walton,
publicly addressed the issue of possible bribery in Mexico. Both
he and Chief Executive Mike Duke were named in an April New York
Times report which suggested that Wal-Mart executives knew of
bribes paid to officials in Mexico and squelched an internal
Despite the scandal, Wal-Mart's meeting served largely as a
50th anniversary party. The upbeat event was hosted by actor,
singer and entrepreneur Justin Timberlake and featured
performances from Taylor Swift, Lionel Richie, Celine Dion and
"Acting with integrity is not a negotiable part of this
business. It is our business, we will not tolerate violations of
the FCPA or ethical wrongdoing of any kind," Walton said,
referring to the U.S. Foreign Corrupt Practices Act, which
prohibits bribing foreign officials.
The New York Times reported that management at Wal-Mart de
Mexico, or Walmex, allegedly had orchestrated
bribes of $24 million to help it grow quickly and that
Wal-Mart's top brass had tried to cover it up.
Now, the U.S. Department of Justice, the U.S. Securities and
Exchange Commission and government agencies in Mexico are
investigating the allegations while Wal-Mart conducts an
The allegations in the New York Times piece also have
spawned 11 derivative lawsuits, which seek recovery for the
company rather than shareholders, and one securities lawsuit,
Wal-Mart disclosed in a regulatory filing hours after the events
finished on Friday.
"Let me be clear: Wal-Mart is committed to compliance and
integrity everywhere we operate," Duke said in a forceful tone.
"If you work for Wal-Mart, there is no gray area between
right and wrong. It's either the right thing to do, or it
shouldn't be done at all."
Large pension funds and a scrappy group of employee
shareholders were among those who had called for the removal of
leaders such as Walton and Duke from the board for their alleged
connection to the bribery scandal. But that attempt failed;
every company nominee was elected. The number of shares voted
for and against each of 16 board members will be disclosed on
Monday, Wal-Mart said.
"We have seen what happened with Mexico, when some people
were so focused on growth at any cost they forgot our code of
ethics," said Jackie Goebel, 60, a company employee for 24
Goebel belongs to the Organization United for Respect at
Walmart, which is affiliated with a major grocery union and
spent the last couple of days encouraging stockholders to vote
against Duke and Walton.
Shareholders who tried to oust board members knew their
efforts would only be symbolic since the Walton family controls
roughly half of the retailer's 3.4 billion shares.
Voters also defeated three shareholder proposals.
The meeting was largely upbeat and nostalgic. To start the
early morning affair, the children of founder Sam Walton -- Rob,
along with his younger siblings Jim and Alice -- spoke about the
work they used to do in the stores when the chain got its start.
After the family's comments, Timberlake came out on stage in
a hula skirt. Sam Walton donned such an outfit on Wall Street in
1984 after losing a bet, an event memorialized in a photo shown
on the large screens at the meeting.
BRIBERY SCANDAL REMAINS A CONCERN
Wal-Mart has repeatedly said that it would not comment on
the specific allegations until the investigations are complete.
"The executives have delivered a consistent message
throughout the week about integrity, as well as the opportunity
for growth," said Stewart Samuel, senior analyst with IGD, a
global food and grocery research firm.
The company did not take investor questions during the
meeting. A question-and-answer session held following the formal
shareholders meeting was not open to the media.
Some shareholders believe that current board members,
including Walton, Duke and former CEO Lee Scott, knew about the
Mexico bribery and should have taken corrective action years
ago. Several large U.S. public pension funds, including the
California Public Employees' Retirement System, said they had
planned to vote against certain board members.
Change-seeking shareholders had said the outcome of the
election would not discourage them. No protests were seen at the
meeting itself, though some had been planned in other parts of
"If at first you don't succeed, try, try again," said
Carlton Smith, 51, who works in a Paramount, California, store
and owns Wal-Mart stock. "We'll be back."
One difference from the previous three annual meetings was
that Wal-Mart did not announce a new share repurchase plan. The
company still has $9.7 billion remaining under last year's $15
Wal-Mart stock, holding near 12-year highs, slipped 0.4
percent to close at $65.55, while the broad Standard & Poor's
500 stock index fell 2.5 percent amid concerns over a
disappointing U.S. jobs report and other weak global economic
signals. Wal-Mart shares traded at $53.66 a year ago.
"Many companies are still struggling, but not your company,"
said Chief Financial Officer Charles Holley, adding that sales,
operating income and earnings per share are all growing.
Some 14,000 employees and shareholders attended Friday's
festivities, held in the arena named after James "Bud" Walton,
who helped pay for the basketball facility's construction and
was Sam Walton's brother.