| 2 |  | www.walmart.com |
Table of Contents
Dear Fellow Shareholders:Messages from our Chairman and our
Lead Independent Director
We are pleased to invite you to attendjoin us for Walmart’s 20172020 Annual Shareholders’ Meeting on June 2, 20173, 2020 at 8:0010:30 a.m. Central Time. If you planDue to attend, please see page 102 for admission requirements. For those unablethe public health impact of the coronavirus (COVID-19), the 2020 Annual Shareholders’ Meeting will be a completely virtual meeting conducted via webcast. You will be able to join in-person, the meeting will also be webcast athttp://stock.walmart.com.
From Our Chairman
Fiscal 2017 was a year in which we saw the ongoing transformation of Walmart gain momentum. In a new era of disruptionparticipate in the retail industry, we continued to execute our strategy to become the first company to deliver a seamless shopping experience at scale, regardlessvirtual meeting online, vote your shares electronically, and submit questions by visitingwww.virtualshareholdermeeting.com/WMT2020.
Dear Fellow Shareholders: As I did in my letter last year, I’d like to highlight some ways we are driving Walmart’s ongoing transformation, guided by the four key components of our plan to win: | | Dear Fellow Shareholders: As I complete my second year as your Lead Independent Director, I want to emphasize your Board’s ongoing commitment to robust governance and oversight. Continued focus on Board effectiveness now and in the future.As Walmart’s strategy continues to evolve, so will the skills, qualifications, experiences, and backgrounds that the Board seeks in director nominees. Our 12-year term limits for independent directors promote a disciplined director refreshment process, while our robust board evaluation process provides insights into the needs of the Board in the future. We believe that this process has resulted in a diverse and highly skilled Board with the right mix of perspectives, experiences, and tenures to guide us through this period of rapid change, and to provide effective leadership as we continue to serve our communities while protecting our associates and customers during this current global health crisis. We value your feedback.This year marked the sixth year of our expanded shareholder engagement program, and since our last shareholders’ meeting, we invited shareholders representing approximately 570 million Shares, including many of our largest investors, to participate in our outreach program. We ultimately engaged with shareholders representing approximately 525 million Shares, or about 38% of our public float, to discuss strategy, governance, compensation, and sustainability, among other topics. These conversations have contributed to our governance best practices and have helped us continue to enhance our disclosures in this proxy statement to provide investors with the information they seek. Ensuring our compensation practices support our strategy.We are committed to ensuring that our compensation program continues to support our strategy during this period of rapid change. The Board’s Compensation and Management Development Committee regularly reviews the performance metrics used in our incentive plans to ensure that they promote strong operating results and investments that support our ongoing transformation. Over the past several years, the CMDC has introduced greater differentiation to reward high performance, shifted our pay mix to place a greater emphasis on equity ownership, and simplified our long-term incentive awards. You can learn more about our executive compensation program in the CD&A beginning on page 42. Thank you for your investment in Walmart. The Board continues to work to represent your interests and earn your trust. |
 | Make every day easier for busy families; | |  | Sharpen our culture and become more digital; | |
 | Operate with discipline; and | |  | Make trust a competitive advantage. | |
These areas of focus are fundamental in running our business every day, and even more so as Walmart plays an important role during the current global health crisis. Families need us more now than ever. Communities, customers and associates are counting on us. During this challenging time, we are keeping health and safety a priority by making our facilities safer for our associates to work and our customers and members to shop through actions such as increased sanitation, limiting the number of people in stores and clubs, and expanding no-contact pickup and delivery services. We appreciate the gravity of the responsibility we have, and we are grateful and proud of our associates doing extraordinary things to help communities across the globe. We made significant progress against each of the key components of our plan in fiscal 2020. We have continued to expand our U.S. omni-channel platform and now offer grocery pickup at approximately 3,200 locations and grocery delivery at 1,600 locations. We grew Walmart U.S. eCommerce sales by 37% with improved customer satisfaction. Outside of the U.S., we are expanding our ecosystems, with Flipkart and PhonePe scaling quickly in India and same-day delivery in key markets. We continue to innovate in the way we work by becoming more digital and working in small teams to drive innovation – and we’re continuing to invest in our associates’ pay, benefits, tools, and training. We are also finding new ways to leverage the scale and breadth of our operations, bringing technology to life to better serve our customers in a more seamless way. We are committed to earning the trust of our customers, communities, and other stakeholders. Your Board is highly engaged in overseeing our ongoing transformation. We are confident that the Board has the right mix of diverse skills, experiences, and backgrounds to serve as a strategic asset. We are also focused on thoughtful board refreshment, with term limits for independent directors and a robust director succession planning and recruitment process. I am confident your Board is well-positioned to continue to guide us in the years to come. Thank you for your continued support of Walmart, and I encourage you to attend our virtual shareholders’ meeting. Regardless of whether you are able to join us live for the 2020 Annual Shareholders’ Meeting, your views are important to us, and I encourage you to vote your Shares as described on page 102. | |
Sincerely,
Gregory B. Penner
Chairman | |  | | Sincerely,
Thomas W. Horton
Lead Independent Director |  |
Table of how our customers choose to shop with us.
One of our key priorities is to make life easier for busy families, and steps we took in fiscal 2017 – including our acquisition of Jet.com, our strategic alliance with JD.com in China, and our expansion of online grocery and marketplace – provide our customers with more ways to save time and money. Similarly, our significant investments in the wages, training, and opportunity of our U.S. associates have already resulted in a better shopping experience for our customers.
Your Board of Directors has been deeply engaged with, and partnered closely with management on, all of these key strategic decisions. Our majority-independent Board plays a vital role in overseeing our strategy and ongoing transformation, and I firmly believe that your Board, with its broad mix of experience, skills, and backgrounds, is a strategic asset for our company. We are committed to an independent and robust Board and to thoughtful and effective Board refreshment, and have added 7 new directors in the past 5 years. This year, we are excited to announce Carla Harris as a new director nominee. Carla brings deep experience in capital markets and global finance, and I’m confident she will be an asset to the Board and to Walmart.
In these exciting times, Walmart is uniquely positioned to make our customers’ lives easier and deliver sustainable growth in the future. Thank you for your continued support of Walmart, and I look forward to seeing many of you at the meeting in June. Regardless of whether you are able to attend the meeting in person, your vote is important to us. For instructions on how to vote, please see page 103 of this proxy statement.
From Our Lead Independent Director
As Walmart continues to adapt to serve our customers seamlessly – in stores, online, or through pickup or delivery – we are committed to continuously enhancing our Board governance to support our strategy. As described in this proxy statement, we’ve made important changes to the way the Board works to maximize our effectiveness during this period of change.
Last year, we announced that we were reducing the size of the Board while maintaining its independence. More recently, we changed the structure of our Board committees by splitting our Compensation, Nominating and Governance Committee into two separate committees: one focused on executive compensation and management development, and one focused on director nominations and corporate governance. This new structure allows greater focus on aligning our compensation and performance management programs with our strategy, as well as emphasizing our continuing commitment to board refreshment and succession planning.
To further this commitment, beginning in fiscal 2018, our independent compensation committee approved important changes to our executive compensation program to ensure that it continues to support our strategy as we transform our business. You can learn more about these changes in the CD&A on page 46.
Your Board values your feedback and thanks those of you who have participated in our ongoing and extensive shareholder engagement. The feedback from our shareholders has been consistent – they believe in our strategy, and they recognize that we have the right skills, experiences, and backgrounds on our Board to effectively guide Walmart during this exciting period of transformation.
Contents
 Notice of 2020 Annual Shareholders' Meeting | | Sincerely,
Gregory B. Penner
Chairman
 |
How to Attend the Virtual Shareholders’ Meeting
 Virtual Shareholders’ Meeting at:www.virtualshareholdermeeting.com/WMT2020 In light of the COVID-19 outbreak, for the safety of all of our shareholders, associates, and other members of the community, our 2020 Annual Shareholders’ Meeting will be held in a virtual meeting format only with no physical location. Shareholders who held Shares as of the record date may only attend the meeting online by logging in at:www.virtualshareholdermeeting.com/WMT2020on the date and time provided in this notice. You will not be able to attend the meeting in person. The meeting will begin promptly at 10:30 a.m., Central Time on Wednesday, June 3, 2020. Please see pages 101-102 for additional information about how to access, vote, examine the list of shareholders, and submit questions during the meeting. For shareholders of record who are entitled to attend the meeting, the list of shareholders of record will be available atwww.virtualshareholdermeeting.com/WMT2020during the meeting. | | Sincerely,
Dr. James I. Cash, Jr.
Lead Independent Director
The record date for the 2020 Annual Shareholders’ Meeting is April 9, 2020. This means that you are entitled to receive notice of the meeting and vote your Shares held as of that date during the meeting if you were a shareholder of record as of the close of business on April 9, 2020.
|
Items of Business
Letter to Shareholders•Walmart | 2017 Proxy Statement 3
Notice 2017 may also transact any other business properly brought before the 2020 Annual Shareholders’ MeetingMeeting.
How Toto Cast Your Vote 
(page 102)
(PAGE 103)
  | |   | |   | |   | |   |
INTERNETInternet (before the meeting)
www.proxyvote.com | | CALLCall
| | MOBILE DEVICEMobile Device
| | IN PERSONMail
| | MAILDuring the Virtual Meeting
|
www.proxyvote.com | 1-800-690-6903 | Toll-free (U.S.and Canada) at1-800-690-6903 | | Scan the QR codeoncode on your proxy card,notice of internet availability of proxymaterials,proxy materials, or votinginstructionvoting instruction form | | at the 2017 AnnualShareholders’ Meeting | | inMail your signedproxysigned proxy card or votinginstructionvoting instruction form (if you received one) | | Please see pages 101-102 for details about how to attend and vote your Shares during the virtual meeting. |
| Items of Business | | Board
Recommendation | | Reference
Page |
| 1. | To elect as directors the 11 nominees identified in this proxy statement; | | FOR | | 12 |
| 2. | To vote on a non-binding, advisory resolution to establish the frequency of future advisory shareholder votes to approve the compensation of Walmart’s named executive officers; | | 1 YEAR | | 44 |
| 3. | To vote on a non-binding, advisory resolution to approve the compensation of Walmart’s named executive officers; | | FOR | | 45 |
| 4. | To ratify the appointment of Ernst & Young LLP as the company’s independent accountants for the fiscal year ending January 31, 2018; | | FOR | | 91 |
| 5. | To vote on the 3 shareholder proposals described in the accompanying proxy statement, if properly presented at the meeting; and | | AGAINSTeach
shareholder proposal | | 96 |
| 6. | To transact any other business properly brought before the 2017 Annual Shareholders’ Meeting. | | | | 108 |
Annual
Shareholders’
Meeting
Friday, June 2, 2017
8:00 a.m., Central time
Bud Walton Arena
University of Arkansas Campus
Fayetteville, Arkansas 72701
How to Attend the Meeting
If you plan to attend the meeting in person, please see page 102 for admission requirements.
The record date for the meeting is April 7, 2017. This means that you are entitled to receive notice of the meeting and vote your shares at the meeting if you were a shareholder of record as of the close of business on April 7, 2017.
April 20, 2017
23, 2020
By Order of the Board of Directors,
  |
Jeffrey J. Gearhart
Rachel Brand |
| Executive Vice President, Global Governance, Chief Legal Officer, and Corporate Secretary |
TheThis proxy statement and our Annual Report to Shareholders for the fiscal year ended January 31, 2017,2020, are available in the “Investors” section of our corporate website athttp://stock.walmart.com/annual-reports.annual-reports
Walmart | 2017 Proxy Statement5.
| 4 | | www.walmart.com |
Table of Contents
Contents
Walmart| 2017 Proxy Statement 7
| | | Board | | Ref. |
| Items of Business | | Recommendation | | Pages |
| 1. | To elect as directors the 11 nominees identified in this proxy statement; | | FOR | | 12 |
| 2. | To vote on a non-binding, advisory resolution to establish the frequency of future advisory shareholder votes to approve the compensation of Walmart’s named executive officers; | | 1 YEAR | | 44 |
| 3. | To vote on a non-binding, advisory resolution to approve the compensation of Walmart’s named executive officers; | | FOR | | 45 |
| 4. | To ratify the appointment of Ernst & Young LLP as the company’s independent accountants for the fiscal year ending January 31, 2018; and | | FOR | | 91 |
| 5. | To vote on the 3 shareholder proposals described in the accompanying proxy statement, if properly presented at the meeting. | | AGAINSTeach
shareholder proposal | | 96 |
In addition, shareholders may be asked to consider and vote on any other business properly brought before the meeting.
Proxy
Voting Summary
Annual Shareholders’ Meeting
Friday, June 2, 2017
8:00 a.m., Central time
Bud Walton Arena
University of Arkansas Campus
Fayetteville, Arkansas 72701
You have received these proxy materials because the Board is soliciting your proxy to vote your Shares atduring the 20172020 Annual Shareholders’ Meeting. This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider in deciding how to vote your Shares, and you should read the entire proxy statement carefully before voting. Page references (“XX”) are supplied to help you find further information in this proxy statement. Please refer to the Table of Abbreviations beginning on pages 109-110page 109 for the meaning of certain terms used in this summary and the rest of this proxy statement. This proxy statement and the related proxy materials were first released to shareholders and made available on the internet on April 20, 2017.23, 2020.
If you are unable to attend in person, you can view a live webcastShareholders who held Shares as of the 2017 Annual Shareholders’ Meetingclose of business on the record date can attend the virtual meeting athttp://stock.walmart.com.www.virtualshareholdermeeting.com/WMT2020.
8Walmart | 2017 Proxy Statement• Proxy Summary
| | | | | | | |
| PROPOSAL NO. 1
Election of Directors (page 10) | | |
| | | | | | | |
| Board Demographics | | | | | | |
| Gender 27%Female Age 53 yearsNominee Median Age Tenure ●6.6 yearsNominee Median Tenure ●12-year term limitfor Independent Directors ●More than 25%of nominees were appointed in the last 5 years | | Independence ●7 of 11 nominees are independentand 10 of 11 nominees are non-management ●All members of the Audit Committee; Compensation and Management Development Committee; and Nominating and Governance Committee are independent ●Robust Lead Independent Director role | | Highly Engaged Board ●Actively involvedin Walmart’s strategic transformation ●97% overall attendance rate atBoard and Board committee meetings ●5 Board and 24 Board committee meetings during fiscal 2020 | | |
| | | | | | | |
| | | | | | | |
| Relevant Skills and Experience
The nominees possess a balance of distinguished leadership, diverse perspectives, strategic skill sets, and professional experience relevant to our business and strategic objectives, including: | | |
| | | | | | |
| Retail Experience | | Senior Leadership Experience | | |
|  | |  | | |
| Global or International Business Experience | | Finance, Accounting, or Financial Reporting Experience | | |
|  | |  | | |
| Technology or eCommerce Experience | | Regulatory, Legal, or Risk Management Experience | | |
|  | |  | | |
| Marketing or Brand Management Experience | | Board Diversity: Gender or Racial/Ethnic Diversity | | |
|  | |  | | |
| | | | | |
| FOR |  | The Board recommends a voteFOReach director nominee | |
Table of Contents
Proxy Voting Summary
| | | |
| | PROPOSAL NO. 2
Advisory Vote to Approve Named Executive Officer Compensation (page 41) Compensation Aligned with Performance ●Executive compensation program aligned with our strategy and heavily tied to performance ●More than 75% of our CEO’s fiscal 2020 target total direct compensation was based on achieving goals related to operating income, sales, and ROI Fiscal 2020 Total Direct Compensation (at target) | |
| |  | |
| | | |
| | FOR | | The Board recommends a voteFORthis proposal |
| | | | |
| | PROPOSAL NO. 3
Ratification of Independent Accountants (page 80) Quality, Experienced Independent Audit Firm ●Ernst & Young LLP is an independent registered accounting firm with significant experience on Walmart’s audit. ●The firm’s expertise and fees are appropriate for the breadth and complexity of our company’s global operations. |
| | | | |
| | FOR | | The Board recommends a voteFORthis proposal |
| 6 | | www.walmart.com |
Table of Contents
PROPOSAL NO. 4
Approval of an Amendment to the ASDA Sharesave
Plan 2000 (page 85) It has been 10 years since we last asked shareholders to approve additional Shares be available for issuance under the ASDA Sharesave Plan 2000. In order to permit ASDA to continue to grant options under this plan, we are asking our shareholders to approve an amendment that would allow for an additional 10 million Shares to be available for issuance under the plan. | |
FOR The Board recommends a voteFORthis proposal | |
PROPOSALS NO. 5-8
Shareholder Proposals, in each case, if properly
presented at the meeting (page 89) | |
AGAINST Each shareholder proposal included in this proxy statement is followed by Walmart’s response. For the reasons set forth in Walmart’s responses, the Board recommends a vote AGAINST each shareholder proposal, if properly presented at the meeting. | |
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PROPOSAL NO. 1
Election of Directors
| What am I voting on?  |
| You are voting to elect each nominee named below as a director of Walmart for a one-year term. If you return your proxy, your proxy holder will vote your SharesFORthe election of each Board nominee named below unless you instruct otherwise. If the shareholders elect all the director nominees named in this proxy statement at the 2020 Annual Shareholders’ Meeting, Walmart will have 11 directors. Each director nominee named in this proxy statement has consented to act as a director of Walmart if elected. If a nominee becomes unwilling or unable to serve as a director, your proxy holder will have the authority to vote your Shares for any substitute candidate nominated by the Board, or the Board may decrease the size of the Board. |
Overview of Director Nominees and Committee Assignments Seven of our eleven Board Nominee Overviewnominees are independent, and all members of the Audit Committee, the CMDC, and the NGC are independent. Our Board has separated the roles of Chairman and CEO, and we have a robust Lead Independent Director role. Despite their significant Share ownership, only three members of the Walton family serve as non-management Board members.
| | Cesar Conde
Independent Chairman of NBCUniversal Telemundo
Enterprises and NBCUniversal
International Group Age46 |Director Since2019Other Public Company Boards1 | | | Tom Horton
Lead Independent Director Partner, Global Infrastructure Partners; and retired Chairman, American Airlines Age58 |Director Since2014Other Public Company Boards2 |
| | Tim Flynn
Independent Retired Chairman and CEO, KPMG Age63 |Director Since2012Other Public Company Boards3 | | | Marissa Mayer
Independent Co-founder, Lumi Labs Inc.; and Former President and CEO, Yahoo! Inc. Age44 |Director Since2012Other Public Company Boards0 |
| | Sarah Friar
Independent CEO, Nextdoor Inc. Age47 |Director Since2018Other Public Company Boards1 | |
Independence
| |
64% Independent |
| | Carla Harris
Independent Vice Chair, Wealth Management and Head of Multicultural Client Strategy, and Managing Director and Senior Client Advisor, Morgan Stanley Age57 |Director Since2017Other Public Company Boards0 | | Age | 53years
Board Nominee
Median Age 55years
Board Nominee
Average Age |
| 10 | | www.walmart.com |
Table of Contents
Our Board nominees bring a variety of backgrounds, qualifications, skills and experiences that contribute to a well-rounded Board uniquely positioned to effectively guide our strategy and oversee our operations in a rapidly evolving retail industry.
7 of our nominees are independent 2 of our nominees are female 0-3 YEARS 4-6 YEARS 7-10 YEARS MORE THAN 10 YEARS BOARD NOMINEE TENURE BOARD NOMINEE AGE +10 years 7-10 years 0-3 years 4-6 years Board Nominee Tenure Median: 5 years Board Nominee Tenure Average: 7.8 years 70-75 60-69 <50 50-59 Board Nominee Age Median: 54 years Board Nominee Age Average: 53 years Highly Engaged Board Skills and Experience Actively involved in Walmart’s strategy 98% overall attendance rate at Board and committee meetings 41 committee meetings during fiscal 2017 Thoughtful Board Refreshment 12-year term limit for Independent Directors 7 new Directors in the last 5 years Restructured Board committees to promote effectiveness Ongoing Board succession planning All eleven board nominees have global or international business experience Ten have senior leadership experience Four have retail experience Five have regulatory or legal experience Three have marketing or brand management experience Five have finance, accounting or financial reporting experience Five have technology or e-commerce experience
Proxy Summary •Walmart | 2017 Proxy Statement 9
| Highly Engaged Board | | Thoughtful Board Refreshment |
✓Actively involved in Walmart’s strategy ✓97% overall attendance rate at Board and Board committee meetings ✓24 Board committee meetings and 5 Board meetings during fiscal 2020 | | ✓12-year term limit for Independent Directors ✓More than 25% of the nominees were appointed in the last 5 years ✓Board committees structured to promote effectiveness ✓Ongoing Board succession planning |
 Doug McMillon President and CEO, Walmart Age53 |Director Since2013
Other Public Company Boards0
| |
| Steve Reinemund
Independent Managing Partner, Highline Group; Retired Dean of Business, Wake Forest University; and retired Chairman and CEO, PepsiCo., Inc.Age72 |Director Since2010Other Public Company Boards3 | Our Director Nominees
7 of our 11 Board nominees are independent, all members of the Audit Committee, the CMDC, and the NGC are independent, and our key committee chairs are independent. Our Board has separated the roles of Chairman and CEO, and we have a robust Lead Independent Director role. Despite their significant Share ownership, only three members of the Walton family are Board members.
| | | | | | | | | | | | | Key Committee Membership | | Name/Age | | Experience | | Director
Since | | Principal Occupation | | Independent | | Other Pubic
Company Boards | | Audit | | Compensation
& Management
Development | | Nominating
& Governance | | Strategic
Planning
& Compensation | | Technology &
e-commerce | Jim Cash
(69)
Lead Independent Director | | · Senior Leadership · Global/International · Technology/e-commerce · Finance/Accounting | | 2006 | | James E. Robison Professor of Business Administration Emeritus, Harvard Business School | | l | | 1 | | l | | | |  | | | | l | Tim Flynn
(60) | | · Senior Leadership · Global/International · Finance/Accounting · Regulatory/Legal | | 2012 | | Retired Chairman and CEO, KPMG | | l | | 3 | | | | | | | | l | | | Carla Harris
(54) | | · Senior Leadership · Global/International · Finance/Accounting · Regulatory/Legal | | Nominee | | Vice Chairman, Wealth Management, Managing Director and Senior Client Advisor, Morgan Stanley | | l | | 0 | | | | | | | | | | | Tom Horton
(55) | | · Senior Leadership · Global/International · Finance/Accounting · Regulatory/Legal | | 2014 | | Senior Advisor, Warburg Pincus LLC, and retired Chairman and CEO, AMR Corporation | | l | | 1 | | l | | | | l | | l | | | Marissa Mayer
(41) | | · Senior Leadership · Global/International · Technology/e-commerce · Marketing/Brand Management | | 2012 | | President and CEO, Yahoo! Inc. | | l | | 1 | | | | l | | | | | | l | Doug McMillon
(50) | | · Senior Leadership · Retail · Global/International · Technology/e-commerce | | 2013 | | President and CEO, Walmart | | | | 0 | | | | | | | | | | | Greg Penner
(47)
(Board Chairman) | | · Senior Leadership · Retail · Global/International · Technology/e-commerce · Finance/Accounting | | 2008 | | Chairman, Walmart and Partner, Madrone Capital Partners | | | | 0 | | | | | | | | | | | Steve Reinemund
(69) | | · Senior Leadership · Global/International · Marketing/Brand Management | | 2010 | | Retired Dean of Business, Wake Forest University, and retired Chairman and CEO, PepsiCo., Inc. | | l | | 2 | | | | l | | | |  | | | Kevin Systrom
(33) | | · Senior Leadership · Global/International · Technology/e-commerce · Marketing/Brand Management | | 2014 | | CEO and Co-Founder, Instagram | | l | | 0 | | | | l | | | | | | | Rob Walton
(72) | | · Senior Leadership · Retail · Global/International · Regulatory/Legal | | 1978 | | Retired Chairman, Walmart | | | | 0 | | | | | | | | l | | | Steuart Walton
(35) | | · Retail · Global/International · Regulatory/Legal | | 2016 | | CEO, Game Composites, Ltd. | | | | 0 | | | | | | | | l | | |
 | Chair | Greg Penner
Non-Executive Chairman General Partner, Madrone Capital Partners Age50 |Director Since2008
Other Public Company Boards0
| | | Rob Walton Retired Chairman, Walmart Age75 |Director Since1978Other Public Company Boards0 | | | Gender  | 27%
Female | | | Steuart Walton Founder and Chair, RZC Investments Age38 |Director Since2016Other Public Company Boards0 | l | Tenure  | 6.6 years
Board Nominee
Median Tenure 9.3 years
Board Nominee
Average Tenure | |  Audit Compensation and Management Development Nominating and Governance Strategic Planning and Finance Technology and eCommerce ChairMember |
10Walmart | 2017 Proxy Statement• Proxy SummaryTable of Contents
Corporate Governance Highlights
(PAGES 21-43)
• | Majority Independent Board | | | • | Shareholder Right to Call Special Meetings | | | • | Independent Key Committee Chairs | | | • | No Poison Pill | | | • | Separate Chair and CEO | | | • | Lead Independent Director | | | • | No Supermajority Voting Requirements | | | • | Board Oversight of Political and Social Engagement | | | • | Annual Election of All Directors | | | • | Robust Board Evaluations | | | • | Majority Voting for Director Elections | | | • | Board-Level Risk Oversight | | | • | Commitment to Board Refreshment | | | • | Extensive Shareholder Engagement | | | • | Focus on Succession Planning | | | • | Board Oversight of Company Strategy | | | • | Robust Stock Ownership Guidelines | | | • | No Hedging and Restrictions on Pledging | | | • | No Employment Agreements with Executives | | | • | No Change-in-Control Provisions | | | | |
Compensation Aligned With Performance
(PAGES 48-73)
Our executive compensation program is heavily based on performance and aligned with our strategy. More than 75% of our CEO’s fiscal 2017 total direct compensation was based on metrics related to operating income, sales, and ROI, which are aligned with our strategy and important indicators of retail performance. The chart below illustrates the alignment between our CEO’s realized pay and TSR over the last three fiscal years:
CEO Realized Pay
Total Shareholder Return (TSR) CEO Realized Pay 0 5 10 15 20 $19.68 M 0 20 40 60 80 100 120 Jan. 31, 2014 FY15 FY16 FY17 $17.16 M $116.63 $93.60 $100 $96.88 $13.14 M
(1) | Realized pay includes base salary, annual incentive earned for the fiscal year shown, restricted stock vested in the fiscal year shown, and performance equity with a performance period ending during the fiscal year shown. Restricted stock and performance equity is valued using the closing price of Walmart stock on the vesting date. | | | (2) | TSR illustrates the total shareholder return on Walmart common stock during the three fiscal years ending January 31, 2017, assuming $100 was invested on the first day of fiscal 2015 and assuming reinvestment of all dividends. |
Proxy Summary •Walmart | 2017 Proxy Statement 11
Proposal No. 1 Election of Directors | Board Skills Criteria and Qualifications |
Director Skills Criteria and Qualifications
What am I voting on?
You are voting to elect each nominee named below as a director of the company for a one-year term. If you return your proxy, your proxy holder will vote your Shares FOR the election of each Board nominee named below unless you instruct otherwise. If the shareholders elect all the director nominees named in this proxy statement at the 2017 Annual Shareholders’ Meeting, Walmart will have 11 directors. Each director nominee named in this proxy statement has consented to act as a director of Walmart if elected. If a nominee becomes unwilling or unable to serve as a director, your proxy holder will have the authority to vote your Shares for any substitute candidate nominated by the Board, or the Board may decrease the size of the Board.
What qualifications do the Nominating and Governance Committee and the Board consider when selecting candidates for nomination? At Walmart, we believe an effective Board should be made up of individuals who collectively provide an appropriate balance of distinguished leadership, diverse perspectives and viewpoints, strategic skill sets, and professional experience relevant to our business and strategic objectives. The Nominating and Governance Committee (NGC)NGC selects potential candidates on the basis of:of outstanding achievement in their professional careers; broad experience and wisdom; personal and professional integrity; ability to make independent, analytical inquiries; experience and understanding of the business environment; willingness and ability to devote adequate time to Board duties; and such other experience, attributes, and skills that the NGC determines qualify candidates for service on the Board. The NGC also considers whether a potential candidate satisfies the independence and other requirements for service on the Board and its committees, as set forth in the NYSE Listed Company Rules and the SEC’s rules. Additional information regarding qualifications for service on the Board and the nomination process for director candidates is set forth in the NGC’s charter and our Corporate Governance Guidelines, which are available on the Corporate Governance page of our website athttp://stock.walmart.com.stock.walmart.com/investors/corporate-governance/governance-documents. Director Skills Criteria: Walmart is moving with speed to better serve our customers and pursue our key objectives of making every day easier for busy families, sharpening our culture and becoming a more digital, enterprise, delivering results and operating with discipline, and being the most trusted retailer.making trust a competitive advantage. Depending on the current composition of the Board and Board committees and expected future turnover on our Board, the NGC generally seeks director candidates with experience, skills, or background in one or more of the following areas: STRATEGY | | GOVERNANCE | | LEADERSHIP | | DIVERSITYExperience and Skills Relevant to the Successful Oversight of our Strategy |   | |  | |  | |  | |  | Retail | | Global/International | | Regulatory/Legal | | Senior Leadership | | Diversity | | | | | | | | | |  | |  | |  | | | | | Technology/e-commerce | | Marketing/Brand Management | | Finance/Accounting | | | | |
12Walmart | 2017 Proxy Statement•Proposal No. 1: Election of Directors
Strategy |  | | Retail Experience
As the world’s largest retailer, we seek directors who possess an understanding of financial, operational, and strategic issues facing large retail companies. | | | |   | | Global or International Business Experience
As a global organization, directorsDirectors with broad international exposure provide useful business and cultural perspectives, and as a global organization, we seek directors with experience at multinational companies or in international markets. |
LeadershipExperience and Skills Relevant to Effective Oversight and Governance |  |  | Senior Leadership Experience
Directors who have served in relevant senior leadership positions bring unique experience and perspective. We seek directors who have demonstrated expertise in governance, strategy, development, and execution. |
Governance |  | |  | Finance, Accounting, or FinancialReporting Experience
We value an understanding of finance and financial reporting processes because of the importance our company places on accurate financial reporting and robust financial controls and compliance. We also seek to have multiple directors who qualify as audit committee financial experts. |
| | |   | | Regulatory, Legal, or Risk Management Experience
Our company’s business requires compliance with a variety of regulatory requirements across a number of federal, state, and international jurisdictions. Our Board values the insights of directors who have experience advising or working at companies in regulated industries, and it benefits from the perspectives of directors with governmental, public policy, legal, and risk management experience and expertise.
|
Diversity |  |  | Board Diversity
Diversity and inclusion are values embedded in our culture and fundamental to our business. We believe that a board comprised of directors with diverse backgrounds, experiences, and perspectives and viewpoints improves the dialogue and decision-making in the board room and contributes to overall Board effectiveness. The Board assesses the effectiveness of its approach to Board diversity as part of the Board and committee evaluation process. |
| 12 | | www.walmart.com |
Table of Contents
Proposal No. 1:1 Election of Directors•Walmart | 2017 Proxy Statement 13
Summary of Director Nominee Qualifications and Experience The chart below identifies the balance of skills and qualifications each director nominee brings to the Board. The fact that a particular skill or qualification is not designated does not mean the director nominee does not possess that particular attribute. Rather, the skills and qualifications noted below are those reviewed by the NGC and the Board in making nomination decisions and as part of the Board succession planning process. We believe the combination of the skills and qualifications shown below demonstrates how our Board is well positioned to provide strategic advice and effective oversight and strategic advice to our management. | Experience and Skills Relevant
to the Successful Oversight of
our Strategy | Experience and Skills
Relevant to Effective
Oversight and Governance | |  |  |  |  |  |  |  | | Director Nominee | Retail | Global or
International
Business | Technology or
eCommerce | Marketing
or Brand
Management | Senior
Leadership | Finance,
Accounting,
or Financial
Reporting | Regulatory,
Legal, or Risk
Management |  | Cesar Conde | |  | | |  | | |  | Tim Flynn | | | | | | | |  | Sarah Friar | | | | | | | |  | Carla Harris | | | | | | | |  | Tom Horton | | | | | | | |  | Marissa Mayer | | | | | | | |  | Doug McMillon | | | | | | | |  | Greg Penner | | | | | | | |  | Steve Reinemund | | | | | | | |  | Rob Walton | | | | | | | |  | Steuart Walton | | | | | | | | | TOTAL | |  |  |  |  |  |  |  |
Table of Contents | | Leadership | Strategy | Governance | | |  |  |  |  |  |  |  | | | Senior Leadership | Retail | Global or
International | Technology or
e-commerce | Marketing
or Brand | Finance,
Accounting, | Regulatory or
Legal | | Director | | | Business | | Management | or Financial
Reporting | | | Jim Cash | l | | l | l | | l | | | Tim Flynn | l | | l | | | l | l | | Carla Harris | l | | l | | | l | l | | Tom Horton | l | | l | | | l | l | | Marissa Mayer | l | | l | l | l | | | | Doug McMillon | l | l | l | l | | | | | Greg Penner | l | l | l | l | | l | | | Steve Reinemund | l | | l | | l | | | | Kevin Systrom | l | | l | l | l | | | | Rob Walton | l | l | l | | | | l | | Steuart Walton | | l | l | | | | l | | TOTAL | 10 | 4 | 11 | 5 | 3 | 5 | 5 |
14Walmart | 2017 Proxy Statement•Proposal No. 1:1 Election of Directors
| Director Nominees for 2020 |
| | | | FOR | |
| | | The Board recommends that shareholders voteFOReach of the nominees named below for election to the Board. |
Director Nominees for 2017
Who are the 20172020 director nominees? Based on the recommendation of the NGC, the Board has nominated the following candidates for election as directors at the 20172020 Annual Shareholders’ Meeting. Each nominee was previously elected by our shareholders at the 2019 Annual Shareholders’ Meeting. The information provided below includes, for each nominee, his or her age, principal occupation and employment during the past five years, the year in which he or she first became a director of Walmart, each Board committee on which he or she currently serves, whether he or she is independent, and directorships of other public companies held by each nominee during the past five years.  FORCesar Conde
| The Board recommends that shareholders voteFORIndependent Director each of the nominees named below for election to the Board. |
 | James I. Cash, Jr.Age:46
Lead Independent Director
| | | | | | Joined the Board:20062019 Board Committees:
Audit
TeCC Age:69
| | Board Committees
• Audit
• Executive
• NGC (Chair)
• TeCC
| | Other Current Public
Company DirectorshipsDirectorships:
PepsiCo, Inc. |
Career Highlights |  | Chubb Limited
Since October 2015Chairman of NBCUniversal Telemundo Enterprises and NBCUniversal International Group, part of a global media and entertainment company |
| | | October 2013 to October 2015Executive Vice President of NBCUniversal, including oversight of NBCUniversal International and NBCUniversal Digital Enterprises |
| | 2009 to 2013President of Univision Networks, a leading American media company with a portfolio of Spanish language television networks, radio stations, and digital platforms |
| | 2003 to 2009Variety of senior executive capacities at Univision Networks, where he is credited with transforming it into a leading global, multi-platform media brand |
| | 2002 to 2003White House Fellow for Secretary of State Colin L. Powell from 2002–2003 |
| | Prior to 2002Positions at StarMedia Network, the first internet company focused on Spanish- and Portuguese-speaking audiences globally |
Dr. Cash is the James E. Robison Professor of Business Administration Emeritus at Harvard Business School, where he served from July 1976 to October 2003. Dr. Cash served as the Senior Associate Dean and Chairman of HBS Publishing and Chairman of the MBA Program while on the faculty of the Harvard Business School. Dr. Cash holds an advanced degree in accounting and computer science andFurther Information
Mr. Conde has been published extensively in accounting and information technology journals. He currently provides executive development and consulting services through The Cash Catalyst, LLC, which he formed in 2009. He has served
as a director of Chubb Limited since its acquisition in January 2016 and had previously served on the board of its predecessor, The Chubb Corporation,directors of PepsiCo, Inc. since 1996. Dr. CashMarch 2016, and from August 2014 to April 2019 he served on the board of directors of Owens Corning. He also is a Trustee of the Aspen Institute and the Paley Center for Media, as well as a Full Member at the Council on Foreign Relations, and he has served as a directorYoung Global Leader for the World Economic Forum. Mr. Conde holds a B.A. with honors from Harvard University and an M.B.A. from the Wharton School at the University of a number of other public companies, including General Electric Company from April 1997 to April 2016, Phase Forward Incorporated from October 2003 to May 2009, and Microsoft Corporation from May 2001 to November 2009, and has served on the audit committees of several public companies. He also serves as a director of several private companies.
Pennsylvania.
SKILLS ANDSkills and Qualifications
QUALIFICATIONS
|  | The Board benefits from Mr. Conde’s broad experience with large media companies that produce and distributehigh-quality contentacross a range of broadcast, cable, anddigital platforms. | Dr. Cash | Mr. Conde bringsfinancial,accounting, andriskmanagementexpertise from his distinguished career valuable perspectives in academia,business, finance, and from hisleadershippositions at HBS Publishing and Harvard Business School, as well as his service on the boards of directors and audit committees of other large, multinational public companies. | | Dr. Cash brings aglobal perspectivemedia gained from his service on boards of large, multinational companiesexperience in a variety of industries.
The Board benefits from Dr. Cash’s unique knowledge ofinformation technologysenior leadership,roles at large,global media companies.
|  | With his experience at large,multi-platform mediacompanies such as well as his experiences gained from consulting activitiesNBCUniversal and service on the boards of directors of technology companies.Univision, Mr. Conde brings valuable perspective and experience regardingconsumerandmedia landscapes. |
| 14 | | www.walmart.com |
Table of Contents Proposal No. 1:1 Election of Directors•Walmart | 2017 Proxy Statement 15  |  Timothy P. Flynn
Independent Director Age:63 Independent Director
| | | | | | Joined the Board:2012 Board Committees:
Audit (Chair)
TeCC Age:60
| | Board Committees
• Audit Committee (Chair)
• SPFC
| | Other Current Public
Company DirectorshipsDirectorships:
JPMorgan Chase & Co.
Alcoa Corporation
UnitedHealth Group Incorporated
|
Career Highlights | | | 2007 to 2011Chairman of KPMG International (“KPMG”), a global professional services organization that provides audit, tax, and advisory services |
| | 2005 to 2010Served as Chairman of KPMG LLP in the U.S., the largest individual member firm of KPMG |
| | 2005 to 2008CEO of KPMG LLP |
| | Prior to 2005Held various leadership roles at KPMG, including as Global Head of Audit, and Vice Chairman, Audit and Risk Advisory Services, with operating responsibility for Audit, Risk Advisory and Financial Advisory Services practices |
Mr. Flynn was the Chairman of KPMG International (“KPMG”), a global professional services organization that provides audit, tax, and advisory services, from 2007 until his retirement in October 2011. From 2005 until 2010, he served as Chairman and from 2005 to 2008 as CEO of KPMG LLP in the U.S., the largest individual member firm of KPMG. Prior to serving as Chairman and CEO of KPMG LLP, Mr. Flynn was Vice Chairman, Audit and Risk Advisory Services, with operating responsibility for Audit, Risk Advisory and Financial Advisory Services practices. Further Information
Mr. Flynn joined the boards of Alcoa Corporation in November 2016 and UnitedHealth Group Incorporated in January 2017. He also has
served as a member of the board of directors of JPMorgan Chase & Co. since 2012. He previously served as a member of the board of directors of The Chubb Corporation from September 2013 until its acquisition in January 2016. He has been a director of the International Integrated Reporting Council since September 2015, and healso previously served as a trustee of the Financial Accounting Standards Board, a member of the World Economic Forum’s International Business Council, and was a founding memberdirector of The Prince of Wales’the International Integrated Reporting Committee.Council. Mr. Flynn graduated from Thethe University of St. Thomas, St. Paul, Minnesota and is a member of the school’s board of trustees.
Skills and Qualifications
SKILLS AND
QUALIFICATIONS
 | | Mr. Flynn has overmore than 32 years of experience inrisk management,financial services, financial reporting, and accounting. | | | |  | Mr. Flynn also brings extensive experience with issues facing complex,globalcompanies, and expertise inaccounting, auditing,risk management, andregulatoryaffairs for such companies. | | | |  | In addition, Mr. Flynn brings his experiences inexecutive leadership positions at KPMG and his service on the boards of directors of other large public companies. |
 Sarah J. Friar
Independent Director Age:47 Joined the Board:2018 Board Committees:
Audit
SPFC (Chair) Other Current Public Company Directorships:
Slack Technologies, Inc. |
Career Highlights | | December 2018 to presentCEO of Nextdoor Inc., the neighborhood hub for trusted connections and the exchange of helpful information, goods, and services |
| | July 2012 to November 2018CFO of Square, Inc., a provider of commerce solutions, including managed payments and point-of-sale systems for businesses and mobile financial offerings for consumers |
| | May 2011 to June 2012Senior Vice President of Finance & Strategy at Salesforce.com, Inc. |
| | 2002 to 2012Various positions at The Goldman Sachs Group, Inc. including as a Managing Director in the Equity Research Division and other various positions where she focused on corporate finance, and mergers and acquisitions |
| | Prior to 2002McKinsey & Company |
Further Information
Ms. Friar has served as a director of Slack Technologies, Inc., the leading channel-based messaging platform, since March 2017. She also previously served on the board of directors of New Relic, Inc., a software analytics company, from December 2013 until April 2018, and Model N, Inc. from September 2012 until May 2015. Ms. Friar is the co-founder of Ladies Who Launch, a non-profit organization focused on empowering female entrepreneurs. Ms. Friar is a Fellow of the inaugural class of the Finance Leaders Fellowship Program and a member of the Aspen Global Leadership Network. Ms. Friar graduated from the University of Oxford with a Master of Engineering in Metallurgy, Economics, and Management and also from Stanford Graduate School of Business with an M.B.A. Skills and Qualifications  | Ms. Friar bringsfinancial,accounting, andrisk managementexpertise as the former CFO of a multinational publicly-traded company and from her prior experience with a multinational investment banking firm. | | |  | The Board benefits from herleadership experience as the CEO of a large platform that connects neighbors and her prior experience as the CFO of a publicly-traded company and other various leadership positions at Square, Salesforce.com, and Goldman Sachs. | | |  | Ms. Friar brings aglobal perspective gained from her experience as the CEO of a multinational company that supports customers across a variety of businesses and industries. | | |  | The Board also benefits from Ms. Friar’s perspective regardingeCommerce andinformation technology in light of her leadership positions with digital community based platforms and a publicly-traded company that provides managed payments and point-of-sale systems for businesses and mobile financial offerings for consumers. |
Table of Contents Proposal No. 1 Election of Directors  | | Carla A. Harris Independent Nominee
| | | | | | Independent Director | | Age: 57 | Joined the Board:Nominee
Board: 2017 | Age:54 | | Board Committees :
CMDC
NGC
SPFC | • N/A | | Other Current Public
Company Directorships:
None |
Career Highlights None
|  | August 2013 to presentVice Chair, Wealth Management and Head of Multicultural Client Strategy for Morgan Stanley, a multinational investment bank and financial services company |
| | June 2012 to presentManaging Director and Senior Client Advisor for Morgan Stanley |
| | Since 1987Member and a leader on execution teams across mergers and acquisitions, equity capital markets and asset management, and has held a number of other positions during her tenure with Morgan Stanley |
Ms. Harris has served as the Vice Chair, Wealth Management forFurther Information
In her current roles at Morgan Stanley, since August 2013, and as Managing Director and Senior Client Advisor since June 2012. In these roles, sheMs. Harris is responsible for increasing client connectivity and penetration to enhance revenue generation across the firm. Ms. Harris joined the mergers and acquisitions team atHer prior experience with Morgan Stanley in 1987 and since then has held a number of positions during her tenure. Her experiences at Morgan Stanley range fromincludes investment banking,
equity capital markets, equity private placements, and initial public offerings in a number of industries such as technology, media, retail, telecommunications, transportation, healthcare, and biotechnology. In August 2013, President Obama appointed Ms. Harris to serve as Chair of the National Women’s Business Council. She currently serves on the boards of several non-profit organizations including St. Vincent’s HealthCare and the Morgan Stanley Foundation.
Foundation, as well as a member of the Board of Overseers for Harvard University. Ms. Harris holds a B.A. magna cum laude from Harvard University and also holds an M.B.A. from Harvard Business School.
SKILLS ANDSkills and Qualifications
QUALIFICATIONS
|  | | Ms. Harris brings broad-based and valuable insights infinance andstrategygained from more than 30 years of experience at a prominentglobal investment bankingfirm. | | | |  | The Board would benefitbenefits from Ms. Harris’ seniorleadership experienceat Morgan Stanley. | | | |  | The Board values Ms. Harris’ extensive work experience in aregulatedindustryand advising clients across a broad range of other regulated industries. |
16Walmart | 2017 Proxy Statement•Proposal No. 1: Election of Directors
 | Thomas W. Horton Independent Director
| | | | | | Lead Independent Director | | Age: 58 | Joined the Board:Board: 2014 | Age:55 | | Board Committees :
Audit
Executive Committee
NGC (Chair)
SPFC | • Audit• NGC
• SPFC
| | Other Current Public
Company Directorships:
General Electric Company
EnLink Midstream, LLC |
Career Highlights QUALCOMM Incorporated
| | April 2019 to presentPartner, Global Infrastructure Partners, a global infrastructure investment firm |
| | October 2015 to April 2019Senior Advisor at Warburg Pincus LLC, a private equity firm focused on growth investing |
| | December 2013 to June 2014Chairman of American Airlines Group Inc. (“American”) |
| | 2011 to 2013Chairman and CEO of American |
| | 2010 to 2011President of American |
| | 2006 to 2010Executive Vice President of Finance and Planning at American |
| | 2002 to 2005Served in various roles at AT&T Corporation, including as Vice Chairman and CFO. While at AT&T, Mr. Horton led the evaluation of strategic alternatives that ultimately led to the combination of AT&T and SBC Communications, Inc. |
| | 1985 to 2002Served in various roles at American, including as Senior Vice President and CFO |
Mr. Horton has served as a Senior Advisor at Warburg Pincus LLC, a private equity firm focused on growth investing, since October 2015.Further Information
In August 2019, Mr. Horton was appointed to the Chairmanboard of American Airlines Group Inc. (“American”) from December 2013 to June 2014.directors of EnLink Midstream, LLC, a portfolio company of Global Infrastructure Partners that provides midstream energy services. He also served in other executive leadership positions at American, including as President from 2010 until his appointment as Chairman and CEO in 2011, during which time he led the company through a successful restructuring and turnaround that culminated in the 2013 merger with US Airways, creating the world’s largest airline. From 2006 to 2010, Mr. Horton served as Executive Vice President of Finance and Planning at American. Mr. Horton joined American
from AT&T Corporation, where he served in various roles between 2002 and 2005, including as Vice Chairman and as Chief Financial Officer. While at AT&T, Mr. Horton led the evaluation of strategic alternatives that ultimately led to the combination of AT&T and SBC Communications, Inc. Mr. Horton joined AT&T from American, where he had served in various roles from 1985 until 2002, including as Senior Vice President and Chief Financial Officer. He has served on the board of directors of General Electric Company since April 2018, where he has served as Lead Director since October 2018. From 2008 to March 2019, Mr. Horton served on the board of directors of QUALCOMM Incorporated since 2008, andIncorporated. Mr. Horton also serves on the executive board of the Cox School of Business at Southern Methodist University.
SKILLS ANDSkills and Qualifications
| | QUALIFICATIONSMr. Horton brings unique insights gained from his
| | | |  | Our Board benefits from Mr. Horton’s leadership experience in several complex,international industries. | | |  | In addition, Mr. Horton brings valuable perspective developed from more than 30 years of experience infinance,accounting, auditing, andrisk management. |
| 16 | | | Our Board benefits from Mr. Horton’s leadership experience in several complex,international industries. | | In addition, Mr. Horton brings unique insights gained from hisexecutive leadershiproles at large,global, publicly-traded companies.www.walmart.com |
Table of Contents Proposal No. 1 Election of Directors   | Marissa A. Mayer Independent Director
| | | | | | Independent Director | | Age: 44 | Joined the Board:Board: 2012 | Age:41 | | Board Committees :
CMDC
TeCC | • CMDC• TeCC
| | Other Current Public
Company Directorships:
None |
Career Highlights | | March 2018 to presentCo-founder and CEO of Lumi Labs Inc., a technology incubator focused on consumer internet technologies |
| | July 2012 to June 2017President and Chief Executive Officer and a member of the board of directors of Yahoo! Inc. (“Yahoo”) (now Altaba Inc.). At Yahoo, she led the internet giant’s push to reinvent itself for the mobile era. With a renewed focus on user experience, Ms. Mayer grew Yahoo to serve over 1 billion people worldwide - with over 600 million mobile users - and transformed its advertising approach |
Ms. Mayer is the President and Chief Executive Officer and a member of the board of directors of Yahoo! Inc. (“Yahoo”). Since joining Yahoo in July 2012, Ms. Mayer has led Yahoo’s focus as a guide to digital information discovery through search, communications, and digital content products. Ms. Mayer also helmed Yahoo’s digital advertising strategy across mobile, video, native, and social. Under her leadership, Yahoo has grown to serve over 1 billion users worldwide, with over 600 million mobile users. Prior to her role at Yahoo, Ms. Mayer spent 13 years at Google Inc. (“Google”) where she led various initiatives
including Google Search for more than a decade, and other early stage products such
| 1999 to 2012Led Google Search for more than a decade, as well as Google Maps, Gmail, and Google News. She was one of Google’s earliest employees, later moving into leadership roles as a member of their Operating Committee. | Further Information
In July 2019, Ms. Mayer joined the board of directors of Go Forward, Inc., a company that combines virtual and in-person primary care practice. Since April 2019, Ms. Mayer has served on the board of directors of Maisonette, LLC, an online company focused on providing customized shopping experiences in children’s luxury brands and boutique clothing, accessory, and home decor items. From March 2013 until October 2016, Ms. Mayer served on the board of directors for AliphCom, which operated as Jawbone. She also serves on the boards of the San Francisco Museum of Modern Art and the San Francisco Ballet, and she previously served on the foundation board for the Forum of Young Global Leaders at the World Economic Forum from 2013 to 2019. Ms. Mayer holds a bachelor’s degree in symbolic systems and a master’s degree in computer science from Stanford University. From March 2013 until October 2016, Ms. Mayer served on the board of directors for AliphCom, which operates as Jawbone. She also serves on the boards of the San Francisco Museum of Modern Art, the San Francisco Ballet, and the foundation board for the Forum of Young Global Leaders at the World Economic Forum.
SKILLS ANDSkills and Qualifications
QUALIFICATIONS
|  | | Ms. Mayer brings extensive expertise and insight into thetechnology andconsumer internetindustries, and hersenior leadership experienceexperience is demonstrated by her executive role at a prominent consumer internet company and her positions on the boards of several non-profit organizations. | | | |  | Ms. Mayer brings distinguished experience ininternet product development, engineering, andbrand managementmanagement.. | | | As | | The Board values Ms. Mayer’s insights intoglobal businessand strategy gained from her experience as the CEO of a global company, Ms. Mayer brings insights intoglobalcompany.businessand strategy. |
Proposal No. 1: Election of Directors•Walmart | 2017 Proxy Statement 17
 | C. Douglas McMillon | President and Chief Executive Officer | CEO and Director | Age: 53 | Joined the Board:Board: 2013 | 2013Age:50
| | Board Committees • :
Executive Committee (Chair)
| • GCC (Chair) | | Other Current Public
Company Directorships:
None None
| |
Career Highlights | | | February 1, 2014 to presentPresident and CEO of Walmart |
| | | February 2009 to January 31, 2014Executive Vice President, President and CEO, Walmart International |
| | | August 2005 to January 2009Executive Vice President, President and CEO, Sam’s Club |
| | Prior to 2005Mr. McMillon has held a variety of other leadership positions since joining our company more than 29 years ago |
Mr. McMillon is the President and CEO of Walmart and has served in that position since February 1, 2014. Prior to this appointment, he held numerous other positions with Walmart, including Executive Vice President, President and CEO, Walmart International, from February 1, 2009 through January 31, 2014, and Executive Vice President, President and CEO, Sam’s Club, from August 2005 through January 2009. Further Information
Mr. McMillon has held a variety of other leadership
positions since joining our company more than 25 years ago. Mr. McMillon also servesserved as a member of the executive committee of the Business Roundtable since 2014, and he became the chairman of the Business Roundtable in January 2020. He also serves as a member of the boards of directors of a number of organizations, including The Consumer Goods Forum, The US-China Business Council, and Crystal Bridges Museum of American Art.
SKILLS ANDSkills and Qualifications
QUALIFICATIONS
| | | Mr. McMillon brings years ofexecutive leadership experienceexperience at our company and extensive expertise in corporate strategy, development, and execution. | | | | | In addition, Mr. McMillon brings extensive knowledge and unique experience with the Walmartleading Walmart’sInternationalsegment. | | | |  | The Board benefits from Mr. McMillon’s more than 2529 years ofretail experienceand his leadership role developing and executing our enterprise strategy to deliverseamless shoppingseamlessly integrateat scale.our retail stores and eCommerce in anomni-channel offering. |
 |
Table of Contents Proposal No. 1 Election of Directors 
| Gregory B. Penner*Chairman
| Penner* | Non-Executive Chairman | | Age: 50 | Joined the Board:Board: 2008 | 2008Age:47
| | Board Committees • :
Executive Committee
| • GCC | | Other Current Public
Company Directorships:
None None
| | *Greg Penner is the son-in-law of Rob Walton. |
Career Highlights | | | June 2015 to presentChairman of the Board of Walmart |
| | | June 2014 to June 2015Vice Chairman of the Board of Walmart |
| | | 2005 to presentGeneral Partner of Madrone Capital Partners, LLC, an investment management firm |
| | 2002 to 2005Walmart’s Senior Vice President and CFO – Japan |
| | 2001 to 2002Senior Vice President of Finance and Strategy for Walmart.com |
| | Prior to 2001General Partner at Peninsula Capital, an early stage venture capital fund, and a financial analyst for Goldman, Sachs & Co. |
Further Information
Since August 2018, Mr. Penner was appointedhas served on the board of directors of a mobile premium video subscription platform that operates as Chairman of the Board in June 2015, after serving as Vice Chairman of the Board from June 2014 to June 2015. He has been a General Partner of Madrone Capital Partners, LLC, an investment management firm, since 2005. From 2002 to 2005, he served as Walmart’s Senior Vice President and CFO – Japan, and before serving in that role,Quibi. Mr. Penner was the Senior Vice President of Finance and Strategy for Walmart.com from 2001 to 2002. Prior to working for Walmart, Mr. Penner was a General Partner at Peninsula Capital, an early stage venture capital fund, and a financial analyst for Goldman, Sachs & Co. Mr. Penneralso previously served as a member of the board of directors of Baidu, Inc. from May 2004 until FebruaryDecember 2017, and he also previously served on the boardsboard of Hyatt Hotels Corporation; eHarmony, Inc.; Castleton Commodities International, LLC; 99Bill Corporation; and Cuil, Inc.
Corporation from October 2007 to September 2014.
SKILLS ANDSkills and Qualifications
QUALIFICATIONS
|  | | Mr. Penner brings expertise instrategic planning,finance, andinvestment matters, including prior experience as a CFO infor our company’s operations in Japan, and his service on the boards of directors of public and private companies in a variety of industries. | | | |  | The Board benefits from Mr. Penner’sretailexperiences with our company’s operations in Japan and at Walmart.com, as well as hisleadershipservice as our non-executive Chairman. | | | | | In addition, Mr. Penner has broad knowledge ofinternational business, particularly in Japan and China.
| | |  | Mr. Penner brings unique expertise gained through both his service with the company and as a director of varioustechnologycompanies. |
*Greg Penner is the son-in-law of Rob Walton.
18 Walmart | 2017 Proxy Statement • Proposal No. 1: Election of Directors
 | Steven S Reinemund | | | | | Independent Director | Independent Director | | | | | Age: 72 | Joined the Board:Board: 2010 | 2010Age:69
| | Board Committees :
CMDC (Chair)
NGC
TeCC | • CMDC• SPFC (Chair)
| | Other Current Public
Company Directorships :
Exxon Mobil Corporation
Marriott International, Inc.
Vertiv Holdings Co. |
Career Highlights | | December 2019 to presentManaging Partner at Highline Group, a family office of strategic operators |
| | June 2014 to December 2019Advisory role at Wake Forest University as Executive-in-Residence |
| | July 2008 to June 2014Dean of Business and Professor of Leadership and Strategy at Wake Forest University |
| | October 2006 to May 2007Chairman of the Board of PepsiCo, Inc. (“PepsiCo”) |
| | May 2001 to October 2006Chairman and CEO of PepsiCo |
| | 1999 to 2001President and Chief Operating Officer at PepsiCo |
| | 1996 to 1999Chairman and CEO of Frito-Lay, Inc. (“Frito-Lay”) |
Further Information
Mr. Reinemund isserved on the retired Deanboard of Business and Professordirectors of Leadership and Strategy at Wake Forest University, a position he heldGS Acquisition Holdings Corp. from July 2008 to June 2014, and2018 until February 2020, until the completion of business combination transactions that resulted in Vertiv Holdings Co., where heMr. Reinemund continues to serve in an advisory role as an Executive-in-Residence. Prior to joiningon the facultyboard of Wake Forest University, Mr. Reinemund had a distinguished 23-year career with PepsiCo, Inc. (“PepsiCo”), where he served as Chairman of the Board from October 2006 to May 2007, and as Chairman and CEO from May 2001 to October 2006. Prior to becoming Chairman and CEO, Mr. Reinemund was PepsiCo’s President and Chief Operating Officer from 1999 to 2001 and Chairman and CEO of Frito-Lay’s worldwide operations from 1996 to 1999.directors. Mr. Reinemund has served as a director of each of Exxon Mobil Corporation and Marriott International, Inc. since 2007 and2007. Mr. Reinemund has also been on the board of directors of Chick-fil-A, Inc. since June 2015. He previously served as a director of American Express Company from 2007 to 2015 and Johnson & Johnson from 2003 to 2008. Mr. Reinemund is a member of the boards of trustees of The Cooper Institute and the U.S. Naval Academy Foundation.
SKILLS ANDSkills and Qualifications
QUALIFICATIONS
| | | Mr. Reinemund has considerable international businessbusiness leadership experience experience gained through his service as Chairman and CEO of a global public company, through his service as dean of a prominent business school, and his | | service on the boards of several large companies in a variety of industries. | | | | Mr. Reinemund also brings valuable experience with large,internationalbusinesses. | | | | | In addition, Mr. Reinemund’s experience in executive leadership positions at PepsiCo and Frito-Lay provides valuable insights to our Board regardingbrand management,marketing, finance, and strategic planning. |
| 18 | | | | | | | www.walmart.com |
Table of Contents Proposal No. 1 Election of Directors  | 
Kevin Y. SystromS. Robson Walton*
| | | | | | Independent Director | | | | | | Age:75 Joined the Board:20141978 Board Committees:
SPFC
Executive Committee Age:33
| | Board Committees
• CMDC
• TeCC (Chair)
| | Other Current Public Company Directorships:
None *
Company DirectorshipsGreg Penner is the son-in-law of Rob Walton, and Steuart Walton is the nephew of Rob Walton.None
| |
Mr. Systrom is the CEO and co-founder of Instagram, where he managed the company from its founding in 2010 through a period of extremely rapid growth and through the purchase of Instagram by Facebook, Inc. in April 2012. Under his leadership as CEO, Instagram has continued its entrepreneurial development of a video sharing and direct messaging product, Instagram Direct, and has grown it to hundreds of millions of active users worldwide, making it one of the fastest growing social networks of all time. From 2006
until 2009, he was at Google Inc. and worked on large consumer products such as Gmail and Google Calendar. Before joining Google, Mr. Systrom worked with Odeo, a startup company that eventually became Twitter. He graduated from Stanford University with a bachelor of science in management science and engineering with a concentration in finance and decision analysis. While attending Stanford University, he participated in the Mayfield Fellows Program, a high-tech entrepreneurship program.Career Highlights
SKILLS AND
QUALIFICATIONS
 | | Mr. Systrom provides unique insights, experiences, and expertise in developing impactful social networking and consumer internet products.
The Board benefits from Mr. Systrom’s successfulentrepreneurialleadershipin the technology and consumer internet industries.
| | In addition, Mr. Systrom brings distinguished experience in thedesign of internationally-recognized consumer internet products. | | As the CEO of a fast-growing and complex international company, Mr. Systrom brings valuable insights intoglobal business, strategy, and governance. |
Proposal No. 1: Election of Directors•Walmart | 2017 Proxy Statement 19
| | 1969 to presentMr. Walton was the Chairman of Walmart from 1992 to June 2015 and has been a member of the Board since 1978. Prior to becoming Chairman, he had been an officer at our company since 1969 and held a variety of positions during his service, including Senior Vice President, Corporate Secretary, General Counsel, and Vice Chairman |
 | S. Robson Walton* | | | | | | JoinedPrior to 1969Partner with the Board:1978
Age:72
| | Board Committees
•SPFC
•Executive Committee
•GCC
| | Other Current Public
Company Directorshipslaw firm of Conner & Winters in Tulsa, Oklahoma
None
| |
Mr. Walton was the Chairman of Walmart from 1992 to June 2015 and has been a member of the Board since 1978. Prior to becoming Chairman, he had been an officer at our company since 1969 and held a variety of positions during his service, including Senior Vice President, Corporate Secretary, General Counsel, and Vice Chairman. Before joining Walmart, Mr. Walton was in private law practice as a
partner with the law firm of Conner & Winters in Tulsa, Oklahoma. Further Information
In addition to his duties at Walmart, Mr. Walton is involved with a number of non-profit and educational organizations, including Conservation International, where he servespreviously served as Chairman of that organization’s executive committee, and the College of Wooster, where he is an Emeritus Life Trustee for the college. Mr. Walton is also an Emeritus Trustee for the African Parks Foundation, U.S.
Skills and Qualifications
SKILLS AND
QUALIFICATIONS
  | | Mr. Walton brings decades ofleadership experiencewith Walmart and his expertise in strategic planning gained through his service on the boards and other governing bodies of non-profit organizations. | | | |  | Mr. Walton has extensivelegal,risk management, andcorporate governanceexpertise gained as Walmart’s Chairman, Corporate Secretary, and General Counsel and as an attorney in private practice. | | | |  | The Board benefits from Mr. Walton’s in-depth knowledge of our company, its history and theglobal retail industry, all gained through more than 3540 years of service on the Board and more than 20 years of service as our company’s Chairman. |
*Greg Penner is the son-in-law of Rob Walton, and Steuart Walton is the nephew of Rob Walton.
 | 
Steuart L. Walton* | | | | | |
DirectorAge:38 Joined the Board:2016 Board Committee:
TeCC (Chair) Age:35
| | Board Committee
• SPFC
| | Other Current Public Company Directorships:
None *
Company DirectorshipsSteuart Walton is the nephew of Rob Walton. |
Career Highlights | | May 2016 to PresentFounder and Chairman of RZC Investments, LLC, an investment business |
| | None
February 2013 to November 2017Founder of Game Composites, Ltd., a company that manufactures carbon fiber aircraft and aircraft parts. He served as the CEO of Game Composites from its founding until November 2017 |
| | | June 2011 to January 2013Senior Director, International Mergers and Acquisitions, Walmart International division |
| | 2007 to 2010Associate at Allen & Overy, LLP in London, where he advised companies on securities offerings |
Since February 2013, Mr. Walton has been the CEO and founder of Game Composites, Ltd., a company that designs and builds small composite aircraft. Before founding Game Composites, from June 2011 to January 2013, Mr. Walton worked in our company’s International division as a Senior Director, International Mergers and Acquisitions. Prior to his service at our company, he was an associate at Allen & Overy, LLP in London from 2007 to 2010, where
he advised companies on securities offerings. Further Information
Mr. Walton is also a member of the boards of directors of Flipkart Private Limited, Rapha Racing Limited, Crystal Bridges Museum of American Art, Leadership for Educational Equity,and the Smithsonian National Air and Space Museum, and the Walton Family Foundation.Museum. He is a graduate of Georgetown University Law Center, and he holds a bachelor’s degree in business administration from the University of Colorado, Boulder.
Skills and Qualifications
SKILLS AND
QUALIFICATIONS
  | | Mr. Walton brings broad-based and valuable internationallegal andregulatoryexperience gained from his work on complex,internationalfinancial transactions. | | | |  | Mr. Walton has a strong history and familiarity with our company and itsretail operationsandglobal businesses.businesses. He also brings valuable | | leadership and financial insights gained from his entrepreneurial experiences and investments. |
Table of Contents *Steuart Walton is the nephew of Rob Walton.
20 Walmart | 2017 Proxy Statement•Proposal No. 1:1 Election of Directors
| Board Refreshment and Succession Planning |
The NGC is responsible for identifying and evaluating potential director candidates, for reviewing the composition of the Board and Board committees, and for making recommendations to the full Board on these matters. Throughout the year, the NGC actively engages in Board succession planning, taking into account the following considerations: | ● | Input from Board discussions and from the Board and Board committee evaluation processregarding the specific backgrounds, skills, and experiences that would contribute to overall Board and Board committee effectiveness; and | | ● | The future needs of the Board and Board committeesin light of the Board’s tenure policies, Walmart’s long-term strategy, and the skills and qualifications of directors who are expected to retire in the future. |
| 1 | | Director Tenure Policies | | Allow Board to anticipate future Board turnover |  | The Board believes that a mix of longer-tenured directors and newer directors with fresh perspectives contributes to an effective Board. In order to promote thoughtful Board refreshment, the Board has adopted the following retirement policies for Independent Directors, as set forth in Walmart’s Corporate Governance Guidelines: Term Limit:Independent Directors are expected to commit to at least six years of service and may not serve for more than 12 years. Retirement Age:Unless they have not yet completed their initial six-year commitment, Independent Directors may not stand for re-election after age 75. | | | 2 | | Board/Committee Evaluations | | Identify skill sets that would enhance Board effectiveness | | | 3 | | Director Recruitment | | Identify top director talent with desired background and skill sets | | | 4 | | Director Onboarding | | Tailored onboarding enables new directors to learn our business and contribute quickly | |
The Board may make exceptions to these retirement policies if circumstances warrant. For example, the Board could extend the term limit or retirement age for an individual director with particular skills or qualifications that are valuable to the Board’s effectiveness until a suitable replacement is found. Similarly, an Independent Director may retire before serving 12 years in order to stagger turnover on the Board or a Board committee. The Board believes these policies provide discipline to the Board refreshment process and have resulted in a diverse Board with an effective mix of skills, experiences, and tenures, as shown on page 13. The NGC has engaged third-party consultants to assist it with the Board refreshment process and to help cultivate a continuous pipeline of potential future director candidates. As a part of the process of identifying potential director candidates, the NGC may also consult with other directors and senior officers. If the NGC decides to proceed with further consideration of a potential candidate, the Chair of the NGC and other members of the NGC, as well as other members of the Board, may interview the candidate. The NGC then may recommend that the full Board appoint or nominate the candidate for election to the Board. | 20 | | www.walmart.com |
Table of Contents Corporate Governance Effective corporate governance is essential for maximizing long-term value creation for our shareholders. Our values of honesty, accountabilitybeliefs have been grounded in a values-based ethically led organization, and integrity guideit’s this foundation that continues to influence our businessdecisions and ensure that we maintain the trust of our shareholders. leadership. Our governance structure is based onset forth in our Corporate Governance Guidelines and other key governance documents. These guidelines are reviewed at least annually and updated as neededappropriate in response to evolving best practices, regulatory requirements, issues raisedfeedback from our annual Board evaluations, and recommendations made by our shareholders, all with the goal of supporting and otherwise as needed to comply with Walmart’s ethical and fair disclosure practices.effectively overseeing our ongoing strategic transformation. Our Corporate Governance Guidelines address, among other topics:
○Corporate Governance Highlights Our strong corporate governance practices demonstrate our Board’s commitment to enabling an effective structure to support the successful oversight of our strategy. Board Independence ●Majority Independent Board ●Lead Independent Director ●Governance Committees are Fully Independent Other Board and Board Committee Practices ●Separate Chair and CEO ●Risk Oversight ●Oversight of Political and Social Engagement ●Robust Stock Ownership Guidelines ●No Hedging and Restrictions on Pledging ●No Employment Agreements with NEOs ●No Change-in-Control Provisions ●Policy to include women and minorities among the pool of potential new director candidates Board Performance | The Board’s Year in Strategy and Governance The Board’s activities are structured to oversee Walmart’s strategy and to provide advice and counsel to management. The Board, size, structure,working closely with the executive management team, has committed to important initiatives to better serve our customers and composition; | | pursue our key objectives of making every day easier for busy families, sharpening our culture and becoming more digital, operating with discipline, and making trust a competitive advantage. Over the past year, and among other matters, the Board was involved in these governance and strategy discussions and actions: ✓Ongoing expansion of convenience and delivery options, including NextDay delivery from Walmart.com, online grocery delivery membership, Walmart InHome delivery, and nationwide same-day pickup for Sam’s Club in the U.S. ✓Actively involved in executive succession planning resulting in the appointments of the President and CEO of Walmart U.S., President and CEO of Sam’s Club, a new Chief Technology Officer and Chief Development Officer, and a new Chief People Officer ✓Ongoing review of our international portfolio of operations ✓Reduced the number of standing Board committees and enhanced Board effectiveness | | ○●Board Oversight of Company Strategy | Board refreshment and tenure of independent directors; | | | | ○ | ●Robust Board leadership structure, including the separationEvaluations ●Extensive Shareholder Engagement ●Commitment to Board Refreshment and Succession Planning ●Focus on Management Development and Succession Planning Shareholder Rights ●Market Standard Proxy Access Right ●Shareholder Right to Call Special Meetings ●No Poison Pill ●No Supermajority Voting Requirements ●Annual Election of the Chairman and CEO roles and the selection, role, and responsibilities of the Lead Independent Director; | | | ○ | Board committees; | | | ○ | stock ownership guidelines; | | | ○ | the Board’s commitment to diversified membership;All Directors●Majority Voting for Director Elections |
○ | management development and succession planning, diversity initiatives, and long-term strategic planning; | | | ○ | the directors’ full and free access to officers, other associates of the company, and the company’s outside advisors; | | | ○ | director compensation; | | | ○ | director orientation and continuing education; | | | ○ | the annual review of the CEO’s performance by the CMDC and the Board; and | | | ○ | annual Board and Board committee evaluations.2020 Proxy Statement 21 |
Governance Materials Available on our WebsiteTable of Contents
Our Board and Board committee governance documents, including the Board committee charters, the Corporate Governance Guidelines, and other key corporate governance documents are available to our shareholders on our corporate website athttp://stock.walmart.com/investors/corporate-governance/governance-documents.
You may also access and review the following additional corporate governance documents on our corporate website:
¢ | Amended and Restated Bylaws; | | ¢ | Fair Disclosure Procedures; | | | | | | ¢ | Code of Ethics for the CEO and Senior Financial Officers; | | ¢ | Global Anti-Corruption Policy; | | | | | | ¢ | Global Statement of Ethics; (available atwww.walmartethics.com); | | ¢ | Government Relations Policy; and | | | | | | ¢ | Procedures for Accounting and Audit-Related Complaints; | | ¢ | Privacy Policy. | | | | | | ¢ | Investment Community Communications Policy; | | | |
These materials are also available in print at no charge to any shareholder who requests a copy by writing to: Wal-Mart Stores, Inc., Global InvestorRelations Department, 702 Southwest 8th Street, Bentonville, Arkansas 72716-0100.
A description of any substantive amendment or waiver of Walmart’s Code of Ethics for the CEO and Senior Financial Officers or Walmart’s Global Statement of Ethics granted to Executive Officers or directors will be disclosed on our corporate website within four business days following the date of the amendment or waiver (http://stock.walmart.com/investors/corporate-governance/governance-documents) for a period of 12 months after the date of the amendment or waiver. There were no substantive amendments to or waivers of Walmart’s Code of Ethics for the CEO and Senior Financial Officers or Walmart’s Global Statement of Ethics granted to Executive Officers or directors during fiscal 2017.
Corporate Governance•Walmart | 2017 Proxy Statement21 | Board Structure and Effectiveness |
Board Leadership Structure The leadership structure of our Board is designed to promote robust oversight, independent viewpoints, and the promotion of the overall effectiveness of the Board. The Board annually reviews its leadership structure as part of the process described on page 20. As discussed on page 88,99, approximately 51%50% of our company’s sharesShares are held by members of the family of Sam Walton, our company’s founder. Three generations of Walton family members have served on our Board, which demonstrates the Walton family’s interestsinterest in and commitment to the long-term interestssuccess of our company. Despite their substantial ownership in the company, the members of the Walton family traditionally have held only three seats on our Board. While the NYSE Listed Company Rules provide exemptions from certainindependence requirements related to board independence,for controlled companies, Walmart has not relied on and has no plans to rely on any of those governance exemptions because we believe it is important to have a majority independent board. Furthermore, the leadership structure of our Board is designed to ensure robust oversight, independent viewpoints, and the promotion of the overall effectiveness of the Board. The Board also reviews its leadership structure as part of the annual evaluation process described on page 30. Our current Board leadership structure consists of:  Non-Executive Chairman
Greg Penner | | Non-Executive ChairmanLead Independent Director
Tom Horton
| | Greg PennerPresident and CEO
Doug McMillon
|  | |  | |  | | Primary Responsibilities •
| | Primary Responsibilities | | Primary Responsibilities | ●Presides over meetings of the Board and shareholders•
●Focuses on Board oversight and governance matters•
●Provides advice and counsel to the CEO•
●Agenda review process | |  | Lead Independent Director
Jim Cash
Primary Responsibilities
•
●Liaison between Independent Directors and Chairman•
●Board and Board committee development and evaluation•
●Shareholder engagement | |  | President and CEO
Doug McMillon
Primary Responsibilities
•
●Leadership of Walmart’s complex global business•
●Implements strategic initiatives•
●Development of robust management team |
We have separated the Chairman and CEO roles since 1988.By separating these roles, our CEO is able to focus on executing our strategy and managing Walmart’s complex daily operations, and our Chairman, who is an Outside Director, can devote his time and attention to matters of Board oversight and governance. We have had a Lead Independent Director since 2004.The role of the Lead Independent Director is designed to enhance the candor and communication between the independent members of the Board, the Chairman, and the CEO. Dr. Cash, who has served in this role since 2014,Our Lead Independent Director is an active and engaged memberappointed annually by the independent members of the Board withand has a robust set of responsibilities, including: | ● | presiding over executive private sessions of the Outside Directors and the Independent Directors; | | ● | authority to call meetings of the directors, including separate meetings of the Outside Directors and the Independent Directors; and | | ● | is available, when appropriate, for consultation with major shareholders. |
Mr. Horton became our Lead Independent Directors; authority to call meetings of the directors, including separate meetings of the Outside Directors and the Independent Directors; and
is available, when appropriate, for consultation with major shareholders.
Director immediately following our 2018 Annual Shareholders’ Meeting. In addition to his role as Lead Independent Director, Dr. CashMr. Horton also serves as the Chair of the NGC, which means he also leadsoversees the annual Board and committee evaluation process and actively participates in the work related to overall Board effectiveness, including Board development, succession planning, and refreshment. | 22 | | www.walmart.com |
Table of Contents Independent Corporate Governance
Board Committee Chairs:Each of the Board’s key committees is led by an independent chair. TheseOur Board committees play a critical role in the oversight of our governance and strategy, and each Board committee has access to management and the authority to retain independent advisors as it deems appropriate. Governance Committees | | Strategy Committees | | | | | | | | | | | Audit | | Compensation
and Management
Development | | Nominating and
Governance | | | Strategic Planning
and Finance | | Technology and
eCommerce | | | | | | | | | | | | | | |  | |  | |  | | |  | |  | | | Tim Flynn
Independent Chair | | Linda Wolf
Independent Chair | | Jim Cash
Independent Chair | | | Steve Reinemund
Independent Chair | | Kevin Systrom
Independent Chair | |
22Walmart | 2017 Proxy Statement•Corporate Governance Each of the governance-related Board committees, as well as our Strategic Planning and Finance Committee, is led by an independent chair.
| Governance Committees | | Strategy Committees |
 | |  | |  | |  | |  | | Audit | | Compensation and Management Development | | Nominating and Governance | | Strategic Planning and Finance | | Technology and eCommerce |  | |  | |  | |  | |  | | Tim Flynn | | Steve Reinemund | | Tom Horton | | Sarah Friar | | Steuart Walton | | Independent Chair | | Independent Chair | | Independent Chair | | Independent Chair | | Chair |
Board Committees To enhance the effectiveness of the Board’s risk oversight function, the Board regularly reviews its committee structure and committee responsibilities to ensure that the Board has an appropriate committee structure focused on matters of strategic and governance importance to Walmart. During fiscal 2017, the Board decidedWhen possible, Independent Directors are appointed to split the former Compensation, Nominatingserve on at least one strategy committee and Governance Committee into two distinct committees.one governance committee. Currently, the Board has sevensix standing committees, which are described below. In addition to the duties described below, our Board committees perform the risk oversight functions described on page 33.29.
Table of Contents STRATEGIC PLANNING AND FINANCE COMMITTEE
Six meetings during fiscal 2017 Primary roles and responsibilities • Reviews global financial policies and practices and reviews and analyzes financial matters, acquisition and divestiture transactions • Oversees long-range strategic planning • Reviews and recommends a dividend policy to the Board • Reviews the preliminary annual financial plan and annual capital plan to be approved by the Board, as well as the company’s capital structure and capital expenditures Total Members: 5 Steve Reinemund, Chair Tim Flynn Tom Horton Rob Walton Steuart Walton ” As Walmart continues its strategic transformation during fiscal 2018, the SPFC remains focused on the effective oversight of the allocation and deployment of the company’s capital and resources.” –Steve Reinemund Five members have global or international business experience Four members have senior leadership experience Four members have regulatory or legal experience Two members have retail experience Two members have finance, accounting or reporting experience One member has marketing or brand management experience
Corporate Governance•Walmart | 2017 Proxy Statement 23 | Technology and eCommerce Committee |  |
3 meetingsduring fiscal 2020 | | 5 Members Steuart Walton, Chair • Cesar Conde • Tim Flynn • Marissa Mayer • Steve Reinemund |
TECHNOLOGY AND eCOMMERCE COMMITTEE
Roles and responsibilities • Reviews matters relating to information technology, e-commerce, and innovation and oversees the integration of Walmart’s information technology, e-commerce, and innovation efforts with Walmart’s overall strategy • Reviews and provides guidance regarding trends in technology and e-commerce and monitors overall industry trends Total Members: 5 Kevin Systrom, Chair Jim Cash Pam Craig* Marissa Mayer Linda Wolf* 6 Six meetings during fiscal 2017 “It’s an exciting time for Walmart as it continues to develop competitive and innovative ways to provide a seamless digital customer experience at scale that saves time and money for our customers.” – Kevin Systrom Five members have global or international business experience Four membershave senior leadership experience Two members have finance, accounting or reporting experience Four members have technology or e-commerce experience Three membershave marketing or brandmanagement experience
* Not standing for reelection at the 2017 Annual Shareholders’ meeting.
24Walmart | 2017 Proxy Statement•Corporate Governance
| All five members have global or international business experience |
AUDIT COMMITTEE
12 Twelve meetings during fiscal 2017 Roles and Responsibilities • Reviews the financial statements and oversees the financial reporting policies, procedures, and internal controls • Responsible for the appointment, compensation, and oversight of the independent accountants • Pre-approves audit, audit-related, and non-audit services to be performed by Walmart’s independent accountants • Reviews and approves any related person transactions and other transactions subject to our Transaction Review Policy • Reviews risk management policies and procedures, as well as policies, processes, and procedures regarding compliance with applicable laws and regulations, as well as Global Statement of Ethics and Code of Ethics for the CEO and Senior Financial Officers • Oversees internal investigatory matters, including the internal investigation into alleged violations of the FCPA and other alleged crimes or misconduct** • Oversees Walmart’s enhanced global ethics and compliance program • Oversees the company’s internal audit function Total Members: 3* Tim Flynn, Chair Jim Cash Tom Horton “The Audit Committee continues to focus on oversight of our company’s financial accounting policies, the independent accountants, and risk management and compliance processes in the support of our company’s strategic plans and objectives.” – Tim Flynn Three members have global or international business experience Three members have finance, accounting or reporting experience One member has technology or e-commerce experience Three membershave seniorleadership experience Two membershave regulatory or legal experience
|  | Two members have technology or eCommerce experience |  | Four members have senior leadership experience | |  | Three members have marketing or brand management experience |  | One member has finance, accounting, or financial reporting experience | |  | Two members have regulatory, legal, or risk management experience | | ● | Reviews matters relating to information technology, eCommerce, and innovation and oversees the integration of Walmart’s information technology, eCommerce, and innovation efforts with Walmart’s overall strategy | | ● | Reviews and provides guidance regarding trends in technology and eCommerce and monitors overall industry trends |
| Audit Committee* |  |
8 meetingsduring fiscal 2020 | | 4 Members Tim Flynn, Chair • Cesar Conde • Sarah Friar • Tom Horton |
 | All four members have global or international business experience | |  | All four members have senior leadership experience |  | Three members have finance, accounting, or financial reporting experience | |  | Two members have regulatory, legal, or risk management experience |  | Two members have technology or eCommerce experience | | | |
| ● | Reviews the financial statements and oversees the financial reporting policies, procedures, and internal controls | | ● | Responsible for the appointment, compensation, retention, and oversight of the independent accountants | | ● | Pre-approves audit, audit-related, and non-audit services to be performed by Walmart’s independent accountants | | ● | Reviews and approves any related person transactions and other transactions subject to our Transaction Review Policy | | ● | Reviews risk assessment and risk management process and policies, processes and procedures regarding compliance with applicable laws and regulations, as well as Global Statement of Ethics and Code of Ethics for the CEO and Senior Financial Officers | | ● | Oversees internal investigatory matters | | ● | Oversees Walmart’s global ethics and compliance program | | ● | Oversees the company’s internal audit function |
| * | Independence and financial literacy:The Board has determined that each member of the Audit Committee is independent as defined by the Exchange Act, the SEC’s rules, and the NYSE Listed Company Rules. Each Audit Committee member named above is financially literate as required by NYSE Listed Company Rules,Rules. The Board has determined that Tim Flynn, Sarah Friar, and is anTom Horton are “audit committee financial expert”experts” as defined in the SEC’s rules. |
| 24 | | | ** | For more information about the Audit Committee’s role with respect to the FCPA investigation, see “Director Compensation” on page 41.www.walmart.com |
Table of Contents Corporate Governance•Walmart | 2017 Proxy Statement25 COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
3 Three meetings** during fiscal 2017 Roles and responsibilities • In consultation with the CEO, approves compensation of Executive Officers other than the CEO, and reviews compensation of other senior officers • Reviews and approves the compensation of the CEO and recommends to the Board the compensation of the Outside Directors • Sets performance measures and goals and verifies the attainment of performance goals under our incentive compensation plans • Reviews compensation and benefits issues • Oversees the management development, succession planning, and retention practices for Executive Officers and senior leaders Total Members: 4* Linda Wolf, Chair(1) Marissa Mayer Steve Reinemund Kevin Systrom “The CMDC is focused on continuing to align compensation and performance management in ways that support our enterprise strategy.” – Linda Wolf Four members have global or international business experience Four members have senior leadership experience Four members have marketing or brand management experience Two members have technology or e-commerce experience
| Compensation and Management Development Committee* |  |
6 meetingsduring fiscal 2020 | | 3 Members Steve Reinemund, Chair• Carla Harris • Marissa Mayer |
 | All three members have global or international business experience | |  | One member has technology or eCommerce experience |  | All three members have senior leadership experience | |  | One member has finance, accounting, or financial reporting experience |  | Two members have marketing or brand management experience | |  | One member has regulatory, legal, or risk management experience |
| ● | In consultation with the CEO, approves compensation of Executive Officers other than the CEO, and reviews compensation of other senior officers | | ● | Reviews and approves the compensation of the CEO and recommends to the Board the compensation of the Outside Directors | | ● | Sets performance measures and goals and verifies the attainment of performance goals under our incentive compensation plans | | ● | Reviews compensation and benefits matters | | ● | Oversees the management, development, succession planning, and retention practices for Executive Officers and senior leaders | | ● | Oversees culture, diversity, and inclusion initiatives |
| * | Independence:The Board has determined that each member of the CMDC is independent as defined by the Exchange Act, the SEC’s rules, and the NYSE Listed Company Rules,Rules; is an outside director as defined in Section 162(m) of the Internal Revenue Code,Code; and is a “non-employee director” as defined in the SEC’s rules. |
** | The CMDC is one of two committees that was formed when the Board approved the separation of the Compensation, Nominating and Governance Committee (CNGC) into two distinct committees effective beginning January 1, 2017. Prior to January 1, 2017, the CNGC met 8 times Committee* |  |
4 meetingsduring fiscal 2017.2020 | (1)3 Members | Not standing for reelection at the 2017 Annual Shareholders’ Meeting.Tom Horton, Chair• Carla Harris • Steve Reinemund |
26Walmart | 2017 Proxy Statement•Corporate Governance
| All three members have global or international business experience |
NOMINATING AND GOVERNANCE COMMITTEE
1 One meeting** during fiscal 2017 Roles and responsibilities • Oversees corporate governance issues and makes recommendations to the Board • Identifies, evaluates, and recommends candidates for nomination to the Board • Reviews and makes recommendations to the Board regarding director independence • Reviews and advises management on social, community, and sustainability initiatives, as well as legislative affairs and public policy engagement Total Members: 3* Jim Cash, Chair Tom Horton Linda Wolf(1) “The NGC is committed to board effectiveness, thoughtful board refreshment, and governance that supports our strategy.” – Jim Cash Three members have global or international business experience Three members have senior leadership experience One member has marketing or brand management experience One memberhas technology or e-commerce experience Two members have finance, accounting or reporting experience One memberhas regulatory orlegal experience
| |  | Two members have finance, accounting, or financial reporting experience |  | All three members have senior leadership experience | |  | Two members have regulatory, legal, or risk management experience |  | One member has marketing or brand management experience | | | |
| ● | Oversees corporate governance issues and makes recommendations to the Board | | ● | Identifies, evaluates, and recommends candidates for nomination to the Board | | ● | Reviews and makes recommendations to the Board regarding director independence | | ● | Reviews and advises management on environmental, social, and community initiatives, as well as legislative affairs and public policy engagement |
| * | Independence:The Board has determined that each member of the NGC is independent as defined by the NYSE Listed Company Rules. | ** | The NGC is one of two committees that was formed when the Board approved the separation of the Compensation, Nominating and Governance Committee (CNGC) into two distinct committees effective beginning January 1, 2017. Prior to January 1, 2017, the CNGC met 8 times during fiscal 2017. |
(1)2020 Proxy Statement 25 | Not standing for reelection at the 2017 Annual Shareholders’ Meeting. |
Table of Contents Corporate Governance•Walmart | 2017 Proxy Statement27 The remaining twolast standing committeescommittee of the Board areis responsible for various administrative matters. GLOBAL COMPENSATION COMMITTEE
 Executive Committee |  |
Four meetings0 meetings*
during fiscal 20172020
| | 4 Members Doug McMillon, Chair• Tom Horton • Greg Penner • Rob Walton |
Primary Roles and Responsibilities
Administers Walmart’s equity and cash incentive compensation plans for associates who are not directors or Executive Officers
Total Members: 3
Doug McMillon, Chair
Greg Penner
Rob Walton
EXECUTIVE COMMITTEE
 | One meeting*Primary Responsibilities
during fiscal 2017 |
Primary Roles and responsibilities
•● | Implements policy decisions of the Board | | | •● | Acts on the Board’s behalf between Board meetings |
Total Members: 4
Doug McMillon, Chair
Jim Cash
Greg Penner
Rob Walton
| * | The Executive Committee acted by unanimous written consent 1211 times during fiscal 2017. The Board2020, each of which were reviewed and ratified all unanimous written consents ofby the Executive Committee during fiscal 2017.Board. |
The Board approved the dissolution of the Global Compensation Committee effective on June 6, 2019. Prior to that date, the Global Compensation Committee did not meet during fiscal 2020.
Governing Documents In addition to our Corporate Governance Guidelines, each standing committee of the Board has a written charter, which defines the roles and responsibilities of the Board committee. The Board committee charters and the Corporate Governance Guidelines provide the overall framework for our corporate governance practices. The NGC and the Board review the Corporate Governance Guidelines, and the NGC, the Board, and each Board committee review the Board committee charters at least annually to determine whether any updates or revisions to these documents may be necessary or appropriate. | 26 | | www.walmart.com |
Table of Contents Corporate Governance Board Evaluations The Board is committed to a robust Board evaluation process as an important tool for promoting effectiveness and continuous improvement. This year, the process was conducted under the leadership of the Lead Independent Director. Generally, the Board engages a third-party consulting firm every other year in order to bring an outside perspective to the evaluation process. Our Board Evaluation Process | 1 | | | Questionnaires Each director completes a detailed questionnaire. | | Topics covered include, among others: ●The effectiveness of the Board’s leadership structure and the Board committee structure; ●Board and committee skills, composition, diversity, and succession planning; ●Board culture and dynamics, including the effectiveness of discussion and debate at Board and committee meetings; ●The quality of Board and committee agendas and the appropriateness of Board and committee priorities; and ●Board/management dynamics, including the quality of management presentations and information provided to the Board and committees. | | 2 | | | Interviews | | Individual director interviews– Each director participates in a confidential, open-ended, one-on-one interview to solicit input and perspective on Board and Board committee effectiveness. Senior management interviews– Members of Walmart’s senior executive team also participate in confidential, one-on-one interviews designed to solicit management’s perspective on the Board’s effectiveness, engagement, and the dynamic between the Board and management. | | | ● | | | | | 3 | | | Action Items These evaluations have consistently found that the Board and Board committees are operating effectively. | | Over the past few years, this evaluation process has contributed to various refinements in the way the Board and Board committees operate, including: ●Reducing the size of the Board to promote engagement and input into our strategic decision-making; ●Changing the Board committee structure to create a separate Compensation and Management Development Committee and a Nominating and Governance Committee; ●Changing committee assignments so that Independent Directors generally sit on one “strategy” committee and one “governance” committee; ●Ensuring that Board and committee agendas are appropriately focused on strategic priorities and provide adequate time for director input; ●Additional responsibilities for our Lead Independent Director, including active participation in the agenda-setting process for the Board and Board committees; and ●Increased focus on continuous Board succession planning and refreshment, including engaging a third-party consulting firm to help further develop our robust long-term director candidate pipeline. |
Table of Contents Corporate Governance Director Onboarding and Engagement All directors are expected to invest the time and energy required to quickly gain an in-depth understanding of our business and operations in order to enhance their strategic value to our Board. We develop tailored onboarding plans for each new director. Shortly after joining our Board, each new director has “learn the business” meetings with the leaders of key operational and corporate support functions. Occasionally, a Board meeting is held at a location away from our home office, usually in a market in which we operate. In connection with these Board meetings, our directors learn more about the local business market through meetings with our business leaders in these markets, visits to our stores and other facilities in the local market, and visits to the stores of our competitors. We also typically hold one Board meeting per year at one of our eCommerce offices, where our Board members participate in intensive sessions focused on our eCommerce strategies and operations. Our Board members are also expected to participate in other company activities and engage directly with our associates at a variety of events throughout the year. Examples of activities and events that members of our Board have participated in include: | ● | attending Walmart leadership meetings and traveling with senior business leaders on trips to domestic and international markets; | | ● | touring facilities with our compliance associates; | | ● | speaking at various culture, diversity, and inclusion events held at our home office in Bentonville, Arkansas and other locations; and | | ● | attending and speaking at meetings of Walmart business segments, divisions, and corporate support departments. |
Board Meetings and Director Attendance The Board held a total of 5five meetings during fiscal 2017.2020. The Outside Directors and Independent Directors met regularly in separate executive sessions, with the Lead Independent Director presiding over those sessions.As a whole, during fiscal 2017,2020, our directors attended approximately 98%97% of the aggregate number of Board meetings and meetings of Board committees on which they served,served.Each director attended at least 75% of all Board meetings and 9meetings of the 10 incumbent directors standing for reelection had perfect attendance. Board committees on which he or she served. Under our Board policy, all directors are expected to attend the company’s annual shareholders’ meetings. While the Board understands that there may be situations that prevent a director from attending an annual shareholders’ meeting, the Board encourages all directors to make attendance at all annual shareholders’ meetings a priority. As described in the notice of the meeting on page 4, the 2020 Annual Shareholders’ Meeting will be a virtual meeting. FifteenAll twelve Board members attended the 20162019 Annual Shareholders’ Meeting, including all 10 director nominees named in this proxy statement who were membersstatement.
| Key Board Responsibilities |
The Board’s Strategic Oversight Role The Board has oversight responsibility for our company’s business strategy and strategic planning. Walmart operates in a rapidly changing retail environment. Shifts in market fundamentals, technology, and customer preferences require significant Board engagement with our strategy. As Walmart continues to transform its business, the Board works with management to respond to a dynamically changing environment. Given the iterative nature of this transformation, the Board’s oversight over strategy is a continuous process. Throughout the year, the Board and its committees oversee and guide management with respect to a variety of strategic matters, and strategic discussions are embedded in every Board and Board committee meeting. While the Board and its committees oversee our strategic planning process, management is responsible for executing our strategy. The Board receives regular updates and engages actively with our senior management team regarding key strategic initiatives, technology updates, competitive and economic trends, and other developments. In addition, certain Board meetings are enhanced with “hands-on” experiences, such as visits to our stores and other facilities or technology demonstrations. The Board’s oversight and our management’s execution of our business strategy are intended to help promote the creation of long-term stockholder and stakeholder value in a sustainable manner, with a focus on assessing both potential opportunities available to us and risks that we might encounter. | 28 | | www.walmart.com |
Table of Contents Corporate Governance The Board’s Role in Risk Oversight Taking reasonable and responsible risks is an inherent part of Walmart’s business and is critical to our continued innovation, growth, and achievement of our strategic objectives. The Board and the Board committees actively oversee and monitor the management of the most significant risks that could impact our company. The Board ordoes not view risk in isolation, but instead considers risk in conjunction with its oversight of Walmart’s strategy and operations. Walmart identifies, assesses, and assigns responsibility for managing risks through its annual enterprise risk assessment process, other internal processes, and internal control environment. The Board, nominees atBoard committees, and management coordinate risk oversight and management responsibilities in a manner that we believe serves the timelong-term interests of the 2016 Annual Shareholders’ Meeting. 28Walmart | 2017 Proxy Statement•Corporate Governanceour company and our shareholders through established periodic reporting and open lines of communication.
| | | | | | | Board Oversight | | | ●Has primary responsibility for overseeing risk management ●Evaluates and approves strategic objectives and defines risk tolerance ●Delegates certain risk management oversight responsibilities to Board committees ●Receives regular reports from Board committee chairs and management regarding risk-related matters | | | | |  | | | | | | | | | |
| |  | Technology and
eCommerce Committee |  | Strategic Planning and
Finance Committee |  | Audit Committee | | | | Key risks overseen | Key risks overseen | Key risks overseen | | | | ●Integration of information technology, eCommerce, and innovation efforts with overall strategy ●Emerging trends in technology and eCommerce | ●Financial status and financial matters, including capital expenditures, annual financial plans, and dividend policies ●Long-range strategic plans ●Potential acquisitions and divestitures | ●Overall risk identification, monitoring, and mitigation processes and policies ●Financial statements, systems, and reporting ●Legal, ethics, and compliance ●Information systems, information security, data privacy and security, and cybersecurity ●Related person transactions ●Internal investigatory matters | | | |  | Compensation and Management
Development Committee |  | Nominating and Governance
Committee | | | | Key risks overseen | Key risks overseen | | | | ●Senior executive compensation ●Senior executive development, succession planning, and retention ●Human capital management, including pay, benefits, diversity and inclusion, recruiting and retention, and culture | ●Corporate governance ●Director succession planning ●Environmental, social, community, and charitable giving initiatives ●Legislative affairs and public policy engagement strategy | | | | | | | | | | | | | | | |  | |
| | | | | | | | | | | | | | | Strategic and
Operational
Management
Committees | Legal, Regulatory
and Compliance
Risk Management
Committees | Financial Risk
Management
Committees | Enterprise Risk
Management | Global Audit
Services | | | | | | | | |
| |  | | | | | | | | Management Oversight | | | Management is responsible for the enterprise risk assessment process and the day-to-day management of risks. Management considers risks in categories which include, but are not limited to, the following: | |
| ●Strategic risk ●Reputational risk | ●Financial risk ●Legal, regulatory, and compliance risk | ●Operational risk, including information systems, information security, data privacy and security, cybersecurity, and supply chain | |
Additional information regarding the roles and responsibilities of our Board committees can be found under “Board Committees” beginning on page 23.
Table of Contents Corporate Governance Management Development and Succession Planning Our Board places a high priority on senior management development and succession planning. The CMDC has primary responsibility for executive succession planning, and senior management development is a regular topic on the agendas for meetings of the CMDC. At these meetings, the members of our CMDC, in consultation with our CEO, our Chief People Officer, and others as the CMDC may deem appropriate, engage in comprehensive deliberations regarding the development and evaluation of current and potential senior leaders, as well as the development of executive succession plans, including succession plans for our CEO position. This process has contributed to two successful CEO transitions since 2009. The Board has also adopted a CEO succession planning process to address unanticipated events and emergency situations. Board’s Oversight of Culture and Human Capital Management Our human capital management and talent development efforts go well beyond the senior management level. We believe that retail can be a powerful engine for economic mobility, and we are committed to a respectful, rewarding, diverse and inclusive work environment that allows our associates to develop the skills they need for success. The Board and the CMDC provide oversight and guidance on workforce development; compensation; benefits; recruiting and retention; and culture, diversity and inclusion. We continue to invest in our associates’ wages and training, and recently enhanced our leave and paid-time-off benefits. We believe that these actions have resulted in a more engaged and effective workforce that is better equipped to serve our customers in today’s rapidly changing retail environment. Board Oversight of Legislative Affairs, Public Policy Engagement, Charitable Giving, and Sustainability The NGC reviews and advises management regarding the company’s legislative affairs and public policy engagement strategy, as well as the company’s charitable giving strategy and other social, community, and sustainability initiatives. Walmart engages in the political process when we believe that doing so will serve the best interests of the company and our shareholders. Walmart is committed to engaging in the political process as a good corporate citizen and in a manner that complies with all applicable laws. Over the years, Walmart has provided greater transparency regarding the company’s political engagement. Since 2015, we have compiled lobbying disclosure information from our U.S. state-level public filings and presented them on our corporate website, and since 2016 we have also disclosed on our corporate website the lobbying expense from our public filings at the U.S. federal level. Walmart’s Government Relations Policy is available athttp://corporate.walmart.com/policies. Environmental, Social, and Governance Report Our approach to environmental, social, and governance (“ESG”) topics is rooted in our company’s purpose to save people money so they can live better. Embedded in our purpose is the principle of shared value, which means increasing business value by helping to address important needs in society and, conversely, helping transform society through our business. To maximize shared value, we aim not only to run a good retail business, but also to make large-scale and lasting improvements to the ecosystems most salient to our business. We set our ESG priorities based on relevance to our company purpose, key categories and markets, Walmart’s ability to make an impact, and relative importance to our customers and other stakeholders. We believe collective action in collaboration with other leaders and stakeholders is essential to transforming systems. Since 2007, our company has prepared and produced a report describing our company’s progress and initiatives regarding sustainability and other ESG matters. For the most recent information regarding Walmart’s ESG initiatives and related matters, please visit the “ESG Investors” section of our corporate website. Shareholder Outreach and Engagement We value regular engagement with and feedback from a wide variety of stakeholders, including customers, associates, suppliers, and communities. We also recognize the value of listening to the views of our shareholders, and the relationship with our shareholders is an integral part of our corporate governance practices. We conduct shareholder outreach throughout the year to ensure that management and the Board understand and consider the issues of importance to our shareholders and are able to address them appropriately. Senior leaders and subject matter experts from the company meet regularly with representatives at many of our top institutional shareholders and periodically with leading proxy advisory firms to discuss Walmart’s strategy, governance practices, executive compensation, compliance programs, and other ESG related matters. Members of our Board participate from time to time in these meetings. Management reports regularly to the CMDC and NGC about these meetings, including feedback on these diverse topics and perspectives shared by our shareholders. | 30 | | www.walmart.com |
Table of Contents Corporate Governance We continued this program of shareholder engagement during fiscal 2020, in addition to our customary participation at industry and investment community conferences, investor road shows, and analyst meetings. We also have incorporated into this proxy statement some of the feedback we received during these meetings. We also respond to individual shareholders who provide feedback about our business. We have had success engaging with parties to understand shareholder concerns and reach resolutions on issues that are in the best interests of our shareholders, and we remain committed to these ongoing initiatives. Active Ongoing Shareholder Engagement | | ●Board members, senior leaders, and/or subject matter experts actively solicit feedback from our large shareholders on strategy, governance, compensation, ESG, and other topics. During fiscal 2020, we engaged with a majority of our 50 largest institutional shareholders, representing approximately 525 million Shares. ●The CMDC and NGC receive regular reports on this engagement. ●We welcome feedback from all shareholders, who can contact our Global Investor Relations team by: | | | | | | | | | |  | |  | |  | |  | | calling
1-479-273-6463 | | emailing
IRinqu@wal-mart.com | | using Walmart’s Global Investor Relations app, available for free in iTunes and Google Play | | visiting
http://stock.walmart.com | |
Communicating with the Board The Board welcomes feedback from shareholders and other interested parties. There are a number of ways that you can contact the Board or individual members of the Board.  | Via mail: | |  | Via email: | Name of Director(s) or Board of Directors
c/o Gordon Y. Allison,
Senior Vice President, andOffice of the
GeneralCorporate Secretary, Chief Counsel for
Finance and Corporate DivisionGovernance,
Wal-Mart Stores,Walmart Inc.
702 Southwest 8th8th Street
Bentonville, Arkansas 72716-0215 | | ○ | ●the entire Board at directors@wal-mart.com; | | ○ | ●the Independent Directors at Independent.Directors@wal-mart.com; | | ○ | ●the Outside Directors at nonmanagementdirectors@wal-mart.com; or | | | | | ○ | ●any individual director, at the full name of the director as listed under“Proposal No.1under “Proposal No. 1 – Election of Directors” followed by “@wal-mart.com.”For example, our Chairman, Gregory B. Penner, may be reached atgregorybpenner@wal-mart.com.at gregorybpenner@wal-mart.com. |
We receive a large volume of correspondence regarding a wide range of subjects each day, including correspondence relating to ordinary store operations and merchandise in our stores. As a result, our individual directors are often not able to respond to all communications directly. Therefore, the Board has established a process for managing communications to the Board and individual directors. Communications directed to the Board or individual directors are reviewed to determine whether, based on the facts and circumstances of the communication, a response on behalf of the Board or an individual director is appropriate. If a response on behalf of the Board or an individual director is appropriate, Walmart management may assist the Board or individual director in gathering all relevant information and preparing a response. Communications related to day-to-day store operations, merchandise, and similar matters are typically directed to an appropriate member of management for a response. Walmart maintains records of communications directed to the Board and individual directors, and these records are available to our directors at any time upon request. Shareholders wishing to recommend director candidates for consideration should do so in writing to the address above. The recommendation should include the candidate’s name and address, a resume or curriculum vitae that demonstrates the candidate’s experience, skills, and qualifications, and other relevant information for the Board’s consideration. All director candidates recommended by shareholders will be evaluated by the NGC on the same basis as any other director candidates.
Table of Contents Corporate Governance•Walmart | 2017 Proxy Statement 29 Board Evaluations and Board Effectiveness
The Board is committed to continuous improvement, and Board and Board committee evaluations are an important tool for promoting effectiveness. Our Lead Independent Director leads the evaluation process. Every other year, the Board engages a third party consulting firm to bring an outside perspective to the evaluation process.
Our Board Evaluation Process | Questionnaires
Each director completes a detailed questionnaire.
| Topics covered include, among others:
• The effectiveness of the Board’s leadership structureProcesses and the Board committee structure;
• Practices Board and committee skills, composition, diversity, and succession planning;
• Board culture and dynamics, including the effectiveness of discussion and debate at Board and committee meetings;
• The quality of Board and committee agendas and the appropriateness of Board and committee priorities; and
• Board/management dynamics, including the quality of management presentations and information provided to the Board and committees.
| Interviews | Individual director interviews– each director participates in a confidential, open-ended, one-on-one interview to solicit input and perspective on Board and committee effectiveness.
Senior management interviews– Members of Walmart’s senior executive team also participate in confidential, one-on-one interviews designed to solicit management’s perspective on the Board’s effectiveness, engagement, and the dynamic between the Board and management.
| Action Items
These evaluations have consistently found that the Board and Board committees are operating effectively.
| Over the past few years, this evaluation process has contributed to various refinements in the way the Board and committees operate, including:
• reducing the size of the Board to promote engagement and input into our strategic decision-making;
• changing the Board committee structure to create a separate Compensation and Management Development Committee and a Nominating and Governance Committee;
• changing committee assignments so that Independent Directors sit on one “strategy” committee and one “governance” committee;
• ensuring that Board and committee agendas are appropriately focused on strategic priorities and provide adequate time for director input;
• additional responsibilities for our Lead Independent Director, including active participation in the agenda-setting process for the Board and committees; and
• increased focus on continuous Board succession planning and Board refreshment.
|
30Walmart | 2017 Proxy Statement•Corporate Governance
Board Refreshment and Succession Planning
The NGC is responsible for identifying and evaluating potential director candidates, for reviewing the composition of the Board and Board committees, and for making recommendations to the full Board on these matters. Throughout the year, the NGC actively engages in Board succession planning, taking into account the following considerations:
o | Input from Board discussions and from the Board and Board committee evaluation processregarding the specific backgrounds, skills, and experiences that would contribute to overall Board and committee effectiveness; and | | | o | The future needs of the Board and Board committeesin light of the Board’s tenure policies, Walmart’s strategy, and the skills and qualifications of directors who are expected to retire in the future. |
Director Tenure Policies Director Onboarding Director Recruitment Board/Committee EvaluationsAllow Board to anticipate future Board turnover Tailored onboarding enables new directors to contribute quickly Identify skill sets that would enhance Board effectiveness Identify top director talent with desired background and skill sets The Board believes that a mix of longer-tenured directors and newer directors with fresh perspectives contributes to an effective Board. In order to promote thoughtful Board refreshment, the Board has adopted the following retirement policies for Independent Directors, as described in Walmart’s Corporate Governance Guidelines:Term Limit: Independent Directors are expected to commit to at least six years of service, and may not serve for more than 12 years. For example, Linda Wolf joined our Board in 2005 and is retiring from the Board this year.Retirement Age: Unless they have not yet completed their initial six-year commitment, Independent Directors may not stand for reelection after age 75.
The Board may make exceptions to these retirement policies if circumstances warrant. For example, the Board could extend the term limit or retirement age for an individual director with particular skills or qualifications that are valuable to the Board’s effectiveness until a suitable replacement is found. Similarly, an Independent Director may retire before serving 12 years in order to “stagger” turnover on the Board or a Board committee. The Board believes these policies provide discipline to the Board refreshment process, and have resulted in a diverse Board with an effective mix of skills, experiences, and tenures, as shown on page 9.
As a part of the process of identifying potential director candidates, the NGC may consult with other directors and senior officers and may engage a search firm to assist in the process. If the NGC decides to proceed with further consideration of a potential candidate, the Chair of the NGC and other members of the NGC, as well as other members of the Board, may interview the candidate. The NGC then may recommend that the full Board appoint or nominate the candidate for election to the Board. Carla Harris is standing for election to the Board for the first time at the 2017 Annual Shareholders’ Meeting. Ms. Harris was identified as a potential director candidate by a director candidate search firm, and her nomination was the result of the process outlined above.
Director Onboarding and Engagement
All directors are expected to invest the time and energy required to quickly gain an in-depth understanding of our business and operations in order to enhance their strategic value to our Board. Shortly after joining our Board, each new director is partnered in a mutual mentoring relationship with a member of senior management, and each new director has “learn the business” meetings with the leaders of key operational and corporate support functions. Typically, at least one Board meeting each year is held at a location away from our home office, usually in a market in which we operate. In connection with these Board meetings, our directors learn more about the local business market through meetings with our business leaders in these markets, visits to our stores and other facilities in the local market, and visits to the stores of our competitors. We also typically hold one Board meeting per year at one of our e-commerce offices, where our Board members participate in intensive sessions focused on our e-commerce strategies and operations.
Corporate Governance•Walmart | 2017 Proxy Statement 31
Our Board members are also expected to participate in other company activities and engage directly with our associates at a variety of events throughout the year. Activities and events that members of our Board participated in since the beginning of fiscal 2017 include:
o | attending Walmart leadership meetings and traveling with senior business leaders on trips to domestic and international markets; | | | o | attending a summit of our CFOs from our worldwide markets; | | | o | attending a summit of our controllers from our worldwide markets; | | | o | touring facilities with our compliance associates; | | | o | speaking at various culture, diversity and inclusion events held at our home office in Bentonville, Arkansas and other locations; and | | | o | attending and speaking at meetings of Walmart business segments, divisions, and corporate support departments. |
Management Development and Succession Planning
Our Board places a high priority on senior management development and succession planning. The CMDC has primary responsibility for overseeing the succession planning and retention practices for our Executive Officers and other senior leaders. Executive Officer succession planning and senior management development is a regular topic on the agendas for the meetings of the CMDC.
At these meetings, the members of our CMDC, in consultation with our CEO, our Executive Vice President – Global People, and others as the CMDC may deem appropriate, engage in comprehensive deliberations regarding the development and evaluation of current and potential senior leaders, as well as the development of executive succession plans, including succession plans for our CEO position. This process has contributed to two successful CEO transitions since 2009. The Board has also adopted a CEO succession planning process to address unanticipated events and emergency situations.
32Walmart | 2017 Proxy Statement•Corporate Governance
The Board’s Role in Risk Oversight
Taking reasonable and responsible risks is an inherent part of Walmart’s business and is critical to our continued innovation, growth, and achievement of our strategic objectives. The Board and the Board committees actively oversee and monitor the management of the most significant risks that could impact our company’s operations. The Board does not view risk in isolation, but instead considers risk in conjunction with its oversight of Walmart’s strategy and operations.
Walmart identifies, assesses, and assigns responsibility for managing risks through its annual enterprise risk assessment process, other internal processes, and internal control environment. The Board, Board committees, and management coordinate the risk oversight role in a manner that serves the long-term interests of our company and our shareholders through established periodic reporting and open lines of communication.
Board Oversight •Has primary responsibility for overseeing risk management•Evaluates and approves strategic objectives and defines risk tolerance•Delegates certain risk management oversight responsibilities to Board committees•Receives regular reports from Board Committee chairs regarding risk-related mattersTechnology and eCommerceCommittee Key risks overseen o Integration of information technology, e-commerce, and innovation efforts with overall strategy o Emerging trends in technology and e-commerceStrategic Planning and FinanceCommittee Key risks overseen O Financial status and financial matters, including capital expenditures, annual financial plans and dividend policies o Long-range strategic plans o Potential acquisitions and divestituresAudit Committee Key risks overseen o Overall risk identification, monitoring, and mitigation processes and policies o Financial statement, systems and reporting o Legal, ethics and compliance o Information technology, data security and cybersecurity o Related person transactions o Internal investigatory mattersCompensation andManagement DevelopmentCommittee Key risks overseen o Senior executive compensation o Senior executive succession planningNominating and GovernanceCommittee Key risks overseen o Corporate governance o Director succession planning o Social, community, sustainability and charitable giving initiatives o Legislative affairs and public policy engagement strategyOperational andStrategic ManagementCommitteesLegal, Regulatoryand Compliance RiskManagement CommitteesFinancial RiskManagement CommitteesEnterprise RiskManagementGlobal Audit ServicesManagement Oversight Responsible for enterprise risk assessment and day-to-day management of risks such as:•Strategic risk•Reputational risk•Financial risk•Legal, regulatory and compliance risk•Operational risk, including, but not limited to: • Supply chain risk • Information systems and cybersecurity riskBOARD MANAGEMENT
Additional information regarding the roles and responsibilities of our Board committees can be found under “Board Committees” beginning on page 23.
Corporate Governance•Walmart | 2017 Proxy Statement33
Board Oversight of Legislative Affairs, Public Policy Engagement, Charitable Giving, and Sustainability
The NGC reviews and advises management regarding the company’s legislative affairs and public policy engagement strategy, as well as the company’s charitable giving strategy and other social, community, and sustainability initiatives. Walmart engages in the political process when we believe that doing so will serve the best interests of the company and our shareholders. Walmart is committed to engaging in the political process as a good corporate citizen and in a manner that complies with all applicable laws. Over the years, Walmart has provided greater transparency regarding the company’s political engagement. Beginning in 2015, we compiled lobbying disclosure information from our U.S. state-level public filings and presented them on our corporate website, and beginning in 2016 we also included on our corporate website the lobbying expense from our public filings at the U.S. federal level.
Global Responsibility Report
Since 2007, our company has prepared and produced a report describing our company’s progress and initiatives regarding sustainability and other environmental, social, and governance (“ESG”) matters. For the most recent information regarding Walmart’s engagement in the political process, as well as other ESG matters, please see our most recent Global Responsibility Report, available athttp://corporate.walmart.com/global-responsibility. Walmart’s Government Relations Policy is also available athttp://corporate.walmart.com/policies.
|
Shareholder Outreach and Engagement
We recognize the value of listening and taking into account the views of our shareholders, and the relationship with our shareholders is an integral part of our corporate governance practices. We conduct shareholder outreach throughout the year to ensure that management and the Board understand and consider the issues of importance to our shareholders and are able to address them appropriately.
Senior leaders and subject matter experts from the company meet regularly with representatives at many of our top institutional shareholders and leading proxy advisory firms to discuss Walmart’s strategy, governance practices, executive compensation, compliance programs, and other ESG related matters. Members of our Board participate from time to time in these meetings. Management reports regularly to the CMDC and NGC about these meetings, including feedback on these diverse topics and concerns raised by our shareholders.
We are continuing this program of shareholder engagement during fiscal 2018, in addition to our customary participation at industry and investment community conferences, investor road shows, and analyst meetings. We also have incorporated into this proxy statement some of the feedback we received during these meetings. We also respond to individual shareholders who provide feedback about our business. We have had success engaging with parties to understand shareholder concerns and reaching resolutions on issues that are in the best interests of our shareholders, and we remain committed to these ongoing initiatives.
Active Ongoing Shareholder Engagement
o Board members, senior leaders and/or subject matter experts actively solicit feedback from our large shareholders on strategy, governance, compensation, and other topics. During fiscal 2017, we engaged with more than half of our 60 largest institutional shareholders.
o The CMDC and NGC receive regular reports on this engagement.
o We welcome feedback from all shareholders, who can contact our Global Investor Relations team by:
• calling 1-479-273-6463
• emailingIRinqu@wal-mart.com
• using Walmart’s Global Investor Relations app, available for free in iTunes and Google Play
• visitinghttp://stock.walmart.com
|
34 Walmart | 2017 Proxy Statement•Corporate Governance
How We Determine Director Independence Our Board is committed to ensuring its membership consists of the right mix of skill sets in light of Walmart’s strategy, the Board’s tenure policies, and the Board’s desire to maintain at all times a majority of directors who are independent in accordance with the NYSE Listed Company Rules. Historically, three members of the Walton family have been members of our Board, and the NGC and the Board believe this is appropriate in light of the Walton family’s significant and long-term Share ownership. Our CEO also serves on the Board, and our former CEOs have historically served on the Board for a period of time after they retire. Our incoming CEOs have supported this practice, and we believe this practice has contributed to successful CEO transitions during our company’s history. Consistent with our Board’s commitment to independent Board oversight, the Board generally seeks to fill the remaining Board seats with directors who are independent as defined in the NYSE Listed Company Rules. In making independence determinations, the Board complies with all NYSE criteria, and with respect to Board committee membership, certain SEC criteria, and considers all relevant facts and circumstances. Under the NYSE Listed Company Rules, to be considered independent: o● | the director must not have a disqualifying relationship, as described in the NYSE Listed Company Rules; and | | | o● | the Board must affirmatively determine that the director otherwise has no direct or indirect material relationship with our company. |
ToThe Board has adopted materiality guidelines that it considers and uses to aid in the director independence assessment process, the Board has adopted materialitydetermination process. While not determinative of independence, these guidelines that identify the following categories of relationships that the Board has determined will generally not affect a director’s independence.
| Materiality Guideline | | Description | Ordinary Retail
Transactions | | The director, an entity with which a director is affiliated, or one or more members of the director’s immediate family, purchased property or services from Walmart in retail transactions on terms generally available to Walmart associates during Walmart’s last fiscal year. | | | | Immaterial
Ownership | | The director or one or more members of the director’s immediate family owns or has owned during the entity’s last fiscal year, directly or indirectly, 5% or less of an entity that has a business relationship with Walmart. | | | | Immaterial
Transactions | | The director or one or more members of the director’s immediate family owns or has owned during the entity’s last fiscal year, directly or indirectly, more than 5% of an entity that has a business relationship with Walmart, so long as the amount paid to or received from Walmart during the entity’s last fiscal year accounts for less than $1,000,000 or, if greater, 2% of the entity’s consolidated gross revenues for that entity’s last fiscal year.
The director or a member of the director’s immediate family is or has been during the entity’s last fiscal year an executive officer or employee of an entity that made payments to, or received payments from, Walmart during the entity’s last fiscal year that account for less than $1,000,000 or, if greater, 2% of the entity’s consolidated gross revenues for that entity’s last fiscal year. | | | | Immaterial
Positions | | The director or one or more members of the director’s immediate family is a director or trustee or was a director or trustee (but not an executive officer or employee) of an entity during the entity’s last fiscal year that has a business or charitable relationship with Walmart and that made payments to, or received payments from, Walmart during the entity’s last fiscal year in an amount representing less than $5,000,000 or, if greater, 5% of the entity’s consolidated gross revenues for that entity’s last fiscal year.
Walmart paid to, employed, or retained one or more members of the director’s immediate family for compensation not exceeding $120,000 during Walmart’s last fiscal year. | | | | Immaterial
Benefits | | The director or one or more members of the director’s immediate family received from Walmart, during Walmart’s last fiscal year, personal benefits having an aggregate value of less than $5,000. |
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Table of Contents Corporate Governance•Walmart | 2017 Proxy Statement35 In April 2017,2020, the Board and the NGC conducted their annual review of directors’ relationships that may be relevant to independence, based on the directors’ responses to a questionnairequestionnaires soliciting information regarding their (and their immediate family members’) direct and indirect relationships with the company (and the directors’ immediate family members’ direct and indirect relationships with the company) and other relationships that may be relevant to independence. They also reviewed due diligence performed by management regarding any transactions, relationships, or arrangements between the company and the directors, and director nomineetheir immediate family members, or parties related to the directors and director nominee. affiliated entities. As a result of this review, the Board has affirmatively determined that the following director nomineesdirectors are Independent Directors under the general independence standards set forthdefinition in the NYSE Listed Company Rules: James I. Cash, Jr.;Cesar Conde; Timothy P. Flynn; Sarah J. Friar; Carla A. Harris; Thomas W. Horton; Marissa A. Mayer; and Steven S Reinemund; and Kevin Y. Systrom. The Board has also determined that Linda S. Wolf, who is not standing for reelection at the 2017 Annual Shareholders’ Meeting, is an Independent Director.Reinemund. In addition, the Board determined that the currently serving members of the Audit Committee and the CMDC meet the heightened independence standards for membership on those Board committees under the NYSE Listed Company Rules, the Exchange Act, and the SEC’s rules. The Board also determined that Aida M. Alvarez and Roger C. Corbett,Stephen J. Easterbrook, who did not stand for reelection atresigned from the 2016 Annual Shareholders’ Meeting and, therefore, ceased to be directors of Walmart on June 3, 2016, wereBoard effective November 4, 2019, was independent and in the case of Ms. Alvarez, met the heightened independence standards under the NYSE Listed Company Rules and the SEC’s rules for compensation committee membership duringwith respect to the portion of fiscal 20172020 during which theyhe served on the Board. In making its determination as to the independence of our Independent Directors, the Board considered whether any relationship between a director and Walmart is a material relationship based on the materiality guidelines discussed above, the facts and circumstances of the relationship, the amounts involved in the relationship, the director’s interest in such relationship, if any, and such other factors as the Board, in its judgment, deemed appropriate. In each case, the Board found all relationships between the relationship withcompany and each of our Independent Directors to be immaterial to the director’s independence. The types of relationships considered by the Board are noted below: | Relationship Type | | Director or Nominee | Immaterial Ownership:The director or nomineethe director’s immediate family member directly or indirectly owned 5% or less of, but was not a director, officer, or employee of, an entity that has a business relationship with Walmart | | Mr. Conde | | Ms. Mayer | | Immaterial Transactions:The director’s immediate family member directly or indirectly owned more than 5% of, but was not a director or employee of, an entity that has a business relationship with Walmart | | Ms. Mayer | Immaterial Transactions and Immaterial Ownership:The director was an officer and 5% or less equity owner of an entity that has a business relationship with Walmart vendor or service provider | | Mr. Conde | | Mr. Easterbrook | | Ms. Friar | | Ms. Harris | | Ms. MayerMr. Horton | | Mr. Systrom | Immaterial Transactions and Immaterial Ownership:Immediate family members of the director were employees or officers and less than 5% equity owners of entities that have a business relationship with Walmart vendors or service providers | Ms. Alvarez | Mr. Conde | | Dr. CashMr. Easterbrook | | Mr. Corbett | | Mr. Flynn | | Ms. Friar | | Mr. Horton | | Mr. Reinemund | | Ms. Wolf | Immaterial Positions and Immaterial Ownership:The director was either a director or trustee of and less than 5% equity owner of an entity that has a business relationship with Walmart vendor or service provider | Ms. Alvarez | Mr. Conde | | Dr. CashMr. Easterbrook | | Mr. Corbett | | Mr. Flynn | | Ms. MayerFriar | | Mr. Horton | | Mr. Reinemund | Immaterial Position:Walmart employed one or more membersa member of the nominee’sdirector’s immediate family for compensation not exceeding $120,000 during Walmart’s last fiscal year | | Ms. Harris |
36 Walmart | 2017 Proxy Statement•Corporate Governance
The aggregate amounts involved in each of the relationships and transactions described in the preceding table were either: (i) less than $1 millionmillion; or (ii) if greater 1%than $1 million, then the aggregate amounts involved were less than 2% of the consolidated gross revenues for the entity’s last fiscal year, with the exception of certain relationships involving Mr. CorbettConde and Mr. Reinemund. Mr. Corbett servedConde serves as a directormember of the board of directors of a Walmart vendor that received payments from Walmart during the entity’s last fiscal year in an amount that was less than 5% of that entity’s consolidated gross revenues for that entity’s last fiscal year. In light of these facts, the Board determined that this relationship was not material to Mr. Corbett’s independence. In addition, immediate family members of Mr. Corbett and Mr. Reinemund are or were employed by or had a less than 5% indirect ownership interest in (but are not executive officers of) a Walmart supplier or vendor that received payments from Walmart during the entity’s last fiscal year that accountaccounted for more than 5% of the entity’s consolidated gross revenues for its last fiscal year. The Board determined that this relationship was immaterial to Mr. Conde’s independence because, in his capacity as a
Table of Contents Corporate Governance member of the board of directors of the entity: (i) Mr. Conde is not and was not involved in any sales or marketing of products to Walmart; and (ii) he does not and has not received any material direct or indirect economic benefit from the relationship between Walmart and the entity. The payments by Walmart to the entity were for products in the ordinary course of business, and Walmart has had a relationship with this entity since a time prior to Mr. Conde’s membership on the board of this entity. Immediate family members of Mr. Reinemund are employed by and have a less than 5% ownership interest in (but are not executive officers of) Walmart suppliers or vendors that received payments from Walmart during each entity’s last fiscal year that accounted for more than 2% of the entity’s consolidated gross revenues for that entity’s last fiscal year. The Board determined these relationships were immaterial to each director’sMr. Reinemund’s independence because in each case neither the directorMr. Reinemund nor thehis immediate family member: (i) is or was an executive officer of the entity; (ii) ishas or was involvedhad a material direct or indirect economic interest in the negotiation of transactions or the business relationship between Walmart and the entity; (iii) does or did receive compensation from the entity based on the marketing or sale of the entity’s goods or services toand Walmart; or (iv)(iii) had an advancement within or continued employment with such entity based on the marketing or sale of the entity’s goods or services to Walmart. Further, the payments made by Walmart to the entities,each entity, or by the entitieseach entity to Walmart, were for various products and services in the ordinary course of business, and Walmart has had a relationship with these entities for many yearseach entity since a time prior to the directors’Mr. Reinemund’s immediate family members’member’s employment with these entities.each entity. Pamela J. Craig, a director since 2013, previously has been deemedThe Board does not believe S. Robson Walton, Gregory B. Penner, or Steuart L. Walton have any relationships with Walmart that would disqualify them from being considered independent by the Board during each year of her service. As part of its annual review, the Board recently determined that Ms. Craig is not independent within the technical meaning of the term “independent” under the NYSE Listed Company Rules. TheHowever, the Board has deferred its determination is based uponas to their independence. If the 2016 promotionBoard had made such an independence determination, then 10 of Ms. Craig’s brother-in-law11 of our director nominees, or approximately 91%, would have been independent.
In addition, although the Walton family holds approximately 50% of our company’s Shares, we have not and do not plan to executive officer of a supplier to Walmart. Payments from Walmart account for more than 2%rely on any of the supplier’s annual consolidated gross revenues. Except forexemptions from certain board independence requirements available to controlled companies under the technical independence disqualification, theNYSE Listed Company Rules. Our Board otherwise considers Ms. Craigis committed to maintaining a majority independent due to the fact that Ms. Craig’s brother-in-law is responsible for a region with the supplier for which Walmart does a de minimis amount of business and that neither Ms. Craig nor her brother-in-law have a direct or indirect material interest in the relationship between Walmart and the supplier. As a result of the technical disqualification, Ms. Craig resigned from the Audit Committee. The Board and Ms. Craig have mutually agreedbelieves that she will not stand for reelection to the Board at the 2017 Annual Shareholders’ Meeting consistent withthis independence ensures robust oversight, independent viewpoints, and promotes the Board’s view on its independence and composition described above. overall effectiveness. The Board and the NGC concluded that each of the Independent Directors does not currently have, and has not had during any pertinent period, any direct or indirect relationship that: (i) constitutes a disqualifying relationship with Walmart under the NYSE Listed Company Rules; (ii) otherwise compromises the independence of such directors;director; or (iii) otherwise constitutes a material relationship between Walmart and the directors. director. |
Corporate Governance•Walmart | 2017 Proxy Statement37
Related Person Transaction Review Policy The Board has adopted a written policy applicable to all Walmart officers who serve as executive vice presidents or above;Executive Officers; all directors and director nominees; all shareholders beneficially owning more than five percent of Walmart’s outstanding Shares; and the immediate family members of each of the preceding persons (collectively, the “Covered Persons”). Any entity in which a Covered Person has a direct or indirect material financial interest or of which a Covered Person is an officer or holds a significant management position (each, a “Covered Entity”) is also covered by the policy. The Transaction Review Policy applies to any transaction or series of similar or related transactions in which a Covered Person or Covered Entity has a direct or indirect material financial interest and in which Walmart is a participant (each, a “Covered Transaction”). Under thisthe Transaction Review Policy, each Covered Person is responsible for reporting to Walmart’s chief audit executiveOffice of the Corporate Secretary any Covered Transactions of which he or she has knowledge. Walmart’s chief audit executive,Office of the Corporate Secretary, with the assistance of Walmart’s chief audit executive, chief ethics and compliance officer, and other appropriate Walmart personnel, reviews each Covered Transaction and submits the results of such reviewprovides information to the Audit Committee.Committee for its consideration regarding the Covered Transaction, including: the view or opinion from the business unit desiring to enter into the transaction as to the benefits of the proposed transaction to the company; a point of view from the company’s corporate affairs department as to the reputational impact, if any, of the company entering into the transaction; the view and opinion from the global audit executive as to the fairness of the transaction to the company and its shareholders and whether the transaction was negotiated on an arm’s-length basis; and an opinion from the Office of the Corporate Secretary as to whether the Covered Person has otherwise complied with Walmart’s Statement of Ethics as it applies to the transaction. The Audit Committee reviews each Covered Transaction and either approves or disapproves the transaction. To approve a Covered Transaction, the Audit Committee must find that: o● | the substantive terms and negotiation of the Covered Transaction are fair to Walmart and its shareholders and the substantive terms are no less favorable to Walmart and its shareholders than those in similar transactions negotiated at an arm’s-length basis; and |
o● | if the Covered Person is a director or officer of Walmart, he or she has otherwise complied with the terms of Walmart’s Global Statement of Ethics as it applies to the Covered Transaction. |
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Table of Contents
Corporate Governance Related Person Transaction Process The following chart shows our process for identification and disclosure of related person transactions. 
Proxy Statement Disclosure Director Independence Determinations Related Person Transaction DeterminationsAnnual disclosures published in our proxy statement as required by SEC rules Nominating and Governance Committee and Board conduct annual determination of director independence Walmart’s Legal department conducts annual review and determination of related person transactions If deemed material, the related person transaction is presented for Audit Committee review, approval or ratification Information sources:•Annual Director and Officer Questionnaires • Schedule 13G Filings • Section 16 Reporting • Management due diligence reviews Information sources:•Annual Director and Officer Questionnaires • Management due diligence reviews Certain related person transactions are disclosed in our proxy statement as required by SEC rules
38 Walmart | 2017 Proxy Statement•Corporate Governance
| Related Person Transaction Determinations | | Director Independence Determinations | | Proxy Statement Disclosure | | | | | | Walmart’s Office of the Corporate Secretary conducts an annual review and determination of related person transactions Related person transactions are presented for Audit Committee review and approval or ratification | | The NGC and Board conduct annual determination of director independence, considering the directors’ (and their immediate family members’) direct and indirect relationships with the company | | Annual disclosures published in our proxy statement as required by SEC rules (including required related person transaction disclosures) | | | | | | |
| | | | | Information sources: ●Annual Director, Executive Officer, and Principal Shareholder Questionnaires●Schedule 13G filings ●Section 16 reporting ●Management due diligence reviews | Information sources: ●Annual Director, Executive Officer, and Principal Shareholder Questionnaires ●Management due diligence reviews | | |
Fiscal 20172020 Review of Related Person Transactions Our company’s Legal Department reviews each Covered Person transaction that exceeds $120,000, The purposeOffice of this review is to determine whether the related person has a direct or indirect material interest in the transaction. Our Legal DepartmentCorporate Secretary has developed and implemented processes and controls for identifying and obtaining information about proposed or existing related person transactions frombetween the company and our directors, director nominees, Executive Officers, and principal shareholders.shareholders, their immediate family members (collectively, the “related persons”), or entities in which one or more of these related persons has a specified relationship or ownership interest. The Legal DepartmentOffice of the Corporate Secretary analyzes each related personidentified transaction, and, basedwith the exception of ordinary course retail transactions. Based upon the facts and circumstances of each transaction, the Office of the Corporate Secretary determines whether the related person has or will have a material direct or indirect interest in the transaction. If so, underTransactions in which Walmart is a participant, the company’s Transaction Review Policy, thenamount involved exceeds $120,000, and the Office of the Corporate Secretary has determined that the related person has a direct or indirect material interest are referred to as “related person transactions.” Each related person transaction is presented to the Audit Committee for its review and approval or ratification. As described in our “Transaction Review Policy”,Policy,” the Audit Committee also considers the following factors when reviewing a related person transaction:
○● | the nature of the related person’s interest in the transaction; | | | ○● | the substantive terms of the transaction, including the type of transaction and the amount involved; | | | ○● | opinions from the company’s internalchief audit functionexecutive and global ethics officeOffice of the Corporate Secretary regarding the fairness of the transaction to ourthe company; and | | | ○● | any other factors the Audit Committee deems appropriate.appropriate, including, but not limited to, points of view from the relevant business unit as to the benefits of engaging in the transaction and from the company’s corporate affairs department as to any potential reputational impacts of engaging in the transaction. |
| We disclose in this proxy statement all transactions in which a related person has been determinedtransactions that are required to have a material interest and the amount involved exceeds $120,000, as requiredbe disclosed under applicable SEC rules. Walmart believes that the terms of the transactions described below are comparable to terms that would have been reached by unrelated third parties in arm’s-length transactions. The Audit Committee has approved each of the transactions disclosed below. | | |
Table of Contents Corporate Governance ○● | On September 19, 2016, Walmart acquired Jet.com Inc. (“Jet”) in a merger transaction, with JetJet.com becoming a wholly-owned subsidiary of Walmart. The aggregate transaction consideration paid by the company consisted of a combination of cash of approximately $3.0 billion and restricted stock units representing the right to receive shares of Walmart common stockShares determined using the closing date trading price equal to approximately $300 million. Marc E. Lore, the founder and largest stockholder of JetJet.com (approximately 15.9% of the outstanding JetJet.com shares on a fully-diluted basis), received the right to approximately $477 million in cash consideration payable by the company for his JetJet.com shares as part of the merger transaction. Of this amount, approximately $80 million was paidtransaction over the five-year period following the closingtransaction. Mr. Lore received cash consideration payments related to the transaction of the transaction.approximately $186 million in prior fiscal years and approximately $88 million in fiscal 2020. The remaining approximately $397$203 million of cash consideration from the transaction will be paid to Mr. Lore over the five yearnext two years. Mr. Lore’s portion of the transaction equity consideration consisted of restricted stock units for 3,554,093 Shares vesting over the five-year period following the closing date of the transaction, subjecttransaction. During fiscal 2020, Walmart issued 770,524 Shares to Mr. Lore pursuant to such restricted stock units that vested in fiscal 2020. In order for Mr. Lore to receive the remaining an associatecash consideration payments and the remaining portion of the equity consideration, Mr. Lore generally must continue to be employed by Walmart during such period.through the various payment and vesting dates. However, if Walmart terminates Mr. Lore’s employment without cause or Mr. Lore resigns for good reason, Mr. Lore willhe would continue to receive thesebe entitled to the remaining cash payments overin accordance with the five year period following the closing date of the transaction. Mr. Lore’s portion of the transaction equity consideration consisted ofpayment schedule and any unvested restricted stock units for 3,554,093 shares of Walmart stockwould continue to vest in accordance with the vesting over the five year period following the closing date of the transaction, subject to Mr. Lore remaining an associate of Walmart during such period as further discussed and described in the footnotes to the Summary Compensation table on page 74.schedule. Mr. Lore is the Executive Vice President, – President and Chief Executive Officer, U.S. eCommerce, of Walmart. His employment with Walmart in this role began immediately following the closing of the transaction. | | | ○ | Walmart currently proposes to pay Some Spider Inc. (“Some Spider”), an internet marketing company, approximately $350,000 for internet marketing services during fiscal 2018 and may engage in additional transactions during fiscal 2018 that may exceed $120,000 in the aggregate. Marc E. Lore, an Executive Officer of Walmart, owns 20% of the outstanding capital stock of Some Spider. We cannot estimate the dollar value of Mr. Lore’s interest in such transaction as that amount will depend in large measure on the dividends paid on the stock of Some Spider held by Mr. Lore and the appreciation, if any, in the fair value of that stock that would be attributable to the proposed transaction described above. | | | ○● | Lori Haynie, the sister of C. Douglas McMillon, a director of Walmart and an Executive Officer, is an executive officer of Mahco, Incorporated (“Mahco”). During fiscal 2017,2020, Walmart paid Mahco and its subsidiaries approximately $21.0$39 million in connection with Walmart’s purchases of sporting goods and related products. Walmart expects to purchase similar types of products from Mahco during fiscal 2018. |
Corporate Governance•Walmart | 2017 Proxy Statement39
○ | During fiscal 2017, certain banking subsidiaries of a bank holding company that is collectively owned by Mr. Jim C. Walton, Mr. S. Robson Walton, and certain members of the Walton family and related trusts, made payments to Walmart in the aggregate amount of approximately $310,000 for supercenter, discount store, and Neighborhood Market banking facility rent pursuant to negotiated arrangements. The banking subsidiaries made other payments to Walmart pursuant to similar arrangements that were awarded by Walmart on a competitive-bid basis. The leases of banking facility space in various stores remain in effect, and we anticipate that in fiscal 2018 such banking subsidiaries will pay Walmart approximately $220,000 pursuant to those leases not awarded on a competitive-bid basis. Mr. Jim C. Walton is the father of Steuart L. Walton, a director of Walmart.2021. | | | ○ | Stephen P. Weber, a management associate in Walmart’s Information Systems Division, is the son-in-law of Michael T. Duke, a former director of Walmart who did not stand for reelection as a director at the 2016 Annual Shareholders’ Meeting. For fiscal 2017, Walmart paid Mr. Weber a salary of approximately $135,150, a payment pursuant to the cash incentive plan of approximately $31,000 and other benefits totaling approximately $15,500 (including Walmart’s matching contributions to Mr. Weber’s 401(k) Plan account and health insurance premiums). In fiscal 2017, Mr. Weber also received a grant of 510 restricted stock units having a calculated value of approximately $34,500 at the date of grant. Mr. Weber continues to be an associate, and, in fiscal 2018, he may receive compensation and other benefits in amounts similar to or greater than those he received during fiscal 2017. | | | ○● | Greg T. Bray, a management associate in Walmart’s Finance department, is the brother-in-law of C. Douglas McMillon, a director of Walmart and an Executive Officer. For fiscal 2017,2020, Walmart paid Mr. Bray a salary of approximately $215,000,$242,100, a payment pursuant to the cash incentive plan of approximately $77,000,$90,650, and other benefits totaling approximately $25,500$30,000 (including Walmart’s matching contributions to Mr. Bray’s 401(k) Plan account, Walmart’s matching contributions to Mr. Bray’s Deferred Compensation Matching Plan account, and health insurance premiums). In fiscal 2017,2020, Mr. Bray also received a grant of 653608 restricted stock units with a calculated value of approximately $44,000$60,000 at the date of grant. Mr. Bray continues to be an associate, and, in fiscal 2018,2021, he may receive compensation and other benefits in amounts similar to or greater than those he received during fiscal 2017.2020. | | | ○● | Nichole R. Bray, a management associate in the company’sWalmart’s Information Systems Division, is the sister-in-law of C. Douglas McMillon, a director of Walmart and an Executive Officer. For fiscal 2017,2020, Walmart paid Ms. Bray a salary of approximately $140,200,$154,400, a payment pursuant to the cash incentive plan of approximately $31,500,$55,300, and other benefits totaling approximately $23,200$26,000 (including Walmart’s matching contributions to Ms. Bray’s 401(k) Plan account and health insurance premiums). In fiscal 2016,2020, Ms. Bray also received a grant of 510659 restricted stock units having a calculated value of approximately $34,500$65,000 at the date of grant. Ms. Bray continues to be an associate, and, in fiscal 2018,2021, she may receive compensation and other benefits in amounts similar to or greater than those she received during fiscal 2017.2020. | | ● | | ○ | Jessica R. Salmon,Stephen Furner, a management associate in Walmart’s Finance department,manager at a Walmart Neighborhood Market, is the daughterfather of Rollin L. Ford, who wasJohn R. Furner, an Executive Officer of Walmart for a portion of fiscal 2017 through July 31, 2016.Walmart. For fiscal 2017,2020, Walmart paid Ms. SalmonMr. Stephen Furner a salary of approximately $114,000,$86,700, a payment pursuant to the cash incentive plan of approximately $17,000,$58,500, and other benefits totaling approximately $11,500$500. Mr. Stephen Furner continues to be a Walmart associate, and, in fiscal 2021, he may receive compensation and other benefits from Walmart in amounts similar to or greater than those he received during fiscal 2020. | | ● | Jason Turner, a management associate in Walmart U.S., is the brother-in-law of John R. Furner, an Executive Officer of Walmart. For fiscal 2020, Walmart paid Mr. Turner a salary of approximately $92,100, a payment pursuant to the cash incentive plan of approximately $35,000, and other benefits totaling approximately $16,000 (including Walmart’s matching contributions to Ms. Salmon’sMr. Turner’s 401(k) Plan account and health insurance premiums). In fiscal 2017, Ms. Salmon2020, Mr. Turner also received a grant of 175152 restricted stock units havingwith a calculated value of approximately $12,000$15,000 at the date of grant. Ms. SalmonMr. Turner continues to be an associate, and, in fiscal 2018, she may receive compensation and other benefits in amounts similar to or greater than those she received during fiscal 2017. | | | ○ | Brian Salmon, a management associate at Walmart, is the son-in-law of Rollin L. Ford, who was an Executive Officer for a portion of fiscal 2017. For fiscal 2017, Walmart paid Mr. Salmon a salary of approximately $117,200, a payment pursuant to the cash incentive plan of approximately $26,500, and other benefits totaling approximately $11,000 (including Walmart’s matching contributions to Mr. Salmon’s 401(k) Plan account and health insurance premiums). In fiscal 2017, Mr. Salmon also received a grant of 175 restricted stock units having a calculated value of approximately $12,000 at the date of grant. Mr. Salmon continues to be an associate, and, in fiscal 2018,2021, he may receive compensation and other benefits in amounts similar to or greater than those he received during fiscal 2017.2020. | | ● | | ○ | Brittney Duke,During fiscal 2020, Walmart entered into an agreement with Quibi Holdings, LLC (“Quibi”), under which Quibi agreed to provide advertising services and for which Walmart agreed to pay $15 million, payable during fiscal 2020 and fiscal 2021. Greg Penner, the Chairman of Walmart’s Board, is a vice president in Walmart’s Marketing department, ismember of Quibi’s board of directors. In addition, members of the daughter of Michael T. Duke,Walton family, including Mr. Penner; S. Robson Walton, a former director of Walmart who did not stand for reelection asWalmart; Steuart L. Walton, a director at the 2016 Annual Shareholders’ Meeting. For fiscal 2017, Walmart paid Ms. Duke a salaryof Walmart; and members of their immediate family, own an aggregate equity interest in Quibi of approximately $228,000, a payment pursuant16.87%. Walmart will continue to the cash incentive plan of $47,500, a separate cash bonus of $15,000, and other benefits totaling approximately $26,100 (including Walmart’s matching contributions to Ms. Duke’s 401(k) Plan account and health insurance premiums). Inengage in transactions with Quibi during fiscal 2017, Ms. Duke also received a grant of 872 restricted stock units having a calculated value of approximately $59,000 at the date of grant. Ms. Duke continues to be an associate, and, in fiscal 2018, she may receive compensation and other benefits2021 in amounts similar to or greater than those she received duringthe amounts Walmart paid Quibi in fiscal 2017.2020. |
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Table of Contents 40Walmart | 2017 Proxy Statement•Corporate Governance
Governance Materials
Available on our Website |  |
Our Board and Board committee governance documents, including the Board committee charters, the Corporate Governance Guidelines, and other key corporate governance documents are available to our shareholders on our corporate website athttp://stock.walmart.com/investors/corporate-governance/governance-documents. You may also access and review the following additional corporate governance documents on our corporate website: | ✓ | Restated Certificate of Incorporation; | | ✓ | Amended and Restated Bylaws; | | ✓ | Corporate Governance Guidelines; | | ✓ | Code of Ethics for the CEO and Senior Financial Officers; | | ✓ | Global Statement of Ethics (available atwww.walmartethics.com); | | ✓ | Procedures for Complaints Related to Accounting or Auditing Matters; | | ✓ | Investment Community Communications Policy; | | ✓ | Fair Disclosure Procedures; | | ✓ | Global Anti-Corruption Policy; | | ✓ | Government Relations Policy; and | | ✓ | Privacy Policy. |
These materials are also available in print at no charge to any shareholder who requests a copy by writing to: Walmart Inc., Global Investor Relations Department, 702 Southwest 8th Street, Bentonville, Arkansas 72716-0100. A description of any substantive amendment or waiver of Walmart’s Code of Ethics for the CEO and Senior Financial Officers or Walmart’s Global Statement of Ethics granted to Executive Officers or directors will be disclosed on our corporate website within four business days following the date of the amendment or waiver (http://stock.walmart.com/ investors/corporate-governance/governance-documents) and will remain posted for a period of at least 12 months. There were no substantive amendments to or waivers of Walmart’s Code of Ethics for the CEO and Senior Financial Officers or Walmart’s Global Statement of Ethics granted to Executive Officers or directors during fiscal 2020.
Table of ContentsDirector Compensation Corporate Governance Walmart’s compensation program for Outside Directors is intended to: ○● | provide fair compensation commensurate with the work required to serve on the Board of a company with Walmart’s size, scope, and complexity; | | ● | | ○ | align directors’ interests with the interests of Walmart shareholders; and | | ● | | ○ | be easy to understandand communicate, both to our directors and to our shareholders. |
| Annual Benchmarking | |
Each June, the CMDC and Board undertake a comprehensive review of Outside Director compensation, including a comparison to director compensation at Walmart’s peer group companies. As a result of the review that was conducted last year, the CMDC and Board determined that our base director compensation and the additional fees for Board leadership positions described below were competitive and near the median of our peer group. Therefore, the CMDC and Board made no changes to our Outside Director compensation during fiscal 2020. Components of Director Compensation Our Outside Director compensation program consists of the following primary components: | Who is Eligible | | Component | | Annual Amount
($) | | Form of Payment | | Base Compensation – All Outside Directors | | Annual Stock Grant | | 175,000 | | Shares | | Annual Retainer | | 100,000 | | Cash | | Additional Fees – Some Outside Directors | | Non-Executive Chairman Retainer | | 225,000 | | 50% Shares/50% Cash | | Lead Independent Director Retainer | | 35,000 | | Cash | | Audit and CMDC Chair Retainers | | 25,000 | | Cash | | NGC, SPFC, and TeCC
Chair Retainers | | 20,000 | | Cash |
| Who is Eligible | | Component | Annual Amount | | Form of Payment | | Base Compensation – All Outside Directors | | Annual Stock Grant | | $ | 175,000 | | Shares | | | | Annual Retainer | | $ | 90,000 | | Cash | | Additional Fees – Some Outside Directors | | Non-Executive Chairman Retainer | | $ | 200,000 | | 50% Shares/50% Cash | | | | Lead Independent Director Retainer | | $ | 30,000 | | Cash | | | | Audit and CMDC Chair Retainers | | $ | 25,000 | | Cash | | | | SPFC and TeCC Chair Retainers | | $ | 20,000 | | Cash |
Other Compensation
EachIn addition, each Outside Director who attends in person a Board meeting held at a location that requires intercontinental travel from his or her residence is paid an additional $4,000 meeting attendance fee. Also, each member of the Audit Committee received an additional fee during fiscal 2017. Since 2011, the Audit Committee has been conducting an internal investigation into, among other things, alleged violations of the U.S. Foreign Corrupt Practices Act (the “FCPA”) and other alleged crimes or misconduct in connection with certain foreign subsidiaries, and whether prior allegations of such violations and/or misconduct were appropriately handled by Walmart. The Audit Committee and Walmart have engaged outside counsel from a number of law firms and other advisors who are assisting in the ongoing investigation of these matters. This investigation continues to result in a significant increase in the workload of the Audit Committee members, and during fiscal 2017, the Audit Committee members received frequent updates regarding the investigation via conference calls and other means of communication with outside counsel and other advisors. In light of this continuing significant additional time commitment, during fiscal 2017, the Audit Committee Chair received an additional fee of $57,500, and the other members of the Audit Committee received an additional fee of $45,000.
Form and Timing of Payment Stock grants to Outside Directors are made annually upon election to the Board at our annual shareholders’ meeting, in June.which was most recently held on June 5, 2019. If an Outside Director is appointed to the Board during a term, he or she will receive a prorated portion of the annual stock grant. Each Outside Director may elect to defer the receipt of this stock grant in the form of stock units.units that are settled in Shares following the end of the director’s Board service. The other components of Outside Director compensation listed above are paid quarterly in arrears. Each Outside Director can elect to receive these other components in the form of cash, Shares (with the number of Shares determined based on the closing price of Shares on the NYSE on the payment date), deferred in stock units, or deferred into an interest-credited cash account. Director Stock Ownership Guidelines Each Outside Director is required to own, within five years of his or her initial election to the Board, Shares or deferred stock units with a value equal to five times the annual retainer portion of the Outside Director compensation established by the Board in the year the director was initially elected. All Outside Directors who have reached the five-year compliance date own sufficient Shares or deferred stock units to satisfy this requirement. | 38 | | www.walmart.com |
Table of Contents Corporate Governance •Walmart | 2017 Proxy Statement41
Director Compensation for Fiscal 20172020 Name
(a) | | Fees Earned or
Paid in Cash
($)
(b) | | Stock
Awards
($)
(c) | | All Other
Compensation
($)
(g) | | Total
($)
(h) | | Cesar Conde | | 89,739 | | 228,209 | | 0 | | 317,948 | | Stephen J. Easterbrook | | 84,487 | | 175,008 | | 0 | | 259,495 | | Timothy P. Flynn | | 124,946 | | 175,008 | | 676 | | 300,630 | | Sarah J. Friar | | 118,018 | | 175,008 | | 0 | | 293,026 | | Carla A. Harris | | 99,909 | | 175,008 | | 1,060 | | 275,977 | | Thomas W. Horton | | 157,111 | | 175,008 | | 1,027 | | 333,146 | | Marissa A. Mayer | | 99,936 | | 175,008 | | 0 | | 274,944 | | Gregory B. Penner | | 212,590 | | 287,468 | | 0 | | 500,058 | | Steven S Reinemund | | 125,000 | | 175,008 | | 2,196 | | 302,204 | | S. Robson Walton | | 100,000 | | 175,008 | | 0 | | 275,008 | | Steuart L. Walton | | 120,066 | | 175,008 | | 0 | | 295,074 |
| | | Fees Earned or | | Stock | | All Other | | | | | | Paid in Cash | | Awards | | Compensation | | Total | | Name | | ($) | | ($) | | ($) | | ($) | | (a) | | (b) | | (c) | | (g) | | (h) | | Aida M. Alvarez | | 42,324 | | 0 | | 20,186 | | 62,510 | | James I. Cash, Jr. | | 169,000 | | 174,978 | | 19,937 | | 363,915 | | Roger C. Corbett | | 50,324 | | 0 | | 26,164 | | 76,488 | | Pamela J. Craig | | 139,000 | | 174,978 | | 5,069 | | 319,047 | | Michael T. Duke | | 38,324 | | 0 | | 243 | | 38,567 | | Timothy P. Flynn | | 176,500 | | 174,978 | | 32,886 | | 384,364 | | Thomas W. Horton | | 139,000 | | 174,978 | | 3,583 | | 317,561 | | Marissa A. Mayer | | 90,000 | | 174,978 | | 1,830 | | 266,808 | | Gregory B. Penner | | 194,000 | | 274,976 | | 0 | | 468,976 | | Steven S Reinemund | | 114,000 | | 174,978 | | 809 | | 289,787 | | Kevin Y. Systrom | | 114,000 | | 174,978 | | 0 | | 288,978 | | Jim C. Walton | | 42,324 | | 0 | | 3,606 | | 45,930 | | S. Robson Walton | | 94,000 | | 174,978 | | 0 | | 268,978 | | Steuart L. Walton | | 51,923 | | 174,978 | | 0 | | 226,901 | | Linda S. Wolf | | 119,000 | | 174,978 | | 21,148 | | 315,126 |
Explanation of information in the columns of the table: Name (column (a))
C. Douglas McMillon is omitted from this table because he received compensation only as an associate of our company during fiscal 20172020 and did not receive any additional compensation for his duties as a director.
Fees Earned or Paid in Cash (column (b))
Certain Outside Directors elected to either receive Shares in lieu of some or all of these amounts or defer these amounts in the form of deferred stock units, as shown below:below. These amounts were converted into Shares or deferred stock units quarterly using the closing price of a Share on the NYSE as of the respective payment dates.
| Director | | Amount
($) | | Number of Shares
Received in Lieu
of Cash | | Number of
Deferred Stock
Units in Lieu of Cash | | Cesar Conde | | 64,739 | | 588 | | 0 | | Stephen J. Easterbrook | | 84,487 | | 773 | | 0 | | Timothy P. Flynn | | 124,946 | | 0 | | 1,129 | | Sarah J. Friar | | 118,018 | | 0 | | 1,064 | | Carla A. Harris | | 49,909 | | 451 | | 0 | | Marissa A. Mayer | | 99,936 | | 0 | | 903 | | Gregory B. Penner | | 212,590 | | 0 | | 1,921 | | Steuart L. Walton | | 120,066 | | 0 | | 1,085 |
| | | | | Number of Shares | | Number of Deferred Stock | | | | Amount | | Received in Lieu of | | Units in Lieu of | | Director | | ($) | | Cash | | Cash | | Timothy P. Flynn | | 176,500 | | — | | 2,516 | | Marissa A. Mayer | | 90,000 | | — | | 1,275 | | Gregory B. Penner | | 194,000 | | — | | 2,745 | | Kevin Y. Systrom | | 114,000 | | 1,612 | | — | | Steuart L. Walton | | 51,923 | | — | | 733 |
Stock Awards (column (c))
In accordance with SEC rules, the amounts in this column are the aggregate grant date fair value of stock awards granted during fiscal 2017,2020, computed in accordance with theGAAP stock-based accounting rules that are part of GAAP (as set forth in Financial Accounting Standards Board’s Accounting Standards Codification Topic 718). Each Outside Director other than Mr. Penner that was elected to the Board at the 20162019 Annual Shareholders’ Meeting received a stock award of 2,4691,676 Shares ($175,000 divided by $70.87,$104.42, the closing price of a Share on the NYSE on the grant date, and rounded to the nearest Share). Mr. Penner received a stock award of 3,8802,753 Shares ($275,000287,500 divided by $70.87,$104.42, rounded to the nearest Share). Dr. Cash,In addition, upon his appointment to the Board on February 7, 2019, Mr. Conde received a prorated portion of the annual stock grant for the term ending at the 2019 Annual Shareholders’ Meeting. This grant consisted of 550 Shares (a prorated value of $53,219 divided by $96.73, the closing price of a Share on the NYSE on the grant date, and rounded to the nearest Share). Mr. Flynn, Ms. Friar, Ms. Mayer, Mr. Penner, Mr. Rob Walton, and Mr. Steuart Walton and Ms. Wolf elected to defer these Shares in the form of deferred stock units. Ms. Alvarez, Mr. Corbett, Mr. Duke, and Mr. Jim Walton did not stand for reelection at the 2016 Annual Shareholders’ Meeting and, therefore, did not receive a stock grant during fiscal 2017.
Table of Contents Corporate Governance Option Awards and Non-Equity Incentive Plan Compensation (columns (d) and (e))
We do not issue stock options to our Outside Directors and do not provide our Outside Directors with any non-equity incentive plan compensation. Therefore, we have omitted these columns from the table.
Change in Pension Value and Non-Qualified Deferred Compensation Earnings (column (f))
While directors are permitted to defer cash retainers into an interest-credited account under the Director Compensation Deferral Plan, none of our current directors have elected to do so and do not have any balances in any such account. Therefore, we have omitted this column from the table.
42Walmart | 2017 Proxy Statement•Corporate Governance
All Other Compensation (column (g))
The amounts in this column include tax gross-up payments paid during fiscal 20172020 relating to imputed income attributable to spousal travel expenses, meals, and related activities in connection with certain Board meetings during fiscal 2017. For the directors listed below, this column also includes the aggregate cost of spousal travel expenses, meals, and related activities in the following amounts:
| Director | | Amount | | Aida M. Alvarez | | $ | 13,222 | | James I. Cash, Jr. | | $ | 14,375 | | Roger C. Corbett | | $ | 19,997 | | Timothy P. Flynn | | $ | 22,283 | | Linda S. Wolf | | $ | 14,445 |
2020. The cost of anythe underlying spousal travel expenses, meals, and related activities for each of the other directors is omitted from this column because the total incremental cost for such benefits for each other director was less than $10,000. Corporate Governance•Walmart | 2017 Proxy Statement43
| 40 | | www.walmart.com |
Table of ContentsProposal No. 2 Advisory Vote to Approve Frequency of Future Say-on-Pay Votes
This proposal gives our shareholders the opportunity to cast an advisory, non-binding vote, in accordance with Section 14A of the Exchange Act, on how often we should include advisory say-on-pay votes (that is, votes similar to Proposal 3 in this proxy statement) in our proxy materials for our future annual shareholders’ meetings or any special shareholders’ meeting for which we must include NEO compensation information in the proxy materials. Shareholders may vote their preference to have future advisory say-on-pay votes once every year, once every two years, or once every three years. If you have no preference, you may choose to abstain from voting on this proposal.
Why the Board recommends that shareholders select a frequency of 1 year | Our shareholders last voted on the frequency of holding a say-on-pay vote in 2011, and Walmart has held an annual advisory say-on-pay vote since then. The Board continues to believe that holding an annual advisory say-on-pay vote is the most appropriate option for our company because it will allow our shareholders to provide us with their input on our compensation philosophy, policies and practices as disclosed in the Proxy Statement on a timely basis. The Board therefore recommends shareholders vote “1 Year” for this Proposal No. 2. |
In voting on this Proposal No. 2, shareholders may cast their advisory vote to conduct future advisory say-on-pay votes every “1 Year,” “2 Years,”“3 Years,” or “Abstain.” As an advisory vote, this Proposal No. 2 is not binding on Walmart or the Board. However, the Board and the CMDC value the opinions expressed by our shareholders and will take into account the outcome of this vote when considering the frequency of future advisory say-on-pay votes.
1 YEAR | The Board recommends that shareholders vote to hold future advisory say-on-pay votes every1 YEAR. |
44Walmart | 2017 Proxy Statement•Proposal No. 2: Advisory Vote to Approve Frequency of Future Say-on-Pay Votes
Proposal No. 3PROPOSAL NO. 2
Advisory Vote to Approve Named Executive Officer Compensation We are asking our shareholders to approve, on a non-binding advisory basis, in accordance with Section 14A of the Exchange Act, the compensation of our NEOs as disclosed in this proxy statement. We have held a similar shareholder vote every year since 2011 and expect to hold a similar vote at the 2018 Annual Shareholders’ Meeting.
As described in the CD&A, our executive compensation program is designed with an emphasis on performance and is intended to closely align the interests of our NEOs with the interests of our shareholders. The CMDC regularly reviews our executive compensation program to ensure that compensation is closely tied to aspects of our company’s performance that our Executive Officers can impact and that are likely to have an impact on shareholder value.
Our compensation programs are also designed to balance long-term performance with shorter-term performance and to mitigate any risk that an Executive Officer would be incentivized to pursue good results with respect to a single performance measure, company segment, or area of responsibility to the detriment of our company as a whole.
In the CD&A, we discuss why we believe the compensation of our NEOs for fiscal 2017 was appropriately aligned with our company’s performance in fiscal 2017. The CD&A also describes feedback we received regarding our executive compensation program during our shareholder outreach efforts, and we attempted to provide more clarity and transparency regarding the rationale for and philosophy behind our executive compensation program and practices. We urge you to read carefully the CD&A, the compensation tables, and the related narrative discussion in this proxy statement when deciding how to vote on this proposal.
The vote on this proposal is advisory, which means that the vote will not be binding on Walmart, the Board, or the CMDC. However, the Board and CMDC value our shareholders’ opinions, and the CMDC will consider the results of the vote on this proposal when making future decisions regarding executive compensation and when establishing our NEOs’ compensation opportunities.
In view of the foregoing, shareholders will vote on the following resolution at the 2017 Annual Shareholders’ Meeting:
RESOLVED, that the company’s shareholders hereby approve, on an advisory basis, the compensation of the Named Executive Officers of Walmart as disclosed in Walmart’s proxy statement for the 2017 Annual Shareholders’ Meeting in accordance with the Securities and Exchange Commission’s compensation disclosure rules.
| What am I voting on? |  | | | | | | | We are asking our shareholders to approve, on a non-binding, advisory basis, under Section 14A of the Exchange Act, the compensation of our NEOs as disclosed in this proxy statement. We have held a similar shareholder vote every year since 2011 and expect to hold a similar vote at the 2021 Annual Shareholders’ Meeting. As described in the CD&A, our executive compensation program is designed with an emphasis on performance and is intended to closely align the interests of our NEOs with the interests of our shareholders. The CMDC regularly reviews our executive compensation program to ensure that compensation is closely tied to aspects of our company’s performance that our Executive Officers can impact and that are likely to have an impact on shareholder value. Our compensation program is also designed to balance long-term performance with shorter-term performance and to mitigate any risk that an Executive Officer would be incentivized to pursue good results with respect to a single performance measure, company segment, or area of responsibility to the detriment of our company as a whole. In the CD&A, we discuss why we believe the compensation of our NEOs for fiscal 2020 was appropriately aligned with our company’s performance during fiscal 2020. The CD&A also describes feedback we received regarding our executive compensation program during our shareholder outreach efforts, and is intended to provide additional clarity and transparency regarding the rationale for and philosophy behind our executive compensation program and practices. We urge you to read carefully the CD&A, the compensation tables, and the related narrative discussion in this proxy statement when deciding how to vote on this proposal. The vote on this proposal is advisory, which means that the vote will not be binding on Walmart, the Board, or the CMDC. However, the Board and CMDC value our shareholders’ opinions, and the CMDC will consider the results of the vote on this proposal when making future decisions regarding executive compensation and when establishing our NEOs’ compensation opportunities. In view of the foregoing, shareholders will vote on the following resolution at the 2020 Annual Shareholders’ Meeting: RESOLVED, that the company’s shareholders hereby approve, on an advisory basis, the compensation of the Named Executive Officers of Walmart as disclosed in Walmart’s proxy statement for the 2020 Annual Shareholders’ Meeting in accordance with the SEC’s compensation disclosure rules. | | | FOR | | | | The Board recommends that shareholders voteFORthis proposal. |
Proposal No. 3: Advisory Vote to Approve Named Executive Officer Compensation•Walmart | 2017 Proxy Statement45
Table of Contents 
Executive Compensation Compensation Discussion and Analysis
| Compensation Discussion and Analysis |
In this section, we describe our executive compensation philosophy and program that support our strategic objectives and serve the long-term interests of our shareholders. We also discuss how our CEO, CFO, and other Named Executive Officers (our NEOs) were compensated in fiscal 20172020 and describe how their compensation fits within our executive compensation philosophy. For fiscal 2017,2020, our NEOs were:  | |  | |  | |  | |  | |  | C. Douglas McMillon
President and Chief Executive Officer | | M. Brett Biggs
Executive Vice President and Chief Financial Officer | | Gregory S. ForanSuresh Kumar
Global Chief Technology Officer and Chief Development Officer | | Judith McKenna
Executive Vice President, President and CEO, Walmart International | | Kathryn McLay
Executive Vice President, President and CEO, Sam’s Club | | John R. Furner
Executive Vice President, President and CEO, Walmart U.S. |
Disclosure regarding Mr. Furner’s fiscal 2020 compensation is not required under SEC rules. Nevertheless, we have voluntarily included his compensation information in this proxy statement on the same basis as our other NEOs. We included this disclosure because we believe it is helpful to provide shareholders with information about how our compensation plans are designed to incentivize and support each of our operating segments. Table of Contents This CD&A is organized as follows:  | | 2020 Compensation OverviewProvides an overview of our executive compensation philosophy, framework, and practices, and how our pay program emphasizes performance and is aligned with the interests of our shareholders. | | David Cheesewright43 | | Marc Lore | | | | | | |  | | NEO Compensation Components and Pay Mix Describes the primary components of our NEO compensation packages and how our NEO compensation is heavily weighted towards performance-based components that are aligned with our shareholders’ interests. | | President and Chief | | Executive Vice | | Executive Vice | | Executive Vice | | Executive Vice | Executive Officer | | President and Chief | | President, President | | President, President | | President, President | | | Financial Officer | | and CEO, Walmart U.S. | | and CEO, Walmart | | and CEO, U.S.45 | | | | | | | | International | | eCommerce |
46Walmart | 2017 Proxy Statement•Executive Compensation
 
Table ofContents
Compensation Discussion & Analysis
This CD&A is organized as follows:
| | 1 | Executive Summaryprovides an overview of our strategy, our executive compensation philosophy, framework, and practices, how our pay is aligned with performance, and the feedback we have received from our shareholders. | 48 | | | | | | | | | | 2 | Components of NEO Compensation and Pay Mixexplains the primary components of our NEO compensation packages and how our NEO compensation is heavily weighted towards performance-based compensation. | 52 | | | | | | | | | | 3 | Executive Compensation Process and Governancedescribes the roles of the CMDC, the CMDC’s independent compensation consultant, and others in setting NEO compensation, how the CMDC uses peer group data, and governance and oversight over our executive compensation program. | 53 | | | | | | | | | | 4 | Incentive Goal Setting Philosophy and Processprovides insight into how the CMDC sets performance goals aligned with our strategy and operating plan. | 57 | | | | | | | | | | 5 | Fiscal 2017 Performance Metricsdescribes the performance metrics used in our annual and long-term incentive programs and why the CMDC selected those metrics. | 59 | | | | | | | | | | 6 | Fiscal 2017 Performance Goals and Performancedescribes the specific goals under our incentive programs for fiscal 2017, how we performed compared to those goals, and the resulting NEO incentive payouts. | 61 | | | | | | | | | | 7 | Fiscal 2017 NEO Pay and Performance Summariesdescribes how we link pay and performance to determine NEO compensation; each NEO’s summary includes their individual accomplishments for fiscal 2017 and how those accomplishments were considered by the CMDC when making compensation decisions. | 65 | | | | | | | | | | 8 | Other Compensation Programs and Policiesdescribes limited perquisites and other items not included in Total Direct Compensation (TDC); this section also describes our practices regarding employment agreements, clawbacks, stock ownership guidelines, tax considerations, and other matters. | 70 | |
Executive Compensation•Walmart | 2017 Proxy Statement 47
Fiscal 2017 Highlights
Our Strategy
Fiscal 2017 marked the continuation of a transformational period of investment for Walmart, as we continued to implement our strategy to become the first company to deliver a seamless shopping experience at scale. Regardless of how our customers choose to shop with us – in stores, online, on a mobile device, or in any combination of these – we aim to deliver a fastCompensation Governance and ProcessExplains who sets executive compensation at Walmart, the process for setting executive compensation, and convenient shopping experience. During the year, we continued to articulate four key areas of focus to drive continued success:
Make every day | | Change how | | Deliver results | | Be the most | easier for busy | | we work | | peer benchmarking, shareholder feedback, and operate with | | trusted retailer | families | | | | discipline | | |
Our Performance
During fiscal 2017, we continued to deliver on our key strategic priorities in a challenging and highly competitive global environment. Key financial and strategic highlights included:
EPS of $4.38andadjusted EPS of $4.32, exceeding our initial full-year guidanceother information are considered when making compensation decisions. | $485.9 billiontotal revenue, an increase of 0.8%, and$496.9 billionon a constant currency basis, an increase of 3.1% | $22.8 billion46consolidated operating income, a decrease of 5.6%. On a constant currency basis, operating income was$23.4 billion, a decrease of 2.9% | | | | | | |  | | Fiscal 2020 Performance MetricsDescribes the performance metrics used in our incentive programs and why the CMDC selected these metrics. | | 50 |
 | | Incentive Goal Setting Philosophy and ProcessProvides insight into how the CMDC sets performance goals that are aligned with our strategy and our operating plan. | | 52 | | | | | | 9 straight quarters of comparable store traffic growth | | Fiscal 2020 Performance Goals and Performancein Walmart U.S.,Describes the specific goals under our incentive programs for fiscal 2020, how we performed compared to those goals, and continued improvement in customer experience scoreshow those results impact performance-based compensation. | $31.5 billion | in operating cash flow – an all-time record for our company54 | | | | | |  | | Fiscal 2020 NEO Pay and Performance SummariesDescribes how we link pay and performance to determine each NEO’s compensation. | $14.5 billion | was returned58 | | | | | |  | | Other Compensation Programs and PoliciesDescribes the limited perquisites available to shareholders through dividendsour NEOs, as well as our practices regarding employment contracts, clawbacks, stock ownership guidelines, insider trading policy, tax considerations, and share repurchases; announced dividend increase for theother matters. | | 44th64 |
consecutive year42 | | www.walmart.com |
Table of Contents Executive Compensation  | | 2020 Compensation Overview |
For more information regarding our fiscal 2017 financial performance, see our Annual Report on Form 10-K for fiscal 2017 filed with the SEC on March 31, 2017. Certain financial measures discussed above are non-GAAP measures under the SEC’s rules. See Annex A for more information about how we calculate these financial measures and, where required, reconciliations to the most directly comparable financial measures calculated in accordance with GAAP.
48 Walmart | 2017 Proxy Statement•CD&A | 1: Executive Summary
Our Executive Compensation Philosophy and Framework Our executive compensation programs are intended to motivate and retain key executives, with the ultimate goal of generating strong operating results and delivering solid returns tocreating alignment with our shareholders. We have developed our compensation programs to support our enterprise strategy and to align our leadership team with our culture, strategy, and structure. Our executive compensation program is built upon our global compensation framework: ✓Pay for performanceby tying a majority of executive compensation to pre-established, quantifiable performance goals. ✓Use performance metrics that areunderstandable, that aretied to key retail performance indicators, and that our executives have theability to impact. | | Establish performance goals that are
aligned with our✓enterprise strategyProvidecompetitive payto attract and financial plansretain highly-qualified talent at all levels..✓Align management interests with the long-term interests of ourshareholdersby providing long-term incentives in the form of equity.Provideequity, combined with robust stock ownership guidelines.
competitive pay✓Establish performance goals that arealigned with our strategy and financial and operating plans.
✓Encourageleadership accountabilityby tying a higher percentage of compensation to performance at higher levels of seniority. |
How Our Executive Compensation Aligns with Our
Strategic Transformation Walmart is the largest global retailer serving customers through approximately 11,500 stores under 56 banners in 27 countries and eCommerce websites. Our size, global presence, and industry attract intense competition from both traditional brick-and-mortar and eCommerce retailers. These competitors have created substantial price and market share disruptions. Our transformational omni-channel strategy leverages Walmart’s unique assets including physical stores, supply chain, and rapidly growing eCommerce capabilities to serve customers in all the ways they want to shop while providing solid returns to shareholders. This multi-year strategy has required and continues to require substantial capital investment in our stores, our associates, eCommerce, and other growth opportunities. These investments are generating positive results as our fiscal 2020 performance was strong. We have designed our executive compensation program—metrics, goals, structure, mix, etc.—to be aligned with this strategy while also being highly motivational for our leadership team. Here are some specifics: Our performance metrics are aligned with our ongoing transformation | ● | Our ongoing strategic investments in our people, our stores, lower prices, eCommerce, and retain highly-qualified executives.technology are resulting in lower associate turnover and a better shopping experience for our customers. Delivering solid results in the near term allows us to fund the investments necessary to continue to transform our business, drive sustainable long-term growth, and deliver on our commitments to our stakeholders. For this reason, our incentive plans emphasize key indicators of retail success that can be impacted by our executives (i.e., sales, operating income, and ROI). | | ● | Our long-term incentive design, which uses one-year performance metrics followed by an additional two-year vesting period, is the best approach in the context of a rapidly changing retail environment and a strategy that may need to evolve over time. | | ● | Our emphasis on strong, efficient growth supports including a sales metric in both our annual and long-term incentive plans, both of which include a return- or profit-based metric as well. |
Our performance goals are aligned with our ongoing transformation | ● | Our significant multi-year investments in people, stores, lower prices, eCommerce, technology, and growth opportunities have negatively impacted operating income in the short- to medium-term. This impact has been reflected in our financial guidance, and our incentive plan performance goals have consistently been aligned with that guidance. | | ● | For fiscal 2020, our incentive goals reflected our current investment cycle and continued emphasis on strong, efficient growth. |
Table of Contents Executive Compensation Our pay mix is aligned with our ongoing transformation | ● | The ultimate success of our strategic transformation will be measured in our ability to deliver solid returns to our shareholders over the long term. For that reason, our NEO pay mix is heavily weighted toward equity with a three-year vesting period. Beginning in fiscal 2018, we began shifting a larger percentage of total direct compensation (“TDC”) toward performance equity. | | ● | Our robust stock ownership guidelines for executive officers further support alignment between our leadership and our independent shareholders. |
Our Executive
Compensation Program
Emphasizes Performance As shown in the charts below, a substantial majority of our NEOs’ fiscal 2020 target TDC was performance-based.* | CEO | | |  |
| Other NEOs Combined | | |  |
Our Executive Compensation
Practices are Aligned with
Shareholders’ Interests What we doPerformance-Based Framework | | ●73%-75% of NEO TDC is performance-based and a majority is in the form of equity ●No employment contracts with our NEOs ●No change-in-control benefits ●No executive pension or similar retirement plans in the U.S. ●No excessive perquisites |  | Directly | ●Direct link between pay and performance | | Mitigate risk by using a variety of as fiscal 2020 incentive payments are aligned with our performance measures | | ●CMDC’s independent compensation consultant evaluates rigor of performance goals and has consistently found target goals to be challenging ●CMDC annually reviews a realizable pay-for-performance analysis by its independent compensation consultant and has determined that CEO pay is appropriately aligned with performance ●Significant percentage of TDC in the form of equity, which aligns the interests of our executives with those of our shareholders | | | ●Maintain robust stock ownership guidelines ●No hedging or short sales of Walmart stock permitted ●No unapproved pledging of Walmart stock as collateral ●No recycling of Shares used for taxes or option exercises ●No dividends or equivalents paid on unvested performance-based restricted stock units | | Shareholder Accountability | | ●Conduct extensive shareholder outreach on executive compensation ●Hold annual shareholder say-on-pay vote ●Mitigate risk by using a variety of financial performance measures ●Subject annual and long-term incentives to recoupment and forfeiture provisions | | Maintain robust stock ownership guidelines | | CMDC’s independent compensation consultant has consistently determined that CEO realizable pay is aligned with performance | | Conduct extensive shareholder outreach on executive compensation | | Hold annual shareholder “say on pay” vote |
* May not total 100% due to rounding. What we do NOT do44 |  | No employment contracts | | No change-in-control benefits | | No pension or similar retirement plans in the U.S. | | No hedging or short sales of Walmart stock permitted | | No recycling of shares used for taxes or option exercises | | No dividends or equivalents paid on unvested performance share units | | No unapproved pledging of Walmart stock | | No excessive perquisites www.walmart.com |
CD&A | 1: Executive Summary•Walmart | 2017 Proxy Statement 49Table of Contents
Executive Compensation  | | NEO Compensation Components and Pay Mix |
Our Executive Compensation Program Emphasizes Performance
What are the primary components of our fiscal 2020 NEO compensation? Our executives’ total direct compensation, or TDC, is heavily weighted towards performance and appropriately balances executive focus on our short- and longer-term priorities with annual and long-term rewards: Fiscal 2017 Total Direct Compensation
 CASH EQUITY Base Salary • Smallest component of target TDC CEO: about 6% NEOs: about 10%–15% Annual Incentive • CEO: about 20% of target TDC NEOs: about 24%–31% of target TDC • Based on operating income and salesrelated metrics, as well as compliance and diversity goals • Pays out between 0% and 125% of target (37.5% if threshold goals met) Restricted Stock • CEO: about 19% of targeted TDC NEOs: about 14%–16% of targeted TDC • 3-year vesting period Performance Share Units • Largest component of target TDC CEO: about 56% NEOs: about 41%–49% • Based on ROI and sales performance over a 3-year period with goals set annually • Pays out between 0% and 150% of target (50% if both threshold goals met) Fiscal 2017 Total Direct Compensation Performance Based
CEO Pay is Aligned with Performance
CEO Realized Pay
Total Shareholder Return (TSR) CEO Realized Pay 0 5 10 15 20 $19.68 M 0 20 40 60 80 100 120 Jan. 31, 2014 FY15 FY16 FY17 $17.16 M $116.63 $93.60 $100 $96.88 $13.14 M
| | (1) | Realized pay includes base salary, annual incentive earned for the fiscal year shown, restricted stock vested in the fiscal year shown, and performance-based equity with a performance period ending during the fiscal year shown. Equity awards are valued using the closing price of Walmart common stock on the vesting date. | | | (2) | TSR illustrates the total shareholder return on Walmart common stock during the three fiscal years ending January 31, 2017, assuming $100 was invested on the first day of fiscal 2015 and assuming reinvestment of all dividends. |
50 Walmart | 2017 Proxy Statement•CD&A | 1: Executive Summary
Our Shareholder Engagement on Executive Compensation
Our Board actively seeks and values feedback from shareholders. Over the past several years, in addition to our day-to-day interactions with investors, we have expanded our shareholder engagement to include an annual outreach program focused on strategy, governance, executive compensation, and other topics suggested by our shareholders. Since our 2016 Annual Shareholders’ Meeting, we invited our 60 largest institutional shareholders, representing over 600 million Shares, to participate in this outreach program, and we ultimately engaged with more than 30 shareholders representing approximately 470 million Shares. We also had conversations with leading proxy advisory firms.
This engagement gave us an opportunity to discuss our strategy, our commitment to corporate governance and executive compensation practices, and how our governance and compensation practices help to support our strategy. While our shareholders expressed a wide range of perspectives in these meetings, we received generally positive feedback on our strategy to become the first company to deliver a seamless shopping experience at scale; our recent changes to our Board and committee structure to support that strategy; our executive compensation program; and recent enhancements to our proxy statement disclosures. This feedback was consistent with the results of our 2016 say-on-pay proposal, which received 84.8% support. The feedback we receive from our shareholders is regularly communicated to the CMDC, the NGC, and the Board, and helped inform the changes to our executive compensation program for fiscal 2018 described below.
Executive Compensation Program Changes for Fiscal 2018
During fiscal 2017, the CMDC oversaw a comprehensive review of our overall compensation and performance management programs to ensure that our programs continue to be aligned with our strategy as we transform our business to deliver a seamless shopping experience at scale. As a result of this review, the CMDC approved changes to our programs with the goals ofincreasing differentiation for high performance, balancinglong-term and short-termincentives, andsimplifying our long-term incentive plan. Key changes, which will take effect beginning in fiscal 2018, include the following:
What we changed | | | Why we made this change | | Introduced greater differentiation to annual salary adjustments |  | Allows us to reward high performers and emphasize the link between pay and performance | Reduced annual cash incentive opportunities by 25%; reallocated to long-term performance-based restricted stock units | | Appropriately balances short-term and long-term goals and increases focus on long-term results | Replaced performance share units – which vested based on average performance over three separate performance periods – with performance equity, which have a one-year performance period followed by an additional two-year vesting period | | Promotes simplicity and understandability of performance goals, while retaining long-term focus and shareholder alignment of program over a three-year period |
CD&A | 1: Executive Summary•Walmart | 2017 Proxy Statement 51
2 | Components of NEO Compensation and Pay Mix |
What are the primary components of our fiscal 2017 NEO compensation packages?
rewards. There are three components of our executives’ fiscal 20172020 TDC: base salary, annual cash incentive, and long-term equity: Component | | Description/Objective | | Performance Metrics | | | Form and Timing of Payout | Base Salary | | Fixed base of cash compensation commensurate with job responsibilities and experience | | NoneSubject to annual adjustment based on individual performance | | | Paid in cash bi-weekly unless voluntarily deferred | Annual Cash Incentive | | Variable pay intended to focus leaders and incentivize performance against key operational metrics, depending on position Goals are set at the beginning of the fiscal year and aligned with operating plan and public guidance | | ●Sales ●Operating Income | | | Sales
Operating Income
Also tied to ethics/compliance and diversity/inclusion goals
| | Paid in cash after the end of the fiscal year unless voluntarily deferred | Long-Term Equity Performance Share Units (PSUs) (75%)
Equity | | Variable pay intended to focus leaders and incentivize performance against metrics aligned with our long-term strategic goals | | ●ROI ●Sales ●Stock performance | | | ROIPaid in Shares; one year performance period followed by an additional two year vesting period
| Retention Stock | | SalesIntended to align executives’ long-term interests with our shareholders’ interests and promote retention
| | Value realized also depends on long-term stock price performance | | | Paid in Shares after the end of a three-year vesting period unless voluntarily deferred; payout based |
How our incentive metrics and goals support our strategy Strong financial performance is what allows us to invest in our ongoing strategic transformation. Therefore, the CMDC seeks to drive strong performance with respect to traditional measures of success in the retail industry. Our incentive metrics of sales, operating income, and ROI are traditional measures of retail success and are commonly used by retailers in their incentive plans. Moreover, they are broadly correlated with share price in the retail industry and aligned with our historical stock performance. For more information, see “What financial performance metrics are used in our incentive programs, and why did the CMDC select these metrics?” on average performance over three annual performance cyclespage 50 below. |
Restricted Stock (25%)2020 Proxy Statement 45
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Table of Contents Executive Compensation 
 | | Intended to align executives’ long- term interests with our shareholders’ interests and promote retention | | Value realized depends on stock performance | | Three year cliff vesting
Section 162(m) “covered employees” must generally defer until after separation from service
|
How much of our NEOs’ TDC is performance-based?
As shown in the charts below, a substantial majority of our NEOs’ fiscal 2017 TDC was performance-based. The percentages may not total 100.0% due to rounding.
Performance Based 75.3% CEO 18.55% Restricted Stock 55.66% Performance Share Units (PSU) 47.08% Performance Share Units (PSU) 6.14% Base Salary 19.65% Annual Cash Incentive 15.69% Restricted Stock 11.23% Base Salary 25.99% Annual Cash Incentive Performance Based 73.1% Other NEOs Combined
52Walmart | 2017 Proxy Statement•CD&A | 2: Components of NEO Compensation and Pay Mix
3 | Executive Compensation ProcessGovernance and GovernanceProcess |
At Walmart, we are committed to the highest standards of compensation governance. We design and administer our executive compensation program to motivate, retain, and focus key executives to drive our strategy, generate strong operating results, and deliver solid returns to our shareholders. Our compensation programs are also intended to align the interests of our leadership team with our shareholders and to promote our pay-for-performance culture and philosophy. Who sets executive compensation at Walmart? The CMDC, which consists of fourthree independent directors, is responsible for establishing and approving executive compensation offor all officers subject to Section 16,Executive Officers, including the CEO and other NEOs, and for developing and overseeing our executive compensation program (see page 2625 for more information about the CMDC). The CMDC considers a variety of factors in setting TDC forFor our NEOs, including:
CEO.o the overall financial and operating performance of our company and its operating segments and/or areas of responsibility, as applicable; o each NEO’s individual performance and contributions to the achievement of financial goals and operational milestones;
o each NEO’s job responsibilities, expertise, historical compensation, and years and level of experience;
o our overall succession planning and the importance of retaining each NEO and each NEO’s potential to assume greater responsibilities in the future; and
o peer group data and analyses (see pages 53-56 for more details).
What is the role of the CEO in setting executive compensation?
Our CEO has no role in determining his own compensation, which is set by the CMDC in consultation with theour Chairman and with input from the CMDC’s independent compensation consultant and Walmart’s Global People division. Division. For our other Section 16 officers,Executive Officers, including our other NEOs, theNEOs.Our CEO makes recommendations to the CMDC regarding their compensation. He bases these recommendations on, amongthe compensation of our NEOs and other factors, each executive’s individual performance, the performance of each executive’s business unit or function, peer benchmarking information, and retention and incentive considerations.Executive Officers. The CMDC reviews these recommendations and may set a particular NEO’ssets individual NEO TDC at a different amountvalues and awards as it deems appropriate. What isRole of the role of compensation consultants with respect to executive compensation?
CMDC’s Independent Compensation Consultant Since early 2010, the CMDC has engaged Pay Governance LLC (“Pay Governance”) as its independent executive compensation consultant. Under the terms of its engagement, Pay Governance reports directly and exclusively to the CMDC; the CMDC has sole authority to retain, terminate, and approve the fees of Pay Governance; and Pay Governance may not be engaged to provide any other services to Walmart without the approval of the CMDC. Other than its engagement by the CMDC, Pay Governance does not perform and has never performed any other services for Walmart. The CMDC’s independent consultant attends and participates in CMDC meetings at which executive compensation matters are considered, and performs various analyses for the CMDC, including peer group benchmarking, realizable pay analyses, analyses regarding the alignment of pay and performance, analyses of the correlation between performance measures and shareholder return, and assessments of the difficulty of attaining performance goals. including: | ● | peer group benchmarking; | | ● | realizable pay analyses; | | ● | analyses regarding the alignment of pay and performance; | | ● | analyses of the correlation between incentive plan performance measures and total shareholder return; and | | ● | assessments of the difficulty of attaining performance goals. |
The CMDC annually reviews the independence of Pay Governance in light of SEC rules and NYSE Listed Company Rules regarding compensation consultant independence and has affirmatively concluded that Pay Governance is independent from Walmart and has no conflicts of interest relating to its engagement by the CMDC. The CMDC also reviews the performance of Pay Governance. | 46 | | www.walmart.com |
Table of Contents Executive Compensation What is the compensation setting process? This chart summarizes the process and analyses the CMDC considers when setting executive compensation and validating our pay targets. The CMDC’s independent compensation consultant, Pay Governance, performs various pay-for-performance analyses for the CMDC. | | | | | Data Source/
Responsibility | | Purpose | | How it’s Used |  | | SEP–JAN
Review of Annual and Long-term Business Plans | | ●Board ●SPFC ●CMDC ●Management | | Establish performance metrics aligned with annual operating plan and long-term objectives | | To review choice of incentive metrics and ensure they support our long-term strategic transformation and drive results tied to shareholder value | |
|
| | | NOV
Pay for Performance Alignment | | ●Independent compensation consultant ●Publicly available compensation information | | Evaluate pay-for-performance alignment of CEO compensation with performance relative to peers | | To assess the reasonableness of CEO pay, Pay Governance conducts: ●Realizable pay analyses; ●Analyses regarding the alignment of CEO pay and performance; ●Analyses of the correlation between performance measures and shareholder return; and ●Assessments of the difficulty of attaining performance goals | |
| | | | JAN
Peer Group Benchmarking | | ●Independent compensation consultant (for CEO) ●Publicly available compensation information for peer group | | Setting pay and establishing Target TDC opportunity | | Benchmarking data is used as a general guide to setting appropriately competitive compensation consistent with our emphasis on performance-based compensation To set our NEOs’ target TDC at competitive levels relative to our peer groups | |
|
|  | | Individual Performance Assessments | | ●Board ●CMDC ●CEO (for other NEOs) ●Global People Division | | Evaluate individual performance for purposes of pay decisions | | To determine merit increases (if any) and adjust individual award opportunities for the next award cycle | |
|
| | | Tally Sheets | | ●Global People Division | | Evaluating total compensation and internal pay equity | | Tally sheets: ●Summarize the total value of the compensation realizable by each NEO for the upcoming fiscal year; ●Quantify the value of each element of that compensation, including perquisites and other benefits; and ●Quantify the amounts that would be owed to each NEO upon retirement or separation from our company | |
| | | | FEB–MAR
Company Achievement of Prior Year Performance Goals and Setting of Current Year Incentive Goals | | ●Independent compensation consultant (for goal difficulty) ●CMDC ●Management | | Assess current year company performance against financial and operating metrics | | To determine award payments for the recently completed fiscal year and set target levels for following year To assess the ease or difficulty of attaining performance goals and whether adjustments need to be made to incentive metrics for the following award cycle To establish incentive goals for current year that support our strategic transformation and are aligned with operating plan and financial guidance | |
|
| | | ONGOING
Shareholder Outreach | | ●Board ●Management | | Obtain investor feedback on our executive compensation program | | To understand investor expectations and monitor trends in executive compensation; used to evaluate compensation policies, practices, and plans ●Shareholder feedback helps inform our executive compensation program design | |
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Table of Contents Executive Compensation What factors are considered in setting Total Direct Compensation for our NEOs? The CMDC considers a variety of factors in setting Total Direct Compensation for our NEOs, including: | ● | the overall financial and operating performance of our company and its operating segments and/or areas of responsibility; | | ● | each NEO’s individual performance and contributions to the achievement of financial goals and operational milestones; | | ● | the performance of each executive’s business unit or function against pre-determined financial objectives; | | ● | each NEO’s job responsibilities, expertise, historical compensation, and years and level of experience; | | ● | our overall succession planning and the importance of retaining each NEO and each NEO’s potential to assume greater responsibilities in the future; and | | ● | peer group benchmarking data and compensation analyses. |
How is peer group data used by the CMDC? The CMDC reviews publicly available compensation information for three separatefrom peer groupscompanies when establishing TDC for our executives. Walmart is significantly larger than mostIn early fiscal 2019, with the assistance of ourPay Governance, the CMDC developed a new, simpler and more focused peer group to replace the three peer groups used in the past. This new peer group aims to reflect a cross-industry sample of the largest U.S.-based companies, including large retailers and companies with significant and complex international operations. These peer group companies and aswere selected using the world’s largest retailer, we believe that Walmart’s size, extensive international presence, and complex operations result in our NEOs’ jobs having a greater level of complexity than similar jobs at many of our peer group companies. For this reason, the CMDC seeks to set our NEOs’ target TDC at competitive levels relative to our peer groups; however, peer group compensation information is only one factor in the CMDC’s decision-making process. The CMDC’s independent compensation consultant has done a statistical analysis of our NEOs’ target TDC and found that, on a size-adjusted basis, our NEOs’ target TDC are near the median of comparable positions within our peer groups. See pages 65-69 for more information regarding how our NEOs’ TDC compares with our peer groups.following multi-step screening process: CD&A | 3: ExecutiveCEO Compensation Process and GovernancePeer Group Screening Methodology•Walmart | 2017 Proxy Statement53
| Geography Screen
U.S.-headquartered companies |  | |
| | Ownership Screen Publicly traded  Excluded private companies |
| | Scope & Industry Screen Revenue:>$75B, or
Market Cap:>$75B(with revenues>$50B), or
Retailer:>$50Brevenues
Founder Screen
Excluded companies whose current CEO is the founder | |
| | | | 42Peer Companies Applying this methodology, our new peer group consisted of the following 42 companies when setting fiscal 2020 compensation in January 2019: |
Retail Industry Survey.This peer group allows the CMDC to compare our NEO compensation to that of our primary competitors in the retail industry. For fiscal 2017, the Retail Industry Survey included all publicly-traded retail companies with significant U.S. operations with annual revenues exceeding approximately $10 billion:
(in billions) $482.1 $211.7 $20.4 $14.2 FY16 Revenue FYE Market Cap Walmart Peer Group Median
Amazon.com, Inc.AmerisourceBergen | Lowe’s Companies, Inc. | AutoNation, Inc. | Macy’s, Inc. | Bed Bath & Beyond Inc. | Nordstrom, Inc. | Best Buy Co., Inc. | Office Depot, Inc. | CarMax, Inc. | Penske Automotive Group, Inc. | | Costco Wholesale Corporation | Rite Aid Corporation | CVS Health Corporation | Ross Stores, Inc. | Dollar General Corporation | Sears Holdings Corporation | eBay Inc. | The Sherwin-Williams Company | Dollar Tree, Inc. | Staples, Inc. | The Gap, Inc. | SUPERVALU INC. | The Home Depot, Inc.Johnson & Johnson | Target Corporation | J. C. Penney Company,Corporation | CVS Health Corporation | JPMorgan Chase & Co. | UnitedHealth Group | | Anthem, Inc. | The TJX Companies,DowDuPont Inc. | Kohl’s Corporation | Walgreen Boots Alliance, Inc. | | The Kroger Co. | Whole Foods Market, Inc.Incorporated | L Brands,Apple Inc. | |
Select Fortune 100.This group of peer companies was chosen from among the Fortune 100 by our Global People division, with input from the CMDC’s independent compensation consultant. The Select Fortune 100 includes companies whose primary business is not retailing but that are similar to us in one or more ways, such as global operations or complexity of business model or operations. We excluded retailers from this group because those companies were already represented in the Retail Industry Survey. We also excluded companies with business models that are broadly divergent from ours, such as financial institutions and energy companies. For fiscal 2017 those companies were:
(in billions) $482.1 $211.7 $55.4 $124.4 FY16 Revenue FYE Market Cap Walmart Peer Group Median
Archer-Daniels-Midland CompanyExpress Scripts Holding Co. | Johnson & JohnsonLockheed Martin Corporation | United Technologies | | AT&T Inc. | Johnson Controls,Exxon Mobil Corporation | Lowe’s Companies, Inc. | Caterpillar Inc. | McKesson Corporation | Cisco Systems, Inc. | MicrosoftBank of America Corporation | The Coca-Cola Company | Mondelez International, Inc. | FedEx Corporation | PepsiCo, Inc. | | Ford Motor Company | Pfizer Inc. | General Electric Company | The Procter & Gamble Company | HP Inc. | Twenty-First Century Fox, Inc. | Honeywell International Inc. | Tyson Foods, Inc. | Ingram Micro Inc.McKesson Corporation | United Parcel Service, Inc. | IntelThe Boeing Company | General Electric Company | Microsoft Corporation | Valero Energy Corporation | | Cardinal Health, Inc. | General Motors Company | PepsiCo, Inc. | Verizon Communications Inc. | International Business Machines Corporation | |
54Walmart | 2017 Proxy Statement•CD&A | 3: Executive Compensation Process and Governance
Top 50 Market Capitalization.While the Select Fortune 100 includes many larger companies than the Retail Industry Survey, Walmart is still the largest company within the Select Fortune 100 in terms of revenues, and is the third largest in terms of market capitalization. To take into account this size discrepancy and the corresponding complexity of our NEOs’ job responsibilities, the CMDC also benchmarks our NEOs’ pay against the 50 largest public companies (including selected non-U.S. based companies), excluding Walmart, in terms of market capitalization at the time of the review. Even among the Top 50, Walmart is the largest company in terms of revenue, and in the top quartile in terms of market capitalization. For fiscal 2017, the Top 50 companies were:
(in billions) $482.1 $211.7 $55.5 $174.0 FY16 Revenue FYE Market Cap Walmart Peer Group Median
Abb VieCaterpillar Inc. | Intel Corporation | AlphabetThe Home Depot, Inc. | International Business Machines Corporation | Amazon.com,Pfizer Inc. | Johnson & Johnson | Amgen Inc. | MasterCard, Incorporated | Anheuser-Busch InBev SA/NV | Medtronic plc | Apple Inc. | Merck & Co., Inc. | AT&T Inc. | Microsoft Corporation | Bayer AG | Nestlé S.A. | Berkshire Hathaway Inc. | Novartis AG | BHP Billiton Limited | Novo Nordisk A/S | BP p.l.c. | Oracle Corporation | British American Tobacco plc | PepsiCo,Walgreens Boots Alliance, Inc. | | Chevron Corporation | Pfizer Inc.International Business | Phillips 66 | The Walt Disney Company | Cisco Systems,Citigroup Inc. | Philip Morris International Inc. | The Coca-Cola CompanyMachines Corporation | The Procter & Gamble | Wells Fargo & Company | | Comcast Corporation | QUALCOMM Incorporated | CVS HealthIntel Corporation | Royal Dutch Shell plc | Exxon Mobil Corporation | Sanofi S.A. | F. Hoffmann-La Roche Ltd. | Schlumberger N.V. | Facebook Inc. | Tencent Holdings Ltd | General Electric Company | Total S.A. | Gilead Sciences, Inc. | Unilever N.V. | GlaxoSmithKline plc | Verizon Communications Inc. | The Home Depot, Inc. | Visa Inc. | HSBC Holdings plc | The Walt Disney Company |
| 48 | | www.walmart.com |
Table of Contents
CD&A | 3: Executive Compensation Process
While we believe that this peer group provides a simplified and Governance•more straightforward comparison to a broad range of companies with complex, international operations, Walmart is still significantly larger than the peer group median by a variety of measures, as shown in the following chart: Walmart | 2017 Proxy Statement Positioning Relative to Compensation Peer Group (as of fiscal year end 2019)55 
The CMDC uses benchmarking data as a general guide to setting appropriately set competitive compensation consistent with our emphasis on performance-based compensation. The CMDC did not attempt to quantify or otherwise assign any relative weightings to any of these peer groups or to any particular members of a peer group when benchmarking against them. While the benchmarking data is generally are used for comparable positions, the CMDC also reviews peer group data for retail CEO positions for purposes of benchmarking the compensation of our executives who lead our operating segments. These executives have significant responsibilities and lead organizations that, considered separately from the rest of our company, are larger than many of the other retailers in the retail peer group, and we believe that these positions are often comparable to or carry greater responsibilities than CEO positions at many of our peer group companies. In addition, from a competitive standpoint, we believe that it is more likely that these leaders would be recruited for a CEO position in the retail industry or elsewhere, rather than for a lateral move to lead an operating segment of a company. Therefore, the CMDC also benchmarks these executives’ compensation against the compensation of CEOs within our retail peer group. What other information does the CMDC consider when setting executive pay? Individual Performance The CMDC considers the individual performance of each NEO, including each NEO’s contributions to our key strategic priorities and operational goals, as described under “Fiscal 2020 NEO Pay and Performance Alignment.Summaries” beginning on page 58. CEO Pay and Performance Alignment The CMDC reviews an assessment by Pay Governance regarding the alignment of our CEO’s pay with our company’s performance, including the appropriateness of our CEO’s pay opportunity compared to peers and the alignment of our CEO’s realizable pay and our performance relative to our peer group companies. Pay GovernanceThis assessment concluded that on a size-adjusted basis, our CEO’s most recent fiscal 2017year (fiscal 2020) and three-year (fiscal 2018-2020) pay opportunity and realizable pay are aligned with Walmart’s relative performance.performance over the same time periods. Tally Sheets Tally Sheets.The CMDC also reviews “tally sheets” prepared by our company’s Global People division.Division. These tally sheets summarize the total value of the compensation realizable by each NEO for the upcoming fiscal year and quantify the value of each element of that compensation, including perquisites and other benefits. The tally sheets also quantify the amounts that would be owed to each NEO upon retirement or separation from our company.
Table of Contents Shareholder Feedback.Executive Compensation
How does shareholder feedback impact executive compensation? Our shareholdersBoard actively seeks and values feedback from shareholders. Over the past several years, in addition to our day-to-day interactions with investors, we have expressed support forexpanded our shareholder engagement to include an annual outreach program focused on strategy, governance, executive compensation, program at eachand other topics suggested by our shareholders. Since our 2019 Annual Shareholders’ Meeting, we invited 35 institutional shareholders representing approximately 570 million Shares, including many of our last six annual shareholders’ meetings. The CMDC considered that support, as well as other feedback fromlargest investors, to participate in our outreach program. We ultimately engaged with shareholders when designingrepresenting approximately 525 million Shares, or about 38% of our executive compensation program and establishing our NEOs’ compensation opportunities for fiscal 2017. 56Walmart | 2017 Proxy Statement•CD&A | 3: Executive Compensation Process and Governance
public float. We also had conversations with the leading proxy advisory firms. 4 | Incentive Goal Setting PhilosophyThis engagement gave us an opportunity to discuss our strategy, our commitment to corporate governance and Process |
How does the CMDC set performance goals?
Performance goals are established in the context of, and consistent with, the company’s enterprise strategy and financial operating plans each fiscal year. This process begins with the Board’s review of the company’s overall enterprise strategy and long-term financial plan beginning in the spring and culminating at an annual Board strategic planning meeting. Following the strategic planning meeting, the annual operating plans of the company and each of its operating segments are established with SPFC and Board input. The CMDC then establishes performance goals under our annual- and long-term incentive programs that are consistent with these operating plans:
Long-Range Planning April - September • Assess competitive landscape and macro trends • Refine enterprise strategy and segment-specific initiatives • Develop annual operating plan in light of long-range planning and strategic initiatives • October investor conference-review strategy and planned capital expenditures • Review choice of incentive metrics to ensure that they support enterprise strategy • Establish performance goals aligned with annual operating plan Annual Operating Plan September - January Incentive Plans January - March Incentive Plans Aligned with Strategic and Financial Planning Process
In fiscal 2016, we articulated our strategy to become the first retailer to deliver a seamless shopping experience at scale. We began executing on this strategy by making significant multi-year investments in our people, technology, and e-commerce supply chain to improve our customers’ experience today while positioning Walmart for sustainable growth in the future. We also continued to focus on managing our global portfolio by closing certain underperforming stores and selling certain assets while also continuing our investments in e-commerce, including acquiring e-commerce businesses.
In October 2015, we provided greater visibility into the long-term implications of our strategy by announcing our 3-year financial plan. At that time, highlights of our 3-year financial plan included:
o | Adding $45 billionexecutive compensation best practices, how our governance and compensation practices help to $60 billionsupport our strategy, and our commitment to sustainability and shared value. While our shareholders expressed a wide range of perspectives in sales growththese meetings, we received generally positive feedback on our strategy, our changes to our Board and committee structure over a three-year period. | | | o | Generating approximately $80 billionthe past few years to support that strategy, our executive compensation program, and recent enhancements to our proxy statement disclosures. The feedback we have received from our shareholders, including the results of our say-on-pay proposal, is regularly communicated to the CMDC, the NGC, and the Board. We believe that the results of our say-on-pay proposals over the past several years, shown in operating cash flow over a three-year period. | | | o | Investing an incremental $2.7 billion over two years in U.S. associate wagethe chart to the right, also indicate that shareholders generally are supportive of our executive compensation program, and training initiatives. | | | o | Investing several billion dollars over a three-year period in lower prices fortherefore the CMDC made no material changes to our U.S. customers. | | | o | Asexecutive compensation program as a result of our strategic investments, operating income and earnings-per-share were expected to decline during fiscal 2017.this vote. | |  |
 | | Fiscal 2020 Performance Metrics |
CD&A | 4: Incentive Goal Setting Philosophy and Process•Walmart | 2017 Proxy Statement 57
Consistent with our 3-year financial plan, in February 2016 we provided specific fiscal 2017 guidance regarding earnings-per-share, which at that time we estimated would decrease between 6% and 12%, and net sales growth, which we estimated would be relatively flat. In March of 2016, the CMDC established sales, operating income, and ROI goals for fiscal 2017 under our incentive plans, consistent with this guidance. For example, the total company target operating income and sales goals for fiscal 2017 were as follows:
| Incentive Metric | Fiscal 2017 Target Goal
(in millions) | % Change from Fiscal 2016
(excluding currency and fuel) | | Total Company Sales | $ 483,384 | 2.9 % | | Total Company Operating Income | $ 22,840 | -5.3 % |
These incentive goals were established with the intent that performance in line with our operating plans and guidance should result in payouts approximately at target. In order to achieve the maximum goals, our performance would have to exceed our operating plans to a significant degree. Threshold performance goals are set at a level that is attainable and below which the company could not justify a payout. The CMDC’s independent compensation consultant annually evaluates the difficulty of our target performance goals and has consistently found these goals to be challenging.
Why does the CMDC set goals each year under our long-term equity incentive program?
The CMDC has found setting goals annually for long-term equity awards, with a three-year vesting period, is the most effective approach for our long-term equity incentive program for the following reasons:
o | As the largest global retailer, Walmart’s operating results are significantly impacted by macroeconomic and regional economic factors that may change drastically and that are outside of management’s control. These economic factors, as well as the rapidly evolving retail industry, make it difficult to forecast accurately over a three-year period. For example, in fiscal 2008, our officers were granted performance shares with three-year sales and ROI performance goals. Subsequently, the global financial downturn in 2008 had the effect of making these three-year goals virtually unachievable only a few months into the three-year performance period. We believe that performance goals cease to be an effective tool in motivating performance if the goals either become unrealistic or too easy to achieve due to macroeconomic factors beyond the control of our executives. While some companies attempt to address the impact of macroeconomic factors by using relative goals in their long-term incentive plans, the CMDC has determined that relative goals are not the right approach for Walmart for the reasons described on page 59. The CMDC regularly reviews Walmart’s performance relative to peers and the relative alignment of pay and performance to ensure that our incentive programs are operating as intended. | | | o | Another advantage of this approach is more easily understandable and better aligned performance goals, which the CMDC believes are more effective in motivating performance. As described above, our incentive goals are aligned with our enterprise strategy, business plan, and expectations regarding financial performance. These expectations necessarily change from year-to-year based on macroeconomic conditions, strategic investments, and other factors. For example, if we were to set three-year sales goals, this would result in a situation in which our leaders have three differing sales goals at any one time – one for each outstanding tranche of performance equity. The CMDC believes that combining annual performance goals with a three-year vesting period effectively balances long-term focus with clear and understandable performance goals. As described on page 51, beginning with the awards granted in January 2017, the CMDC further simplified our long-term equity program by providing for a one-year performance period followed by an additional two-year time-based vesting period. |
58Walmart | 2017 Proxy Statement•CD&A | 4: Incentive Goal Setting Philosophy and Process
5 | Fiscal 2017 Performance Metrics |
What financial performance metrics are used in our incentive programs, and why did the CMDC select these metrics? Our NEOs’ performance-based pay for fiscal 20172020 was based on achieving objective, pre-established financial goals for the following metrics: 2017Fiscal 2020 Financial Performance Metrics
MetricsAnnual CashIncentive75%Operating Income (total company and/or divisional)*25%Sales (total company and/or divisional)* Long-termPerformanceShare Units50%ROI (total company)* Units50%Sales (total company and/or divisional)*
| Annual Cash Incentive | | Long-Term Performance Equity |  | |  |
| * | For purposes of our incentive programs, total company and International sales, operating income, and ROI are calculated on a constant currency basis and exclude certain items, such as revenue from fuel sales. See pages 63-64page 57 for more information. |
| 50 | | www.walmart.com |
Table of Contents Executive Compensation The CMDC concluded that the metrics described above are aligned with our larger enterprise strategy and appropriate and effective in driving results tied to shareholder value. In reaching this conclusion, the CMDC considered the following factors: o● | These performance metrics are aligned with our enterprise strategy and can be impacted by our executives.Unlike metrics tied to stock price or shareholder return, our executives can have a direct impact on our sales, operating income, and ROI. Furthermore, unlike earnings per share and other share-based metrics, sales, operating income, and ROI are not materially impacted by our share repurchase program. | | ● | | o | These metrics are important for judging retail performance.Sales, operating income, and ROI measures historically have historically been, and continue to be, important indicators of retail performance, and we believe that our performance in these areas is important to our shareholders. | | ● | | o | The CMDC believes that success with respect to these metrics will support shareholder value over the long term.long-term.The CMDC’s independent compensation consultant has reviewed the historical correlation of various performance metrics and TSR within the retail industry and found that the metrics used in our incentive plans generally are aligned with TSR in the retail industry. We believe that goodstrong performance with respect to these metrics should translate into shareholder value creation over time. | | ● | | o | It is difficult to effectively applyThe CMDC believes that relative TSR and other relative performance metrics are not the best way to Walmart’s executive compensation program.incentivize our executives.There are several key differences in our business compared to other publicly-traded retailers in the U.S., including our size, our significant international operations, our product mix, and our variety of formats.formats, and our growing eCommerce and omni-channel offerings. While the CMDC closely monitors Walmart’s performance relative to that of our peers when making compensation decisions, the CMDC believes that the best approach for Walmart is to tie our executive compensation to performance metrics that are aligned with our strategy and operating plans and that can be directly impacted by our executives. Additionally, because a significant portion of TDC is in the form of equity awards, the CMDC believes that our executives’ interests are appropriately aligned with the interests of our shareholders. | | ● | | o | The combination of these performance metrics mitigates risk.Using a combination of performance metrics mitigates the risk that our executives could be motivated to pursue results with respect to one metric to the detriment of our company as a whole. For example, if management were to prioritize increasing sales by pursuing strategies that would negatively impact profitability, resulting increases in incentive pay based on sales should be offset by decreases in incentive pay based on operating income and ROI. |
CD&A | 5: Fiscal 2017 Performance Metrics•Walmart | 2017 Proxy Statement59
What non-financial metrics wereare used to assess the performance of our NEOs, subject to under our incentive programs for fiscal 2017? and how can these metrics impact NEO pay? Culture, Diversity, and Inclusion Goals.Inclusion.Since fiscal 2005,The performance evaluation of each of our NEOs and manymost other management associates have had objectives under ourincludes performance with respect to culture, diversity, and inclusion program. Theinclusion. As described on page 48, the CMDC established these objectives because it believes that diversity and inclusion contribute to an engaged and effective workforce. For fiscal 2017, our culture, diversity and inclusion goals program included objectives related to representation and promotion, mentoring, participation in diversity and inclusion events, and development of business-specific diversity and inclusion plans. Associates subject to our culture, diversity and inclusion goals program have 10% of their annualconsiders performance evaluation tied to diversity and inclusion, and can have theirevaluations, along with other factors, when making pay decisions. Additionally, any associate’s annual cash incentive payment may be reduced by 15%up to 30% if they violateengage in behavior inconsistent with our discrimination and harassment policies. Based on the report of our chief diversity officer, the CMDC determined that each NEO satisfied his or her diversity goals for fiscal 2017. For more information about Walmart’s commitment to diversity and inclusion and key diversity and inclusion initiatives, please see Walmart’s 2016most recent Culture, Diversity, and Inclusion Report, which is availablecan be found on our corporate website athttps://cdn.corporate.walmart.com/8c/08/6bc1b69f4a94a423957d4c2162db/wm-cdireport2016-v27-reader-pages.pdf.under the section titled “ESG Investors.” |
Table of Contents Executive Compensation  | | Incentive Goal Setting Philosophy and Process |
How does the CMDC set performance goals? EthicsPerformance goals are established in the context of, and Compliance Goals.Since fiscal 2014, our Executive Officers’ cash incentive payments have also been subject to achieving adequate progress in implementing enhancements toconsistent with, the company’s enterprise strategy, financial operating plans, and financial guidance each fiscal year. This process begins with the Board’s review of the company’s overall enterprise strategy and long-term financial plan beginning in the spring and culminating at an annual Board strategic planning meeting. Following the strategic planning meeting, the annual operating plans of the company and each of its operating segments are established with SPFC and Board input. The CMDC then establishes performance goals under our annual and long-term incentive programs that are consistent with these operating plans:
Incentive Plans Informed by Strategic and Financial Planning Process | ● | | ● | | ● | | | | | | Long-Range Planning
April - September●Assess competitive landscape and macro trends ●Refine enterprise strategy and segment-specific initiatives | | Annual Operating Plan
September - January●Develop annual operating plan in light of long-range planning and strategic initiatives ●Review strategy and planned capital expenditures | | Incentive Plans
September - March●Review choice of incentive metrics to ensure that they support enterprise strategy ●Establish performance goals aligned with annual operating plan and guidance |
In fiscal 2016, we began articulating our strategy to become the first retailer to deliver a seamless shopping experience at scale. We began executing on and fine-tuning this strategy by making significant multi-year investments in our people, technology, and eCommerce supply chain to improve our customers’ experience today while positioning Walmart for sustainable growth in the future. We also continued to focus on optimizing our global compliance program (now known as our ethicsportfolio through restructuring certain eCommerce operations and compliance program). Our company is committed to havingby closing certain underperforming stores and maintaining a strongselling certain assets while also continuing these strategic investments. At the time, we announced that these investments would result in short-term declines in operating income and effective global ethics and compliance program in every country in which we operate.earnings per share. Consistent with our long-term strategic plan, in February 2019 we provided guidance regarding our expected financial performance for fiscal 2020. In this guidance we estimated that commitment,we would have constant currency net sales growth of at least 3% for fiscal 2020. We also estimated that our fiscal 2020 consolidated operating income would decline by a low single-digit percentage range, including Flipkart, and increase by a low single-digit percentage range, excluding Flipkart. In March of 2019, the CMDC established sales, operating income, and ROI goals for fiscal 2020 under our incentive plans, consistent with our guidance. For example, the total company target operating income and sales goals for fiscal 2020 were as follows: | Incentive Metric | | Fiscal 2020 Target Goal
(in millions)
($) | | % Change from Fiscal 2019
(excluding certain items
described on p. 57) | | Total Company Operating Income | | 21,319 | | -2.9% | | Total Company Sales | | 510,304 | | 3.5% |
These incentive goals were established with the intent that performance in line with our operating plans and guidance should result in payouts approximately at target. In order to achieve the maximum payout goals, our performance would have to exceed our operating plans to a significant degree. Threshold performance goals are set at a level that is attainable and below which the company could not justify a payout. The CMDC’s independent compensation consultant annually evaluates the difficulty of our target performance goals and has consistently found these goals to be challenging. Additionally, over the past fewten years, under both our annual and long-term incentive plans, our total company performance has made significant improvements to our ethicsexceeded target incentive goals in five years and compliance program around the world. Tofallen short of target incentive goals in five years. We believe this is further emphasize our commitment to ethics and compliance, in early fiscal 2017, our company’s senior leadership again developed objectives for implementing further enhancements to our global ethics and compliance program on a prioritized basis. These objectives covered such subject matters as anti-corruption, anti-money laundering, responsible sourcing, food safety, environmental compliance, health and safety compliance, and licensing and permits. These objectives sought to enhance key elements of a corporate ethics and compliance program, including, but not limited to, developing and implementing enhanced compliance protocols and procedures, hiring and training of key compliance personnel, monitoring and assessment of various elementsevidence of the program, internal communications, and access to information.effectiveness of our goal-setting process in establishing performance goals that are appropriately challenging. | 52 | | www.walmart.com |
Table of Contents Executive Compensation If, in the judgment of the Audit Committee, the company had not achieved adequate progress in implementing these objectives, thenWhy does the CMDC could have exercised negative discretionset goals each year under our long-term equity incentive program?
The CMDC has found that setting long-term equity performance goals each year, with awards having a three-year vesting period, is the most effective approach for our long-term equity incentive program for the following reasons: As the largest global retailer, Walmart’s operating results are significantly impacted by macroeconomic and regional economic factors that may change drastically and that are outside of management’s control.These economic factors, the rapidly evolving retail industry, and our own ongoing strategic transformation make it difficult to reduceforecast accurately over a three-year period. We believe that performance goals cease to be an effective tool in motivating performance if the goals either become unrealistic or eliminatetoo easy to achieve due to macroeconomic factors beyond the fiscal 2017 cash incentive payments to one or morecontrol of our Executive Officers. During fiscal 2017, management reported regularlyexecutives or due to changes in our strategy and related investments. While some companies attempt to address the Audit Committee regarding ongoing enhancements to our global ethics and compliance program and progressimpact of macroeconomic factors by using relative goals in implementing these objectives. Attheir long-term incentive plans, the end of fiscal 2017, the Audit CommitteeCMDC has determined that relative goals are not the right approach for Walmart for the reasons described on pages 48-49. The CMDC regularly reviews Walmart’s performance relative to peers and the relative alignment of pay and performance to ensure that our incentive programs are operating as intended. Another advantage of this approach is that it is more easily understandable and results in its qualitative judgment, adequate progress had been achievedperformance goals that are better aligned with our strategic transformation; the CMDC believes this approach is more effective in implementing these objectivesmotivating performance.Our incentive goals are aligned with our enterprise strategy, business plan, and reported its determinationexpectations regarding financial performance. These expectations necessarily change from year-to-year based on macroeconomic conditions, strategic investments, and other factors. For example, if we were to the CMDC. Factors relied on by the Audit Committee in makingset three-year sales goals, this determination included the progress achieved on workstreamswould result in a varietysituation in which our leaders have three differing sales goals at any one time – one for each outstanding tranche of ethicsperformance equity. We believe this approach would potentially be confusing and compliance areas andcould undermine the extent to which that progress reflected sustainable, long-term change in the company’s people, processes, systems, and culture. Based on the qualitative assessment of the Audit Committee, the CMDC determined not to exercise negative discretion to reduce or eliminate the cash incentive payments to anyeffectiveness of our performance equity program as a tool for incentivizing performance. The CMDC believes that combining annual performance goals with a three-year vesting period effectively balances long-term focus with clear, understandable, and aligned performance goals. 2020 Proxy Statement 53
Table of Contents Executive Officers for fiscal 2017. Compensation For more information about specific enhancements to our global ethics and compliance program during fiscal 2017, please see Doug McMillon’s letter about our Global Ethics and Compliance Program, which is available on our website athttp://corporate.walmart.com/ global-responsibility/global-compliance-program-report-on-fiscal-year-2017.
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60Walmart | 2017 Proxy Statement•CD&A | 5: Fiscal 2017 Performance Metrics
| | | 6 | Fiscal 20172020 Performance Goals and Performance |
What were the fiscal 20172020 financial goals under our annual cashand long-term incentive plan, and howplans? Our NEOs’ performance-based pay for fiscal 2020 was based on achieving objective, pre-established financial goals for the following weighted metrics: | Annual Cash Incentive | | Long-Term Performance Equity |  | |  |
| * | For purposes of our incentive programs, total company and International sales, operating income, and ROI are calculated on a constant currency basis and exclude certain items, such as revenue from fuel sales. See page 57 for more information. |
How did we perform in comparison to those goals? 2017Fiscal 2020 Annual Cash Incentive Goals and Results
(in millions)
Adjusted Constant Currency Operating Income*
Total Company Threshold (37.5%) Target (100% payout) Max (125% Payout) Actual $23,660 No Payout $21,486 $22,840 $23,083 Walmart U.S. No Payout $17,101 $17,813 $17,902 International No Payout $5,477 $5,928 $5,987 Adjusted Constant Currency Sales (excluding fuel)* Total Company No Payout Actual $483,559 $473,456 $483,384 $485,855 Actual $306,287 Walmart U.S. No Payout $300,526 $306,346 $307,878 Actual $121,590 International No Payout $118,702 $120,962 $121,566
Total Company Walmart U.S. International Threshold (37.5%) Payout Target (100% payout) Max (125% Payout) Actual $23,660 No Payout $21,486 $22,840 $23,083 Actual $18,598 No Payout $17,101 $17,813 $17,902 Actual $6,122 No Payout $5,477 $5,928 $5,987
Adjusted Constant Currency Sales (excluding fuel)*
Actual $483,559 Total Company Walmart U.S. International $306,287 $121,590 $473,456 $483,384 $485,855 $300,526 $307,878 $118,702 $120,962 $121,566 $306,346 No Payout No Payout No Payout Actual Actual
Constant Currency Operating Income (excluding certain items*)
(in millions) |
 | * | In order to make results comparable from year to year,year-to-year, we exclude fuel sales, the impact of currency exchange rate fluctuations and the effects of certain other items from our reported results of operations for incentive plan purposes. See pages 63-64page 57 for more information. |
CD&A | 6: Fiscal 2017 Performance Goals and Performance•Walmart | 2017 Proxy Statement61
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Table of Contents Executive Compensation Constant Currency Sales (excluding certain items*)
(in millions) |
What were the fiscal 2017 financial goals under our long-term incentive program, and how did we perform in comparison to those goals?
2017 Performance Share Units Goals and Results
Payout Percentage Adjusted ROI* Threshold (50% vesting) Target (100% vesting) Max (150% vesting) Actual 15.30% No Payout 14.21% 14.86% 15.03% Adjusted Constant Currency Sales (excluding Fuel)* (in millions) Actual $483,559 Total Company No Payout $469,340 $483,384 $488,259 Actual $306,287 Walmart U.S. No Payout $297,462 $306,346 $309,410 Actual $121,590 International No Payout Actual $121,590 $118,130 $120,962 $122,171
Actual Actual Actual Actual Payout Percentage Threshold (50% vesting) Target (100% vesting) Max (150% vesting) 15.30% Adjusted ROI* 14.21% 14.86% 15.03% No Payout Adjusted Constant Currency Sales (excluding Fuel)* (in millions) $483,559 Total Company Walmart U.S. International No Payout No Payout No Payout $469,340 $483,384 $488,259 $306,287 $121,590 $297,462 $306,346 $309,410 $118,130 $120,962 $122,171
 | * | In order to make results comparable from year to year,year-to-year, we applyexclude fuel sales, the impact of currency exchange rate fluctuations, Sam’s Club tobacco sales, and the effects of certain adjustments toother items from our reported results of operations for purposes of our incentive plans.plan purposes. See pages 63-64page 57 for more details.information. |
62 Walmart | 2017 Proxy Statement•CD&A | 6: Fiscal 20172020 Long-Term Performance Equity Goals and PerformanceResultsConstant Currency Sales (excluding certain items*)
(in millions) |
  | * | In order to make results comparable from year-to-year, we exclude fuel sales, the impact of currency exchange rate fluctuations, Sam’s Club tobacco sales, and the effects of certain other items from our reported results of operations for incentive plan purposes. See page 57 for more information. Additionally, in calculating the long-term performance equity performance for Mr. McMillon and Mr. Biggs, the CMDC used an adjusted ROI of 13.9%. The CMDC determined that certain losses and expenses related to business restructuring charges, which primarily included non-cash impairment charges on certain trade names and other long-lived assets, should not be excluded when determining Mr. McMillon’s and Mr. Biggs’ incentive results for fiscal 2020 because such losses and expenses were a result of enterprise-level strategic decisions. |
2020 Proxy Statement 55
TheTable of Contents
Executive Compensation How were these results used to determine fiscal 2020 award payouts? Fiscal 2020 performance compared to each of the annual cash incentive goals shown above was then weighted according to each NEO’s performance measure weightings shown above, and was then averaged with results for the prior two years within each three-year performance cycle,to determine payout percentages, as illustratedshown below: Fiscal 2020 Annual Cash Incentive Payouts | Fiscal 2014 Grant | | | | | | | | | | | | Segment | FY 15 | | FY 16 | | FY 17 | | | | Fiscal 2017 | | | | Performance | | Performance | | Performance | | | | Payout | | | Walmart U.S. | 73.30% | | 106.35% | | 124.83% | | | | 101.49% | | | International | 74.30% | | 111.80% | | 138.00% | | | | 108.03% | | | Total Company | 71.75% | | 104.35% | | 125.90% | | | | 100.67% | | | | | | Fiscal 2015 Grant | | | | | | | | | | | | Segment | | | FY 16 | | FY 17 | | FY 18 | | | | | | | | Performance | | Performance | | Performance | | | | | Walmart U.S. | | | 106.35% | | 124.83% | | TBD | | | | | International | | | 111.80% | | 138.00% | | TBD | | | | | Total Company | | | 104.35% | | 125.90% | | TBD | | | | | | | | Fiscal 2016 Grant | | | | | | | | | | | | Segment | | | | | FY 17 | | FY 18 | FY 19 | | | | | | | | | Performance | | Performance | Performance | | | | Walmart U.S. | | | | | 124.83% | | TBD | TBD | | | | International | | | | | 138.00% | | TBD | TBD | | | | Total Company | | | | | 125.90% | | TBD | TBD | | |
| Total Company | | Walmart U.S. | | Sam’s Club | | International | | Component | Weighting | Payout | | Weighting | Payout | | Weighting | Payout | | Weighting | Payout | | Total Company - OI | 75.00% | 125.00% | | 25.00% | 125.00% | | 25.00% | 125.00% | | 25.00% | 125.00% | | Total Company - Sales | 25.00% | 85.80% | | | | | | | | | | | Divisional - OI | | | | 50.00% | 125.00% | | 50.00% | 125.00% | | 50.00% | 95.57% | | Divisional - Sales | | | | 25.00% | 85.48% | | 25.00% | 125.00% | | 25.00% | 69.59% | | Payout (% of target) | 115.20% | | 115.12% | | 125.00% | | 96.43% |
See “Fiscal 2020 NEO Pay and Performance Summaries” for more details about each NEO’s fiscal 2020 annual cash incentive payout. Fiscal 2020 Performance Equity Payouts Our NEOs received performance-based RSUs with a one-year performance period followed by a two-year vesting period (see illustrations below). | * | The fiscal 2020 long-term performance equity performance for Mr. McMillon and Mr. Biggs was 108.86%. In calculating the performance equity percentage for Mr. McMillon and Mr. Biggs, the CMDC determined that certain losses and expenses related to business restructuring charges, which primarily included non-cash impairment charges on certain trade names and other long-lived assets, should not be excluded because such losses and expenses were a result of enterprise-level strategic decisions. |
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Table of Contents Executive Compensation Why do the results used in our incentive plans differ from our reported results of operations for fiscal 2017?2020? The CMDC’s objective in administering our incentive plans is to causeensure that incentive awards to beare calculated on a comparable basis from year-to-year, and to ensure that plan participants are incentivized and rewarded appropriately.appropriately for performance within their control. The CMDC undertakes a rigorous oversight and certification process to determine the items to exclude from our reported results of operations for purposes of our incentive plans.This process is not outcome-driven and includes both positive and negative adjustments to reported results of operations. For these reasons, the following types of items are excluded from our incentive goals and/or our incentive calculations: ○● | Items excluded by the terms of the incentive plans.Like many other companies, our shareholder-approved incentive plans requirespecify that incentive payouts be calculated by excluding the impact of currency exchange rate fluctuations,recent acquisitions and divestitures, restructurings, and store closings, and similar items onthat similarly impact our operating results. In particular, duringFor fiscal 2017,2020, these items represented the approximate $11 billion negative impact to reported net sales from currency exchange rate fluctuations also significantly negatively impactedmajority of the difference between our reported operating income and our operating income as calculated for incentive plan purposes.The largest single operating income exclusion, representing a majority of our companythe difference between reported operating income and itsoperating income for incentive plan purposes, was the exclusion of certain losses and expenses related to business restructuring charges, which primarily included non-cash impairment charges on certain trade names and other long-lived assets in the Walmart U.S. and Walmart International division.segments. As described on page 57, these losses and expenses were not excluded for certain NEOs because such losses and expenses were a matterresult of policy, we generally have not hedged for currency exchange rate fluctuations.enterprise-level strategic decisions. | | ● | | ○ | Items excluded at the time incentive goals are established.When the CMDC sets incentive goals, it typically excludes the impact of certain items from the performance goals. In particular,For example, because as a matter of policy we generally do not hedge for currency exchange rate fluctuations, the CMDC sets incentive goals on a constant currency basis excluding the impact of currency exchange rate fluctuations. Similarly, sales goals that exclude the impact of fuel sales because fuel prices are volatile and subject to significant fluctuation, which is out of our management’s control. Also, in lightSales goals also exclude Sam’s Club tobacco sales.For fiscal 2020, items excluded at the time incentive goals were established represented the majority of the difference between our significant ongoing investments in e-commerce, when the CMDC established fiscal 2017 operating income goals forreported sales and our operating segments, it limited the impact of operating losses attributable to the e-commerce operations of those operating segmentssales as calculated for incentive plan purposes in order to encourage our segment leaders to make these necessary investments. Losses from e-commerce operations are not limited for purposes of total company incentive goals.purposes. |
CD&A | 6: Fiscal 2017 Performance Goals and Performance•Walmart | 2017 Proxy Statement 63
○● | Items excluded so that operating results are calculated on a comparative basis from year-to-year.Consistent with the terms of our incentive plans, the CMDC may exclude certain other items so that results can be calculated on a comparative basis from year-to-year. During fiscal 2017,2020, these included, among others, adjustments related to our new and simplified paid time off policy in the U.S. and an adjustment to useful lives of certain assets in certain markets. These adjustments had the impact of increasing operating income for incentive plan purposes. The exclusionstore closures in Chile due to unrest. On a net basis, this category of these comparative items hadadjustments did not have a less than 1%significant impact on the amount of our CEO’s fiscal 2017 cash2020 incentive payment, and a less than 2% impact on the amount of each of our other NEOs’ fiscal 2017 cash incentive payments.results. |
Impact of Excluded Items on Fiscal 2020 Performance for Incentive Plan Purposes As described above and shown below, by a significant margin, the largest items excluded from our fiscal 20172020 reported results of operations consisted of (i) items automatically excluded by the terms of our plans, such as currency exchange rate fluctuations and the impact of acquisitions, divestitures, and restructurings,restructurings; and (ii) items pre-determined to be excluded at the time incentive goals were set, such as the impact of currency exchange rate fluctuations on operating income and sales, and the impact of fuel sales and e-commerce losses above the pre-set limit established when goals were set at the beginning of fiscal 2017. All amounts shown below are in millions:Sam’s Club tobacco sales on sales. | $ in millions | Operating Income | | Sales | | Metric | Total Company
($) | Walmart U.S.
($) | Sam’s Club
($) | International
($) | | Total Company*
($) | Walmart U.S.
($) | Sam’s Club
($) | International
($) | | As Reported | 20,568 | 17,380 | 1,642 | | 3,370 | | 519,926 | | 341,004 | | 58,792 | | 120,130 | | Plan and pre-determined items | 1,148 | 726 | (5 | ) | 424 | | (12,118 | ) | (2,161 | ) | (10,016 | ) | 61 | | Comparative items | 190 | 93 | 14 | | 82 | | 177 | | (153 | ) | 9 | | 318 | | Performance for Incentive Plan Purposes | 21,906 | 18,199 | 1,651 | | 3,876 | | 507,985 | | 338,690 | | 48,785 | | 120,509 |
| * | Divisional sales may not sum up to Total Company sales due to rounding. |
| | | Operating Income | Sales | | | | | | | | | | Walmart | | | | | | Walmart | | | Metric | | Total Company | | | Walmart U.S. | | | International | | Total Company | | | Walmart U.S. | | | International | | | As Reported | | $22,764 | | | $17,745 | | | $5,758 | | $481,317 | | | $307,833 | | | $116,119 | | | Plan and pre-determined items | | $613 | | | $597 | | | $362 | | $1,977 | | | ($1,546 | ) | | $5,206 | | | Comparative | | $283 | | | $256 | | | $2 | | $265 | | | - | | | $265 | | | Performance for Incentive Plan Purposes | | $23,660 | | | $18,598 | | | $6,122 | | $483,559 | | | $306,287 | | | $121,590 | |
Finally, when2020 ROI Adjustments for Long-Term Performance Equity Purposes.When calculating ROI for purposes of our long-term performance share planequity purposes, we used the adjusted operating income shown in the table above in the row titled “Performance for Incentive Plan Purposes.” We also made certain minor adjustments to our average invested capital, which is a component of the ROI calculation, to make the calculation comparable year-over-year. The adjustments to average invested capital had the impact of reducing our ROI for incentive plan purposes. As a result of both the operating income adjustments and the average invested capitalapplying these adjustments, our ROI was 15.3%13.9% for purposes of orour long-term performance share plan, compared to a reported ROI of 15.2%13.4%.
64 Walmart | 20172020 Proxy Statement•57
CD&A | 6: Fiscal 2017 Performance Goals and PerformanceTable of Contents
| | | 7 | Fiscal 20172020 NEO Pay and Performance Summaries |
How did our fiscal 20172020 performance impact our CEO’sNEOs’ compensation? Doug McMillon– President and CEO Fiscal 20172020 Highlights In addition to the solid financial performance, described above on page 48, during fiscal 20172020 Mr. McMillon acceleratedcontinued to accelerate Walmart’s transformation strategy to become the first company to offer a seamless shopping experience at scale.seamlessly integrate our retail stores and eCommerce in an omni-channel offering.○● | We continued to deliver on our key strategic priorities and saw top-linecontinued momentum in storesfood and e-commerce.consumables at Walmart U.S., including eCommerce. | | ● | We accelerated innovation in our business to make shopping faster and easier for our customers, with launching Delivery Unlimited from 1,600 locations in the U.S., expanding Same Day Pickup to nearly 3,200 locations, and launching free NextDay delivery from Walmart.com. | ○ | Our earnings-per-share and operating income exceeded our initial guidance. | | | ○ | In September, we completed the acquisition of Jet.com, Inc. | | | ○● | We continued to make investments in our associates, bringing our average hourly total compensation and technology, including a new alliance with JD.com; expanded online grocery;benefits to more than $18 in the U.S. and announced free 2-day shipping at Walmart.com with a minimum $35 order.continuing to invest in training and education, which has led to reduced turnover and higher customer satisfaction. |
Fiscal 2017 Target TDC $20.7 million 55.66% Performance Share Units 6.14%Base Salary 18.55%Restricted Stock 19.65%Annual Cash Incentive 75.3% at risk
Fiscal 2017 Incentive Payouts
Annual cash incentive.As
Key Compensation Decisions for Fiscal 2020 | | Substantial Stock Ownership | The CMDC relies on the factors described on page 48 in establishing the target TDC of Mr. McMillon and our other NEOs. After considering those factors, the CMDC made no changes to Mr. McMillon’s target TDC for fiscal 2020. When compared to similar positions within our peer group companies, Mr. McMillon’s fiscal 2020 target TDC was at approximately the 75thpercentile. | | Mr. McMillon is significantly invested in Walmart common stock, owning Shares valued at approximately 112 times his annual base salary, well in excess of our CEO, Mr. McMillon’s annual cash incentive is based on the total company operating income and sales performance described above on page 61. | | | Performance | Payout | | | Performance Metric | Weighting | (% of Target) | (% of Target) | Fiscal 2017 Incentive Payout | | Total Company OI | 75% | 125.0% | | | | | | | 119.2% | $ 4,851,561 | | Total Company Sales | 25% | 101.8% | | |
Long-term incentive.Mr. McMillon’s long-term performance share units are based on the total company sales and ROI performance described above on page 62.
| | Fiscal 2017 | 3-Year Performance | | | Performance Metric | Weighting | (% of Target) | Number of PSUs Earned | | Total Company Sales | 50% | | | | | | 100.7% | 147,109 | | Total Company ROI | 50% | | |
Key Compensation Decisions for Fiscal 2017
The CMDC made no changes to Mr. McMillon’s TDC for fiscal 2017, and Mr. McMillon did not receive any special awards for fiscal 2017. When compared to comparable positions within our peer group companies, Mr. McMillon’s fiscal 2017 target TDC was approximately at the 75thpercentile of the Top 50 Market Cap peer group and in the top quartile of the Retail Industry and Select Fortune 100 peer groups.
Substantial Stock Ownership
Mr. McMillon is significantly invested in Walmart common stock, owning shares valued at approximately 47 times his annual base salary, and well in excess of his stock ownership guidelines requirement of 7 times his annual base salary. We believe that Mr. McMillon’s significant interest in Walmart stock serves to align his interests with those of our shareholders.
CD&A | 7: Fiscal 2017 NEO Pay and Performance Summaries•Walmart | 2017 Proxy Statement 65
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Table of Contents Executive Compensation Fiscal 20172020 Highlights ○● | We generated $20.9 billion in free cash flow, an increase of nearly $5 billion.Mr. Biggs’ integrated financial framework, business perspective, and guidance has continued to help Walmart build trust with customers, investors, and other stakeholders. | | | ○ | We reduced our debt levels while making key strategic investments. | | | ○● | We maintained consistent working capital discipline in the context of portfolio optimization, continued key strategic investments, and management of inventory and payables.our ongoing transformation. | | ● | We generated $25.3 billion in operating cash flow. | ○● | We returned $14.5$11.8 billion to shareholders in the form of dividends and share repurchases. |
 Key Compensation Decisions for Fiscal 2020 | The CMDC relies on the factors described on page 48 in establishing the target TDC of our NEOs. For fiscal 2020, the CMDC increased Mr. Biggs’ salary by 2.5% and increased his target annual equity award by approximately $1.6 million, which resulted in an approximately 24.5% increase in Mr. Biggs’ target TDC. The CMDC approved these increases in light of Mr. Biggs’ competitive positioning and his integrated financial framework, business perspective, and guidance which has helped Walmart build trust with customers and shareholders. When compared to comparable positions within our peer group companies, Mr. Biggs’ fiscal 2020 target TDC was between the 50th and the 75th percentiles. Mr. Biggs received no special awards for fiscal 2020. |
Fiscal 2017 Target TDC $5.6 million 40.54% Performance Share Units 15.32% Base Salary 13.51% Restricted Stock 30.63%Annual Cash Incentive 71.2% at risk2020 Proxy Statement 59
Fiscal 2017 Incentive Payouts
Table of Contents Annual cash incentive.Executive CompensationAs our CFO, Mr. Biggs’ annual cash incentive is based on the total company operating income
Suresh KumarGlobal Chief Technology Officer and sales performance described above on page 61.| | | Performance | Payout | | | Performance Metric | Weighting | (% of Target) | (% of Target) | Fiscal 2017 Incentive Payout | | Total Company OI | 75% | 125.0% | | | | | | | 119.2% | $2,026,251 | | Total Company Sales | 25% | 101.8% | | |
Chief Development Officer Long-term incentive.Mr. Biggs’ long-term performance share units are based on the total company sales and ROI performance described above on page 62.| | Fiscal 2017 | 3-Year Performance | | | Performance Metric | Weighting | (% of Target) | Number of PSUs Earned | | Total Company Sales | 50% | | | | | | 100.7% | 35,698 | | Total Company ROI | 50% | | |
Key Compensation Decisions for Fiscal 2017
Mr. Biggs was promoted to EVP and CFO on January 1, 2016, so fiscal 2017 was his first full year in role. When compared to comparable positions within our peer group companies, Mr. Biggs’ fiscal 2017 target TDC was near the 75thpercentile of the Retail Industry peer group and below the median of the Top 50 Market Cap and Select Fortune 100 peer groups. Mr. Biggs received no special awards during fiscal 2017.
66 2020 HighlightsWalmart | 2017 Proxy Statement•CD&A | 7: Fiscal 2017 NEO Pay and Performance Summaries
| ● | Mr. Kumar joined Walmart in a newly created role on July 8, 2019. | | ● | Developed a long-range plan for a modernized technology stack. | | ● | Formulated Walmart’s enterprise-wide data and analytics strategy. | | ● | Developed a talent plan to attract and retain key technology talent. |
 Additionally, as is our customary practice for newly hired officers, Mr. Kumar received an additional performance equity grant for fiscal 2020. This additional grant was based on the same fiscal 2020 performance goals as his annual described above, and paid out in March 2020. Mr. Kumar received a payout of 87,355 Shares upon the vesting of this award. | | |
Key Compensation Decisions for Fiscal 2020 | Fiscal 2020 was Mr. Kumar’s first partial year in this role as he was hired in July 2019. In addition to the TDC components described above, Mr. Kumar also received a sign-on restricted stock award valued at $5.9 million which was intended to replace equity forfeited when Mr. Kumar left his former employer. This sign-on award is scheduled to vest in two equal installments based on continued employment. Mr. Kumar also received two special performance-based restricted stock unit awards each valued at $2 million, based on achievement of qualitative goals related to technology modernization, building a best-in-class technology organization, enterprise technology risk management, and developing an enterprise-wide data and analytics strategy. The CMDC believes these special awards were appropriate based on Mr. Kumar’s role, experience, and peer comparisons, and necessary to recruit a Global Chief Technology Officer of Mr. Kumar’s caliber. Based on its consideration of the achievements outlined above under “Fiscal 2020 Highlights” above, the CMDC determined that the qualitative goals applicable to the first installment of Mr. Kumar’s special performance-based restricted stock unit award were satisfied. |
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Table of Contents Executive Compensation Greg ForanJudith McKenna– EVP, President and CEO, Walmart International
Fiscal 2020 Highlights | ● | Overall constant currency sales growth of 2.8% in a rapidly evolving global retail environment. | | ● | Continued strength in key markets including Mexico, China, and India. | | ● | Expanded grocery pickup and delivery to additional markets and grew eCommerce sales to 10% of total Walmart International sales. | | ● | Operated with discipline and leveraged expenses as we continue to reshape and optimize our portfolio. |
 Additionally, as is our customary practice for officers promoted to positions of significantly increased responsibility during the first two award cycles following promotion, Ms. McKenna received an additional performance equity grant for fiscal 2020. This additional grant was intended to allow Ms. McKenna to realize a performance equity payout for fiscal 2020 commensurate with her current role for performance equity cycles already in progress. This additional grant was based on the same fiscal 2020 performance goals as her annual performance equity award described above, and paid out in March 2020. Ms. McKenna received a payout of 33,228 shares upon the vesting of this award. | | Key Compensation Decisions for Fiscal 2020 | For fiscal 2020, the CMDC increased Ms. McKenna’s salary by 2.5%, in light of her peer group positioning and her continued strong performance. This base salary increase resulted in an approximately 0.8% increase in Ms. McKenna’s target TDC. In addition, in January 2020, the CMDC awarded Ms. McKenna a retention stock award valued at $1 million in recognition of her contributions to Flipkart and PhonePe. The CMDC believes that Ms. McKenna, as the head of our International operations, has responsibilities comparable to many CEO positions within our peer group companies, and that it is likely that she would be recruited for a CEO position in the retail industry or elsewhere. When compared to COO positions within our peer group, Ms. McKenna’s target TDC is slightly above the median; however, when compared to CEO positions within our peer group companies, Ms. McKenna’s target TDC is below the median. |
Table of Contents Executive Compensation Kathryn McLayEVP, President and CEO, Sam’s Club Fiscal 2020 Highlights | ● | Promoted to current position on November 15, 2019 after successfully leading Walmart U.S. Neighborhood Markets business. |
 Key Compensation Decisions for Fiscal 2020 | The CMDC relies on the factors described on page 48 in establishing the target TDC of our NEOs. Ms. McLay was promoted to her role in November 2019. In addition to her annual compensation described above, Ms. McLay received a $400,000 retention stock award in connection with her performance during fiscal 2020 described above. The CMDC believes that Ms. McLay, in her new role, has responsibilities comparable to many CEO positions within our peer group, and that it is likely that she would be recruited for a CEO position within the retail industry or elsewhere. When compared to COO and CEO positions within our peer group, Ms. McLay’s target TDC is below the median. |
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Table of Contents Executive Compensation John FurnerEVP, President and CEO, Walmart U.S. Fiscal 20172020 Highlights ○● | Mr. Furner was appointed to his current role on November 1, 2019 after serving as EVP, President and CEO of Sam’s Club. | | ● | In the 4thquarter, Walmart U.S. continued its solid performance, completing 9 consecutive quarters of traffic growth and solid comparablecomp store sales growth.grew 1.9% and 6.0% on a two-year stacked basis, while U.S. eCommerce sales grew 35% in the quarter. | | ● | Sam’s Club delivered continued solid top-line results during fiscal 2020, with positive comp sales despite a strategic reduction in tobacco sales; operating income growth of 8%; and eCommerce sales growth of 33%. | ○● | Walmart U.S. sustained improvements in its stores and customer service scores. | | | ○ | We expanded online grocerySam’s Club continued to more than 600 locations ininnovate, launching same-day pickup throughout the U.S. |
 Key Compensation Decisions for Fiscal 2020 | The CMDC relies on the factors described on page 48 in establishing the target TDC of our NEOs. For fiscal 2020, the CMDC increased Mr. Furner’s salary by 2.5% in light of his peer group positioning and his continuing strong performance. This base salary increase resulted in an approximately 0.6% increase in Mr. Furner’s target TDC. Upon his promotion to his current position in November 2019, the CMDC increased Mr. Furner’s salary by about 13% and his target equity by about 6%, resulting in an increase in Mr. Furner’s target TDC of about 8%. The CMDC approved these increases in light of Mr. Furner’s role as the head of our largest segment. The CMDC believes that Mr. Furner, as the head of our largest operating segment, has responsibilities comparable to many CEO positions within our peer group companies, and that it is likely that he would be recruited for a CEO position in the retail industry or elsewhere. When compared to both COO and CEO positions within our peer group, Mr. Furner’s target TDC is below the median. Mr. Furner received no special awards during fiscal 2020. |
Table of Contents Executive Compensation  | | | ○ | Walmart U.S. maintained disciplined inventory management. | | | ○ | Walmart U.S. continued its investments in associate opportunity. |
Fiscal 2017 Target TDC $9.9 million 49.15% Performance Share Units 10.14% Base Salary 16.38% Restricted Stock 24.33% Annual Cash Incentive 73.5% at risk
Fiscal 2017 Incentive Payouts
Annual cash incentive.Mr. Foran’s annual cash incentive is based on a combination of total company and Walmart U.S. performance described above on page 61.
| | | Performance | Payout | | | Performance Metric | Weighting | (% of Target) | (% of Target) | Fiscal 2017 Incentive Payout | | Total Company OI | 25% | 125.0% | | | | Walmart U.S. OI | 50% | 125.0% | 118.6% | $ 2,861,535 | | Walmart U.S. Sales | 25% | 99.4% | | |
Long-term incentive.Mr. Foran’s long-term performance share units are based on Walmart U.S. sales and total company ROI performance described above on page 62.
| | Fiscal 2017 | 3-Year Performance | | | Performance Metric | Weighting | (% of Target) | Number of PSUs Earned | | Walmart U.S. Sales | 50% | | | | | | 102.3% | 56,252 | | Total Company ROI | 50% | | |
Key Compensation Decisions for Fiscal 2017
For fiscal 2017, the CMDC increased Mr. Foran’s salary by 2.75% in light of his performance and peer group positioning. His annual incentive opportunity and annual equity grant were unchanged from fiscal 2016. The CMDC believes that Mr. Foran, as the head of our Walmart U.S. retail operations, has responsibilities comparable to many CEO positions within our peer group companies, and that it is likely that he would be recruited for a CEO position in the retail industry or elsewhere. When compared to CEO positions at our peer group companies, Mr. Foran’s compensation is below the median. In January 2016, the CMDC approved a grant of 15,760 shares of performance-based restricted stock to Mr. Foran. In order for one-half of these shares to vest, Walmart U.S. operating, selling, general and administrative expenses during fiscal 2017 were required to be no more than $67.54 billion after adjusting U.S. GAAP results as required by our incentive plans described above. The purpose of this award was to emphasize the importance of managing expenses in our largest operating segment, even as we continue to make critical strategic investments. This goal was achieved, and therefore 7,880 of these shares vested. The other half of these shares will be conditioned on a fiscal 2018 performance goal that is once again based on Walmart U.S. operating, selling, general and administrative expenses.
CD&A | 7: Fiscal 2017 NEO Pay and Performance Summaries•Walmart | 2017 Proxy Statement67
David Cheesewright– EVP, President and CEO, Walmart International
Fiscal 2017 Highlights
○ | Walmart International continued improvement across multiple markets, with 10 of 11 markets having positive comparable store sales in the 4th quarter. | | | ○ | Walmart International achieved significant constant currency operating income growth. | | | ○ | Walmart International continued its disciplined management of our global portfolio. | | | ○ | During fiscal 2017, we entered into a strategic alliance with JD.com to accelerate e-commerce growth in China. |
Fiscal 2017 Target TDC $10.2 million 47.90% Performance Share Units 10.63% Base Salary 15.97% Restricted Stock 25.51% Annual Cash Incentive 73.4% at risk
Fiscal 2017 Incentive Payouts
Annual cash incentive.Mr. Cheesewright’s annual cash incentive is based on a combination of total company and Walmart International performance described above on page 61. Mr. Cheesewright’s annual cash incentive is paid in Canadian dollars and is shown below using an exchange rate of 1 CAD = 0.7595 USD, which is an average exchange rate during fiscal 2017.
| | | Performance | Payout | | | Performance Metric | Weighting | (% of Target) | (% of Target) | Fiscal 2017 Incentive Payout | | Total Company OI | 25% | 125.0% | | | | | | | 125.0% | $3,245,272 | | Walmart International OI | 50% | 125.0% | | | | Walmart International Sales | 25% | 125.0% | | |
Long-term incentive.Mr. Cheesewright’s long-term performance share units are based on Walmart International sales and total company ROI performance described above on page 62.
| Performance Metric | Weighting | 3-Year Performance
(% of Target) | Number of PSUs Earned | | Walmart International Sales | 50% | | | | | | 108.0% | 65,324 | | Total Company ROI | 50% | | |
Key Compensation Decisions for Fiscal 2017
For fiscal 2017, the CMDC increased Mr. Cheesewright’s salary by 5.5%, and increased his annual equity award from $6 million to $6.5 million at target. These increases were made in light of his performance and peer group positioning. His annual incentive opportunity was unchanged from fiscal 2016. The CMDC believes that Mr. Cheesewright, as the head of our international retail operations, has responsibilities comparable to many CEO positions within our peer group companies, and that it is likely that he would be recruited for a CEO position in the retail industry or elsewhere. When compared to CEO positions at our peer group companies, Mr. Cheesewright’s compensation is below the median. Mr. Cheesewright received no special awards for fiscal 2017.
68 Walmart | 2017 Proxy Statement•CD&A | 7: Fiscal 2017 NEO Pay and Performance Summaries
Marc Lore– EVP, President and CEO, U.S. eCommerce
Fiscal 2017 Highlights
○ | Joined Walmart in September 2016 when we acquired Jet.com, Inc. | | | ○ | We experienced significant growth in e-commerce sales and gross merchandise value in the 4th quarter | | | ○ | We continued to expand our online assortment and introduced free two-day shipping on orders of $35 or more | | | ○ | We continued to pursue acquisitions of complimentary e-commerce retailers, resulting in several such acquisitions in late fiscal 2017 and early fiscal 2018 |
Fiscal 2017 Target TDC $9.4 million 47.87% Performance Share Units 10.64% Base Salary 15.96% Restricted Stock 25.53% Annual Cash Incentive 73.4% at risk
Fiscal 2017 Incentive Payouts
Annual cash incentive.Mr. Lore’s fiscal 2017 annual cash incentive was based on the total company operating and sales performance described above on page 61. His payout was prorated based on the portion of the fiscal year he was employed by Walmart.
| | | Performance | Payout | | | Performance Metric | Weighting | (% of Target) | (% of Target) | Fiscal 2017 Incentive Payout | | Total Company OI | 75% | 125.0% | | | | | | | 119.2% | $1,055,136 | | Total Company Sales | 25% | 101.8% | | |
Long-term incentive.Mr. Lore’s long-term performance share units are based on total company sales and total ROI performance described above on page 62. Because Mr. Lore joined our company in September 2016, he received his first annual equity grant in January 2017 and did not receive a long-term incentive payout for fiscal 2017.
Key Compensation Decisions for Fiscal 2017
When he joined our company, Mr. Lore’s compensation was benchmarked against comparable positions at technology companies and was intended to be in line with compensation for those roles. As discussed in the notes to the Summary Compensation table on page 74. Mr. Lore received an award of restricted stock units in connection with Walmart’s acquisition of Jet.com, Inc. Because these restricted stock units were part of the consideration paid to acquire Jet.com, the CMDC does not consider them part of Mr. Lore’s compensation package and did not consider this award when making decisions regarding Mr. Lore’s compensation.
CD&A | 7: Fiscal 2017 NEO Pay and Performance Summaries•Walmart | 2017 Proxy Statement69
| | 8 | Other Compensation Programs and Policies |
What perquisites and other benefits do our NEOs receive? Our NEOs receive a limited number of perquisites and supplemental benefits. We cover the cost of annual physical examinations for our NEOs and provide each NEO with personal use of our aircraft for a limited number of hours each year. Our NEOs also receive company-paid life and accidental death and dismemberment insurance. Additionally, our NEOs are entitled to benefits available to our officers generally, such as participation in the Deferred Compensation Matching Plan, and benefits available to associates generally, including a Walmart discount card, a limited 15 percent match of purchases of Shares through our Associate Stock Purchase Plan, participation in our 401(k) Plan, medical benefits, and foreign business travel insurance. We provide these perquisites and supplemental benefits to attract talented executives to our company and to retain our current executives, and we believe their limited cost is outweighed by the benefits to our company. What types of retirement and other benefits are our NEOs eligible to receive? Our NEOs are eligible for the same retirement benefits as our officers generally, such as participation in our Deferred Compensation Matching Plan. They may also take advantage of other benefits available more broadly to our associates, such as our 401(k) Plan. With the exception of Mr. Cheesewright,Ms. McKenna, who has an interestinterests in a pension planplans related to hisher prior employment with our U.K. subsidiary, our NEOs do not participate in any pension or other defined benefit retirement plan. Mr. CheesewrightMs. McKenna is not eligible to make any further contributions to this U.K. pension plan. What are our practices for granting equity awards?
Timing of Equity Awards.The CMDC meets each January to approve and grant annual equity awards to our Executive Officers, including our NEOs, for the upcoming fiscal year. Because of the timing of these meetings, these equity grants are reported in the executive compensation tables appearing in this proxy statement as granted during the most recently completed fiscal year. The CMDC meets again in February and/or March to establish the performance goals applicable to the performance share units and any other performance-based equity granted at the January meeting. Any special equity grants to Executive Officers during the year are approved by the CMDC at a meeting or by unanimous written consent. Option Exercise Prices.We have not granted stock options to our Executive Officers since 2007, and stock options are not currently a part of our executive compensation program. If and when we grant stock options in the future, the exercise price will be equal to the fair market value of our common stock on the date of grant. Does the CMDC take tax consequences into account when setting executive compensation? Yes. Section 162(m) of the Internal Revenue Code provides thatgenerally places a $1 million limit on the amount of compensation a company can deduct in excess of $1,000,000 paid toany one year for certain of our NEOs is generally not deductible by our company unless it is performance-based. Theexecutive officers. While the CMDC considers the deductibility of awards as one factor in determining executive compensation, the CMDC also looks at other factors in making its decisions and retains the flexibility to award compensation paidthat it determines to be consistent with the goals of our executive compensation program even if the awards are not deductible by Walmart for tax purposes.
Historically, our annual cash incentive opportunities and performance-based equity awards granted to our NEOs when designing and approving executive compensation. A significant portionExecutive officers were designed in a manner intended to be exempt from the deduction limitation of Section 162(m) because they were paid based on the compensation awardedachievement of pre-determined performance goals established by the CMDC pursuant to our NEOs is intended to satisfyshareholder-approved incentive plans. Additionally, the requirements for deductibility under Section 162(m). Additionally, early in fiscal 2017, the CMDC had adopted a policy requiring our “covered employees” subject to Section 162(m) to defer annual restricted stock grants until after they separate from employment from Walmart, subject to certain exceptions. However, | 64 | | www.walmart.com |
Table of Contents Executive Compensation Federal legislation signed into law on December 22, 2017, referred to maintain flexibilityas the Tax Cuts and Jobs Act (the “Tax Act”), repealed the exemption from Section 162(m)’s deduction limit for performance-based compensation, effective for taxable years beginning after December 31, 2017. In addition, the Tax Act expanded the group of covered employees under Section 162(m) to compensateinclude the chief financial officer and mandated that once an individual is treated as a covered employee for a given year, that individual will be treated as a covered employee for all subsequent years. Accordingly, any compensation paid to our covered Executive Officers in excess of $1 million in any one year, regardless of employment status, will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. Despite the CMDC’s efforts to structure incentive compensation in a manner designedintended to promote our long-term goalsbe exempt from Section 162(m) and objectives,therefore not subject to its deduction limits, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) as revised by the Tax Act, including the uncertain scope of the transition relief applicable to certain outstanding arrangements, no assurance can be given that compensation intended to satisfy the requirements for exemption from Section 162(m) will in fact be exempt. Further, the CMDC has not adopted a policyreserves the right to modify compensation that all compensation mustwas initially intended to be deductible or haveexempt from Section 162(m) if it determines that such modifications are consistent with the most favorable tax or accounting treatment available to our company. Rather, in certain circumstances, the CMDC may determine that it is in the best interestsobjectives of our company to award a particular form ofexecutive compensation even if our company may not be able to deduct all of that compensation under federal tax laws.program. Do we have employment agreements with our NEOs? We do not have employment agreements with any of our NEOs. Our NEOs and other Executive Officers are employed on an at-will basis. 70Walmart | 2017 Proxy Statement • CD&A | 8: Other Compensation Programs and Policies
Do we have severance agreements with our NEOs? We have entered into a non-competition agreement with each NEO. As described in more detail under “Potential Payments Upon Termination or Change in Control” on page 85, for each of our NEOs other than Mr. Lore,77, these agreements provide that, if we terminate the NEO’s employment for any reason other than his or her violation of company policy, we will generally make limited severance payments to the NEO. Under these agreements, each NEO other than Mr. Lore has agreed that for a period of time following his or her termination of employment, he or she will not participate in a business that competes with us and will not solicit our associates for employment. For purposes of these agreements, a competing business generally means any retail, wholesale, or merchandising business that sells products of the type sold by Walmart with annual revenues in excess of certain thresholds. In connection with our acquisition of Jet.com, Inc., we entered into a non-competition agreement with Mr. Lore under which he agreed that for a period of time from the closing date of the acquisition he will not participate in a business that competes with us and will not solicit our associates for employment. For purposes of this agreement, a competing business generally means a business engaged in e-commerce, selling goods, groceries, merchandise or services directly online or through an online marketplace.
These agreements reduce the risk that any of our former NEOs would use the skills and knowledge they gained while with us for the benefit of one of our competitors during a reasonable period of time after leaving our company, or, in the case of Mr. Lore, within a reasonable period of time after the acquisition of Jet.com, Inc.company. We do not have any contracts or other arrangements with our NEOs that provide for payments or other benefits upon a change in control of our company. Does our compensation program contain any provisions addressing the recovery or non-payment of compensation in the event of misconduct? Yes. Our MIP and our Stock Incentive Plan both provide that we will recoup awards to the extent required by Walmart policies. Furthermore, our MIP provides that, in order to be eligible to receive an incentive payment, the participant must have complied with our policies, including our Global Statement of Ethics, at all times. It further provides that if the CMDC determines, within twelve months following the payment of an incentive award, that prior to the payment of the award, a participant has violated any of our policies or otherwise committed acts detrimental to the best interests of our company, the participant must repay the incentive award upon demand. Similarly, our Stock Incentive Plan provides that if the CMDC determines that an associate has committed any act detrimental to the best interests of our company, he or she will forfeit all unexercised options and unvested equity awards. In addition, both the MIP and the Stock Incentive Plan provide that all awards under these plans, whether or not previously paid or deferred, will be subject to the company’s policies and applicable law regarding clawbacks in effect from time to time. Furthermore, we will publicly disclose the circumstances of any recoupment from any executive officer to the extent the underlying event has already been publicly disclosed, and the disclosure would not violate applicable law, violate legal privilege, breach contractual obligations or be likely to result in or exacerbate litigation, investigation, or proceedings against Walmart.
Table of Contents Executive Compensation Are our NEOs subject to any minimum requirements regarding ownership of our stock? Yes. Our senior officers have been subject to stock ownership guidelines since 2003. In June 2013, our Board enhanced the stock ownership guidelines applicable to our CEO and senior officers, as follows: ○● | ourOur CEO must maintain beneficial ownership of unrestricted Shares having a market value equal to seven times his current annual base salary; and | | ● | | ○ | ourOur other NEOs and certain other senior officers must maintain beneficial ownership of unrestricted Shares having a market value equal to five times his or her current annual base salary. |
The CEO and other senior officers must satisfy these stock ownership guidelines no later than the fifth anniversary of his or her appointment to a position covered by the stock ownership guidelines. If any covered officer is not in compliance with these stock ownership guidelines, he or she may not sell or otherwise dispose of more than 50 percent of any Shares that vest pursuant to any equity award until such time as he or she is in compliance with the guidelines and such sale would not cause the covered officer to cease to be in compliance with the guidelines. Further, as noted below, any pledged Shares would not be counted when determining whether the officer is in compliance with the guidelines. Currently, each of our NEOs is in compliance with our stock ownership guidelines. CD&A | 8: Other Compensation Programs and Policies • Walmart | 2017 Proxy Statement71
Are there any restrictions on an NEO’s ability to engage in transactions involving Walmart stock? Yes. Our Insider Trading Policy contains the following restrictions: ○● | Our directors and Executive Officers may trade in our stock only during open window periods, and then only after they have pre-cleared such transactions with our Office of the Corporate Secretary. | | | ○● | Our directors and Executive Officers may not enter into trading plans pursuant to SEC Rule 10b5-1 without having such plans pre-approved by our Corporate Secretary. | | | ○● | Our directors, and Executive Officers, and associates may not, at any time, engage in hedging transactions (such as swaps, puts and calls, collars, and similar financial instruments) that would eliminate or limit the risks and rewards of Walmart stock ownership. | | | ○● | Our directors and Executive Officers may not at any time engage in any short selling, buy or sell options, puts or calls, whether exchange-traded or otherwise, or engage in any other transaction in derivative securities that reflects speculation about the price of our stock or that may place their financial interests against the financial interests of our company. | | | ○● | Our directors and Executive Officers are prohibited from using Walmart stock as collateral for any margin loan. | | | ○● | Before using Walmart stock as collateral for any other borrowing, our directors and Executive Officers must satisfy the following requirements: |
| •● | The pledging arrangement must be pre-approved by Walmart’s Corporate Secretary; and | | | | | •● | Any Walmart Shares pledged will not be counted when determining whether the director or Executive Officer is in compliance with our stock ownership guidelines. |
Currently, none of our directors or Executive Officers has any pledging arrangements in place involving Walmart stock. Compensation Committee Report
| Compensation Committee Report |
The CMDC has reviewed and discussed with our company’s management the CD&A included in this proxy statement and, based on that review and discussion, the CMDC recommended to the Board that the CD&A be included in this proxy statement. The CMDC submits this report:
Carla A. Harris
Marissa A. Mayer
Steven S Reinemund,
Kevin Y. Systrom
Linda S. Wolf,Chair
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Table of Contents Risk Considerations in ourExecutive Compensation Program
| Risk Considerations in our Compensation Program |
The CMDC, pursuant to its charter, is responsible for reviewing and overseeing the compensation and benefits structure applicable to our associates generally, including any risks that may arise from our compensation program. We do not believe that our compensation policies and practices for our associates give rise to risks that are reasonably likely to have a material adverse effect on our company. In reaching this conclusion, we considered the following factors: ○● | Our compensation program is designed to provide a mix of both fixed and variable incentive compensation. | | | ○● | Our performance-based compensation is balanced between an annual incentive and a long-term incentive program. We believe this design mitigates any incentive for short-term risk-taking that could be detrimental to our company’s long-term best interests. | | | ○● | Our incentive compensation programs reward performance based on a mix of operating income-based metrics, sales-based metrics, and return on investment. We believe that this mix of performance metrics mitigates any incentive to seek to maximize performance under one metric to the detriment of performance under other metrics. For example, our long-term performance share plan is based equally on sales and ROI performance. We believe that this structure mitigates any incentive to pursue strategies that would increase our sales at the detriment of ROI performance. The CMDC regularly reviews the mix and weightings of the performance metrics used in our incentive compensation programs and has concluded that they are aligned with our strategy and provide appropriate incentives to encourage sustainable shareholder value creation. | | |
72 Walmart | 2017 Proxy Statement • CD&A | 8: Other Compensation Programs and Policies
○● | Maximum payouts under both our annual cash incentive plan and our performance share program are capped at 125% and 150% of target payouts, respectively. We believe that these limits mitigate excessive risk-taking, since the maximum amount that can be earned in a single cycle is limited. | | | ○● | A significant percentage of our management’s incentive compensation is based on the performance of our total company. This is designed to mitigate any incentive to pursue strategies that might maximize the performance of a single operating segment or area of responsibility to the detriment of our company as a whole. | | | ○● | Our senior executives are subject to robust stock ownership guidelines, which we believe motivate our executives to consider the long-term interests of our company and our shareholders and discourage excessive risk-taking that could negatively impact our stock price. | | | ○● | Our performance-based incentive compensation programs are designed with payout curves that are relatively smooth and do not contain steep payout “cliffs” that might encourage short-term business decisions in order to meet a payout threshold. | | | ○● | Our Executive Officers’ cash incentive payments are subject to reduction or elimination if compliance objectives are not satisfied. |
Finally, our cash incentive plan and our Stock Incentive Plan both contain robust “clawback” provisions under which awards may be recouped or forfeited if an associate has not complied with our policies, including our Global Statement of Ethics, or has committed acts detrimental to the best interests of our company. Compensation Committee Interlocks and Insider Participation
| Compensation Committee Interlocks and Insider Participation |
None of the directors who served on the CMDC or the predecessor committee at any time during fiscal 20172020 were officers or associates of Walmart or were former officers or associates of Walmart. Further, none of the members who served on the CMDC or the predecessor committee at any time during fiscal 20172020 had any relationship with our company requiring disclosure under the section of this proxy statement entitled “Related“Fiscal 2020 Review of Related Person Transactions.” Finally, no Executive Officer serves, or in the past fiscal year has served, as a director of, or as a member of the compensation committee (or other board committee performing equivalent functions) of, any entity that has one or more of its executive officers serving as a director of Walmart or as a member of the CMDC or the predecessor committee. CD&A | 8: Other Compensation Programs and Policies • Walmart | 2017 Proxy Statement73
Table of Contents Executive Compensation Tables
Name and
Principal Position
(a) | | Fiscal
Year ended
Jan. 31
(b) | | Salary
($)
(c) | | Bonus
($)
(d) | | Stock Awards
($)
(e) | | Non-Equity
Incentive Plan
Compensation
($)
(g) | | Change
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(h) | | All Other
Compensation
($)
(i) | | Total
($) | C. Douglas McMillon
President and CEO | | 2020 | | 1,276,892 | | 0 | | 15,709,953 | | 3,516,817 | | 1,191,597 | | 410,091 | | 22,105,350 | | 2019 | | 1,276,892 | | 0 | | 15,592,404 | | 5,088,000 | | 1,090,984 | | 569,953 | | 23,618,233 | | 2018 | | 1,276,982 | | 0 | | 15,692,464 | | 4,736,750 | | 611,315 | | 473,765 | | 22,791,276 | M. Brett Biggs
Executive Vice President
and CFO | | 2020 | | 915,358 | | 0 | | 5,752,910 | | 1,575,710 | | 292,100 | | 262,413 | | 8,798,491 | | 2019 | | 892,948 | | 0 | | 5,710,085 | | 2,223,926 | | 269,005 | | 324,450 | | 9,420,414 | | 2018 | | 871,087 | | 0 | | 4,237,993 | | 2,027,759 | | 140,199 | | 316,133 | | 7,593,171 | Suresh Kumar
Global Chief
Technology Officer | | 2020 | | 576,923 | | 515,100 | | 43,603,360 | | 1,181,665 | | 0 | | 21,603 | | 45,898,651 | Judith McKenna
Executive Vice President | | 2020 | | 1,066,214 | | 0 | | 7,323,601 | | 1,843,658 | | 1,682,061 | | 290,755 | | 12,206,289 | | 2019 | | 1,044,210 | | 0 | | 9,186,749 | | 2,267,949 | | 140,460 | | 282,956 | | 12,922,324 | Kathryn McLay
Executive Vice President | | 2020 | | 640,409 | | 0 | | 11,887,177 | | 960,741 | | 2,479 | | 17,901 | | 13,508,707 | John Furner
Executive Vice President | | 2020 | | 847,895 | | 0 | | 6,712,550 | | 1,855,198 | | 133,248 | | 325,933 | | 9,874,824 | | 2019 | | 799,425 | | 0 | | 6,275,780 | | 1,791,903 | | 92,800 | | 326,869 | | 9,286,777 | | 2018 | | 780,827 | | 0 | | 9,856,525 | | 1,665,728 | | 35,324 | | 538,384 | | 12,876,788 |
Summary Compensation
Name and Principal
Position
(a) | | Fiscal
Year
ended
Jan. 31
(b) | | Salary
($)
(c) | | Bonus
($)
(d) | | Stock
Awards
($)
(e) | | Non-Equity
Incentive
Plan
Compensation
($)
(g) | | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
(h) | | All Other
Compensation
($)
(i) | | Total
($) | | C. Douglas McMillon | | 2017 | | 1,278,989 | | 0 | | 15,224,706 | | 4,851,561 | | 510,155 | | 486,732 | | 22,352,143 | | President and CEO | | 2016 | | 1,263,231 | | 0 | | 14,270,786 | | 3,406,971 | | 404,755 | | 463,054 | | 19,808,797 | | | | 2015 | | 1,200,930 | | 0 | | 14,597,374 | | 2,878,272 | | 322,359 | | 393,673 | | 19,392,608 | | M. Brett Biggs | | 2017 | | 854,670 | | 0 | | 3,176,574 | | 2,026,251 | | 101,880 | | 249,785 | | 6,409,160 | | Executive Vice President | | 2016 | | 623,126 | | 0 | | 6,864,337 | | 924,965 | | 81,490 | | 119,140 | | 8,613,058 | | and CFO | | | | | | | | | | | | | | | | | | Gregory S. Foran | | 2017 | | 1,006,424 | | 0 | | 6,650,490 | | 2,861,535 | | 7,731 | | 1,027,673 | | 11,553,853 | | Executive Vice | | 2016 | | 976,334 | | 0 | | 7,035,147 | | 2,491,090 | | 5,929 | | 1,035,779 | | 11,544,279 | | President | | 2015 | | 846,910 | | 500,000 | | 15,781,823 | | 1,273,491 | | 4,084 | | 1,128,815 | | 19,535,123 | | David Cheesewright | | 2017 | | 1,071,743 | | 0 | | 6,501,522 | | 3,245,272 | | 771,184 | | 962,853 | | 12,552,574 | | Executive Vice | | 2016 | | 1,033,037 | | 500,939 | | 5,880,740 | | 2,470,649 | | 0 | | 286,240 | | 10,171,605 | | President | | 2015 | | 1,152,850 | | 551,852 | | 5,598,373 | | 2,503,814 | | 605,579 | | 252,586 | | 10,665,054 | | Marc Lore | | 2017 | | 346,154 | | 0 | | 242,449,136 | | 1,055,136 | | 0 | | 26,113 | | 243,876,539 | | Executive Vice | | | | | | | | | | | | | | | | | | President | | | | | | | | | | | | | | | | |
Explanation of information in the columns of the table: Name and Principal Position and Fiscal Year ended Jan. 31 (columns (a) and (b)) Mr. Biggs
Ms. McKenna was an NEO for the first time in fiscal 2016.2019. Accordingly, only information relating to hisher fiscal 20162019 and fiscal 20172020 compensation is included in the compensation tablesincluded. Mr. Kumar and related discussions of NEO compensation. Mr. Lore became an associate in September 2016 upon Walmart’s acquisition of Jet.com and was an NEOMs. McLay were NEOs for the first time in fiscal 2017; therefore,2020. Accordingly, only information relating to histheir fiscal 20172020 compensation is included in the compensation tables and related discussions of NEO compensation.included.
Salary (column (c))
Represents salaries earned during the fiscal years shown. Mr. Cheesewright’s salary is paid in Canadian dollars, and is reported here using an average exchange rate during fiscal 2017 of 1 CAD = 0.7595 USD, during fiscal 2016 of 1 CAD = 0.7730 USD, and during fiscal 2015 of 1 CAD = 0.8984 USD.McMillon, Mr. McMillonBiggs, Ms. McLay, and Mr. BiggsFurner elected to defer $130,000$135,000, $675,000, $12,420, and $247,000$40,500 of their fiscal 20172020 base salaries, respectively, under the Deferred Compensation Matching Plan.
Bonus (column (d))
Represents a sign-on bonus paid to Mr. Kumar at the time of his hire. Stock Awards (column (e)) The amount reported in this column for Mr. Lore includes 3,554,093 restricted stock units (“RSUs”), which were granted to Mr. Lore in connection with Walmart’s acquisition of Jet.com, Inc. Mr. Lore was the founder, largest shareholder, and CEO of Jet.com. These RSUs vest over a five-year period from the date of the closing of this acquisition, as described in more detail in the footnotes to the “Outstanding Equity Awards at Fiscal 2017 Year-End” table on page 79. In order for these RSUs to vest and be paid out, Mr. Lore generally must continue to be employed by Walmart through the various vesting dates. However, if Walmart terminates Mr. Lore’s employment without cause, or Mr. Lore resigns for good reason, any unvested RSUs will continue to vest in accordance with the vesting schedule. More information regarding amounts that may be owed to Mr. Lore in the event his employment terminates under these circumstances can be found in “Potential Payments Upon Termination or Change in Control” on page 85. Because these RSUs were part of the consideration paid by Walmart to acquire Jet.com, the CMDC does not view the RSUs as part of Mr. Lore’s compensation package, and did not consider them when establishing Mr. Lore’s total direct compensation for fiscal 2017 or fiscal 2018. Absent this grant of RSUs, Mr. Lore’s fiscal 2017 total compensation, as reported on the Summary Compensation table, would have been approximately $7.6 million.
The CMDC generally grants equity awards to our Executive Officers each January, just prior to the end of our fiscal year, that are intended as part of each Executive Officer’s compensation opportunity for the following year. Under the SEC’s rules, however, these awards are reported as compensation for the year in which the grant date falls. Accordingly, this column includes, for each NEO, an award of restricted stock (or, in the case of Mr. Cheesewright, restricted stock units) and performance-based restricted stock units approved by the CMDC on January 23, 2017.
74 Walmart | 2017 Proxy Statement • Executive Compensation Tables
In accordance with SEC rules, the amounts included in this column are the grant date fair value for awards granted in the fiscal years shown, computed in accordance with the stock-based compensation accounting rules that are a part of GAAP (as set forth in Financial Accounting Standards Board’s Accounting Standards Codification Topic 718), but excluding the effect of any estimated forfeitures of such awards. The values in this column reflect the full grant date fair value of all equity awards granted during the year, although the awards are subject to vesting periods based on continued employment. The number of performance-based restricted stock units that vest, if any, depends on whether we achieve certain levels of performance with respect to certain performance measures. The grant date fair values of the performance-based restricted stock units included in this column are based on payouts at target, which we have determined, in accordance with the stock-based compensation accounting rules, to be the probable levels of achievement of the performance goals related to those | 68 | | www.walmart.com |
Table of Contents Executive Compensation Tables awards. The table below shows the grant date fair value of the performance-based restricted stock units granted to each NEO during fiscal 2017,2020, assuming that: (i) our performance with respect to those performance measures will be at target levels (i.e., probable performance); and (ii) our performance with respect to those performance measures will be at levels that would result in a maximum payout. The grant date fair value of each performance-based restricted stock unit was determined based on the closing price of a Share on the NYSE on the grant date discounted for the expected dividend yield for such Shares during the vesting period: | Name | | Fiscal Year
of Grant | | Grant Date Fair Value
(Probable Performance)
($) | | Grant Date Fair Value
(Maximum Performance)
($) | | C. Douglas McMillon | | 2020 | | 11,867,488 | | 17,801,232 | | M. Brett Biggs | | 2020 | | 4,312,870 | | 6,469, 359 | | Suresh Kumar | | 2020 | | 33,703,348 | | 48,577,802 | | Judith McKenna | | 2020 | | 4,823,606 | | 7,235,463 | | Kathryn McLay | | 2020 | | 9,737,247 | | 14,605, 982 | | John Furner | | 2020 | | 5,112,594 | | 7,668,892 |
| Name | | Fiscal Year of Grant | | Grant Date Fair Value
(Probable Performance)
($) | | Grant Date Fair Value
(Maximum Performance)
($) | | C. Douglas McMillon | | 2017 | | 11,382,200 | | 17,073,299 | | M. Brett Biggs | | 2017 | | 2,426,562 | | 3,639,873 | | Gregory S. Foran | | 2017 | | 5,025,496 | | 7,538,274 | | David Cheesewright | | 2017 | | 5,025,496 | | 7,538,274 | | Marc Lore | | 2017 | | 4,626,339 | | 6,939,538 |
Option Awards (column (f))
We have omitted this column because we did not grant any option awards to NEOs during fiscal 2017,2020, and stock options are not currently part of our executive compensation program.
Non-Equity Incentive Plan Compensation (column (g))
These amounts represent annual cash incentive payments earned by our NEOs for performance during fiscal 2017,2020, fiscal 2016,2019, and fiscal 2015,2018, respectively, but paid to our NEOs during the following fiscal year. Mr. Cheesewright’s cash incentive is paid in Canadian dollars, and the fiscal 2017 amount is reported here using an average exchange rate during fiscal 2017 of 1 CAD = 0.7595 USD. Certain of our NEOs elected to defer a portion of their annual cash incentive payment for fiscal 2017,2020, as follows:
| Name | | Amount of Fiscal 20172020
Annual Cash
Incentive Deferred
($) | | C. Douglas McMillon | | 1,212,890879,204 | | M. Brett Biggs | | 1,418,376787,855 | | Judith McKenna | | 1,805,287 | | John Furner | | 1,444,678 |
Change in Pension Value and Nonqualified Deferred Compensation Earnings (column (h))
The amounts shown in this column represent above-market interest credited on deferred compensation under our company’s nonqualified deferred compensation plans, as calculated pursuant to Item 402(c)(2)(viii)(B) of SEC Regulation S-K. Mr. CheesewrightIn addition, Ms. McKenna participates in pension plans administered by Asda,ASDA Group Limited (“ASDA”), the company’s U.KU.K. subsidiary. During fiscal 2017,2020, the actuarial present value of Mr. Cheesewright’sMs. McKenna’s accumulated benefit in these plans increased by $771,184 (converting$1,471,555 (converted from British Pounds using an average exchange rate during fiscal 20172020 of 1 GBP = 1.34181.2783 USD). This increase in actuarial present value was primarily due to a change in the funding of one of these pension plans through the purchase by ASDA of a bulk annuity contract for the benefit of all participants. Ms. McKenna’s defined benefits under these pension plans did not change. These pension plans were closed to further accruals in 2011, but participants’ accrued pension balances are adjusted for inflation until they begin to receive distributions from the plan. See the Pension Benefits table on page 8173 for more information.
All Other Compensation (column (i))
“All other compensation” for fiscal 20172020 includes the following amounts:
| Name | | 401(k) Plan Matching
Contributions
($) | | Personal Use
of Company Aircraft
($) | | Company Contributions to
Deferred Compensation Plans
($) | | C. Douglas McMillon | | 16,800 | | 86,708 | | 301,805 | | M. Brett Biggs | | 16,800 | | 94,943 | | 145,996 | | Suresh Kumar | | 0 | | 19,966 | | 0 | | Judith McKenna | | 0 | | 114,849 | | 159,953 | | Kathryn McLay | | 0 | | 0 | | 12,420 | | John Furner | | 16,800 | | 135,724 | | 147,046 |
Table of Contents | Name | | 401(k) Plan Matching
Contributions
($) | | Personal Use
of Company Aircraft
($) | | Company Contributions to
Deferred Compensation Plans
($) | | C. Douglas McMillon | | 15,900 | | 80,477 | | 374,510 | | M. Brett Biggs | | 15,405 | | 71,303 | | 156,675 | | Gregory S. Foran | | 15,900 | | 72,791 | | 0 | | David Cheesewright | | 0 | | 225,624 | | 0 | | Marc Lore | | 0 | | 26,113 | | 0 |
Executive Compensation Tables• Walmart | 2017 Proxy Statement 75 The value shown for personal use of Walmart aircraft is the incremental cost to our company of such use, which is calculated based on the variable operating costs to our company per hour of operation, which include fuel costs, maintenance, and associated travel costs for the crew. Fixed costs that do not change based on usage, such as pilot salaries, depreciation, insurance, and rent, are not included. “All other compensation” for fiscal 20172020 also includes the following amounts: • | $34,149 in tax gross-ups for Mr. Foran, primarily related to Mr. Foran’s prior expatriate assignments and relocation benefits described above. | | | • | $878,950 in tax equalization for Mr. Foran related to his$10,856 in tax gross-ups and $10,933 in tax preparation services for Mr. Furner, and $11,046 in tax gross-ups for Ms. McKenna, primarily related to their prior expatriate assignments. These payments were made to ensure that Mr. Foran does not incur income taxes in both the U.S. and foreign jurisdictions on the same income. | | | • | $697,691 in tax gross-ups for Mr. Cheesewright, primarily related to Mr. Cheesewright’s use of corporate aircraft to travel from his residence in Canada to the company’s headquarters in Bentonville, Arkansas. | | | • | Payments to certain of our NEOs in fiscal 2017 related to the final calculation of the performance share units payout for the three-year period ending January 31, 2016. For Mr. Cheesewright, the amount of this payment was $34,958. For other NEOs, these payments are not individually quantified because each of them was less than the threshold set forth in Instruction 4 to Item 402(c)(2)(ix) of Regulation S-K. |
Certain of the amounts for Mr. Foran described above were paid in Chinese Yuan Renminbi (CNY) and have been reported here using an average exchange rate during fiscal 2017 of 1 CNY = 0.1500 USD.
The amounts in this column for fiscal 20172020 also include tax gross-up payments for certain of our other NEOs in amounts less than $10,000. The amounts in this column for fiscal 20172020 also include the cost of term life insurance premiums and physical examinations for certain of our NEOs and physical examinations for Mr. Biggs and Mr. Foran, certain relocation expenses for Mr. Foran related to his prior expatriate service, and the cost of tax preparation services for Mr. Foran and Mr. Cheesewright related to their prior expatriate service.NEOs. The values of these personal benefits are based on the incremental aggregate cost to our company and are not individually quantified because none of them individually exceed the threshold set forth in Instruction 4 to Item 402(c)(2)(ix) of Regulation S-K. | Fiscal 2020 Grants of Plan-Based Awards |
| | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards | |
Estimated Future Payouts Under
Equity Incentive Plan Awards | | All Other
Stock Awards:
Number of
Shares
of Stock
or Units
(#)
(i) | | Grant Date
Fair Value of
Stock and
Option Awards
($)
(l) | | Name | | Grant
Date | | Threshold
($)
(c) | | Target
($)
(d) | | Maximum
($)
(e) | | Threshold
(#)
(f) | | Target
(#)
(g) | | Maximum
(#)
(h) | | | | C. Douglas McMillon | | | | 1,144,800 | | 3,052,800 | | 3,816,000 | | | | | | | | | | | | 1/13/20 | | | | | | | | 54,140 | | 108,280 | | 162,420 | | | | 11,867,488 | | 1/13/20 | | | | | | | | | | | | | | 33,159 | | 3,842,465 | | M. Brett Biggs | | | | 527,761 | | 1,407,362 | | 1,759,202 | | | | | | | | | | | | 1/13/20 | | | | | | | | 19,676 | | 39,351 | | 59,027 | | | | 4,312,870 | | 1/13/20 | | | | | | | | | | | | | | 12,427 | | 1,440,041 | | Suresh Kumar | | | | 691,875 | | 1,845,000 | | 2,306,250 | | | | | | | | | | | | 7/9/19 | | | | | | | | 29,678 | | 59,355 | | 89,033 | | | | 6,329,024 | | 7/9/19 | | | | | | | | 38,537 | | 77,073 | | 115,610 | | | | 8,539,688 | | 7/9/19 | | | | | | | | 0 | | 35,436 | | 35,436 | | | | 3,954,658 | | 1/13/20 | | | | | | | | 28,909 | | 57,818 | | 86,727 | | | | 6,336,853 | | 1/13/20 | | | | | | | | 37,539 | | 75,078 | | 112,617 | | | | 8,543,126 | | 7/9/19 | | | | | | | | | | | | | | 43,852 | | 4,950,014 | | 12/10/19 | | | | | | | | | | | | | | 24,761 | | 2,950,026 | | 1/13/20 | | | | | | | | | | | | | | 17,259 | | 1,999,973 | | Judith McKenna | | | | 737,687 | | 1,967,166 | | 2,458,958 | | | | | | | | | | | | 1/13/20 | | | | | | | | 22,006 | | 44,011 | | 66,017 | | | | 4,823,606 | | 1/13/20 | | | | | | | | | | | | | | 21,574 | | 2,499,995 | | Kathryn McLay | | | | 526,500 | | 1,404,000 | | 1,755,000 | | | | | | | | | | | | 4/9/19 | | | | | | | | 4,053 | | 8,106 | | 12,159 | | | | 749,724 | | 1/13/20 | | | | | | | | 22,006 | | 44,011 | | 66,017 | | | | 4,823,606 | | 1/13/20 | | | | | | | | 18,297 | | 36,593 | | 54,890 | | | | 4,163,917 | | 4/9/19 | | | | | | | | | | | | | | 2,533 | | 249,982 | | 11/15/19 | | | | | | | | | | | | | | 3,365 | | 399,998 | | 1/13/20 | | | | | | | | | | | | | | 12,944 | | 1,499,951 | | John Furner | | | | 639,984 | | 1,706,625 | | 2,133,281 | | | | | | | | | | | | 1/13/20 | | | | | | | | 23,300 | | 46,600 | | 69,900 | | | | 5,107,360 | | 1/13/20 | | | | | | | | 23 | | 46 | | 69 | | | | 5,234 | | 1/13/20 | | | | | | | | | | | | | | 13,807 | | 1,599,955 |
| 70 | | www.walmart.com |
Table of Contents 76 Walmart | 2017 Proxy Statement • Executive Compensation Tables
Fiscal 2017 Grants of Plan-Based Awards
| | | | | | | | | | | | | | | | | All Other | | | | | | | | | | | | | | | | | | | | | Stock | | | | | | | | | | | | | | | | | | | | | Awards: | | | Grant Date | | | | | | Estimated Future Payouts Under | | Estimated Future Payouts Under | | Number of
Shares of
Stock or
Units
(#)
(i) | | | Fair Value of | | | | | | Non-Equity Incentive Plan Awards | | Equity Incentive Plan Awards | | | | Stock and
Option
Awards
($)
(l) | | | | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | | | | | | Grant | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | | | | Name | | Date | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | | | | C. Douglas McMillon | | | | 1,144,800 | | 3,052,800 | | 3,816,000 | | | | | | | | | | | | | | | | 1/23/17 | | | | | | | | 94,130 | | 188,260 | | 282,390 | | | | | | 11,382,200 | | | | 1/23/17 | | | | | | | | | | | | | | | 57,652 | (1) | | 3,842,506 | | M. Brett Biggs | | | | 490,078 | | 1,306,875 | | 1,633,594 | | | | | | | | | | | | | | | | 1/23/17 | | | | | | | | 20,068 | | 40,135 | | 60,203 | | | | | | 2,426,562 | | | | 1/23/17 | | | | | | | | | | | | | | | 11,253 | (1) | | 750,012 | | Gregory S. Foran | | | | 712,584 | | 1,900,224 | | 2,375,280 | | | | | | | | | | | | | | | | 1/23/17 | | | | | | | | 41,561 | | 83,121 | | 124,682 | | | | | | 5,025,496 | | | | 1/23/17 | | | | | | | | | | | | | | | 24,381 | (1) | | 1,624,994 | | David Cheesewright | | | | 766,695 | | 2,044,521 | | 2,555,652 | | | | | | | | | | | | | | | | 1/23/17 | | | | | | | | 41,561 | | 83,121 | | 124,682 | | | | | | 5,025,496 | | | | 1/23/17 | | | | | | | | | | | | | | | 24,381 | (2) | | 1,476,026 | | Marc Lore | | | | 675,000 | | 1,800,000 | | 2,250,000 | | | | | | | | | | | | | | | | 1/23/17 | | | | | | | | 38,260 | | 76,519 | | 114,779 | | | | | | 4,626,339 | | | | 1/23/17 | | | | | | | | | | | | | | | 22,506 | (1) | | 1,500,025 | | | | 9/19/16 | | | | | | | | | | | | | | | 3,554,093 | (3) | | 236,322,772 |
Explanation of information in the columns of the table: Estimated Future Payments Under Non-Equity Incentive Plan Awards (columns (c), (d) and (e))
The amounts in these columns represent the threshold, target, and maximum amounts of potential annual cash incentive payments that may be earned by our NEOs under the Management Incentive Plan for performance during fiscal 2018.2021. The performance measures and weightings applicable to these awards for each of our NEOs are as follows:
| Name | | Weighting | | | | C. Douglas McMillon | | 75% Total Company Operating Income | | 25% Total Company Sales | | M. Brett Biggs | | 75% Total Company Operating Income | | 25% Total Company Sales | Gregory S. ForanSuresh Kumar | | 75% Total Company Operating Income | | 25% Total Company Sales | | Judith McKenna | | 25% Total Company Operating Income | | 25% International Sales | | | 50% International Operating Income | | | Kathryn McLay | | 25% Total Company Operating Income | | 25% Sam’s Club Sales | | | 50% Sam’s Club Operating Income | | | John Furner | | 25% Total Company Operating Income | | 25% Walmart U.S. Sales | | | 50% Walmart U.S. Operating Income | | | David Cheesewright | | 25% Total Company Operating Income | | 25% Walmart International Sales | | | 50% Walmart International Operating Income | | | Marc Lore | | 75% Total Company Operating Income | | 25% Total Company Sales |
The CD&A provides additional information regarding our annual cash incentive plan. The amounts for Mr. Cheesewright are payable in Canadian dollars and are reported in these columns using an exchange rate of 1 CAD = 0.7595 USD, which is an average exchange rate during fiscal 2017. Executive Compensation Tables • Walmart | 2017 Proxy Statement77
Estimated Future Payouts Under Equity Incentive Plan Awards (columns (f), (g), and (h))
The amounts in these columns represent the threshold, target, and maximum number of Shares that may vest with respect to performance-based restricted stock units granted during fiscal 2017.2020. Holders of performance-based restricted stock units do not earn dividends or enjoy other rights of shareholders until such performance-based restricted stock units have vested. All performance-based restricted stock units granted to our NEOs in fiscal 2017 are scheduled to vest on January 31, 2020, with the number of units vesting based on performance during fiscal 2018.
The CD&A provides additional information regarding our performance equity program and the related performance measures. For these grants made in fiscal 20172020 related to performance in fiscal 2018,2021, the applicable performance measures are: (i) return on investment; and (ii) sales growth of our company or one of its operating segments, depending on each NEO’s primary area of responsibility. Each NEO’s performance measure weighting for fiscal 20182021 is as follows: | Name | | Weighting | | | | C. Douglas McMillon | | 50% Total Company Return on Investment | | 50% Total Company Sales | | M. Brett Biggs | | 50% Total Company Return on Investment | | 50% Total Company Sales | Gregory S. ForanSuresh Kumar | | 50% Total Company Return on Investment | | 50% Walmart U.S.Total Company Sales | David CheesewrightJudith McKenna | | 50% Total Company Return on Investment | | 50% Walmart International Sales | Marc LoreKathryn McLay | | 50% Total Company Return on Investment | | 50% Sam’s Club Sales | | John Furner | | 50% Total Company Return on Investment | | 50% Walmart U.S. Sales |
All Other Stock Awards: Number of Shares of Stock or Units (column (i))
The amounts in this column represent Shares of restricted stock and restricted stock units granted during fiscal 2017.2020. Restricted stock and restricted stock units vest based on the continued service of the NEO as an associate through the vesting date. Amounts marked with a (1) are Shares of restricted stock scheduled to vest on January 21, 2020, and amounts marked with a (2) are restricted stock units scheduled to vest on January 21, 2020. The amount marked with a (3) represents restricted stock units granted to Mr. Lore in connection with Walmart’s acquisition of Jet.com, Inc., as described above in the footnotes to the Summary Compensation table. These restricted stock units are scheduled to vest in installments through September 28, 2021, as follows: (1) 10% on the first anniversary of the closing of Walmart’s acquisition of Jet.com, Inc.; (2) 1.25% per month for the 12 months between the first and second anniversaries of the closing; (3) 1.67% per month for the 12 months between the second and third anniversaries of the closing; (4) 2.08% per month for the 12 months between the third and fourth anniversaries of the closing; and (5) 2.5% per month for the 12 months between the fourth and fifth anniversaries of the closing. In order for these restricted stock units to vest and be paid out, Mr. Lore generally must continue to be employed by Walmart through the various vesting dates. However, if Walmart terminates Mr. Lore’s employment without cause, or Mr. Lore resigns for good reason, any unvested restricted stock units will continue to vest in accordance with the vesting schedule described above.
All Other Option Awards: Number of Securities Underlying Options and Exercise or Base Price of Option Awards (columns (j) and (k))
These columns are omitted because options are not currently part of our executive compensation program and Walmart did not grant options to NEOs during fiscal 2017.2020.
Grant Date Fair Value of Stock and Option Awards (column (l))
Fair values of equity awards are computed in accordance with the stock-based compensation accounting rules, and exclude the effect of any estimated forfeitures. The grant date fair values of restricted stock is calculated based on the closing stock price of a Share on the NYSE as of the grant date, and performance-based restricted stock units are based on the probable outcome of those awards on the date of grant. The fair values of performance-based restricted stock units and restricted stock units are discounted for the expected dividend yield during the vesting period. The grant date fair value of the equity awards awarded on January 23, 201713, 2020 was determined based on a per-Shareper-share amount of $66.65,$115.88, which was the closing price of a Share on the NYSE on that date. Performance-based restricted stock units granted on January 23, 201713, 2020 with a vesting period ending January 31, 2023 were valued using a discounted per-share value of $109.60. Grants of performance-based restricted stock units on April 9, 2019 with a vesting date of January 31, 2022 were reported using a discounted per-share value of $92.49. Grants of performance-based restricted stock units on July 9, 2019 with a vesting period ending January 31, 2020 were valuedreported using a discounted per-Shareper-share value of $60.46. Restricted$110.80. Grants of performance-based restricted stock units granted on January 23, 2017July 9, 2019 with a vesting date ofperiod ending January 21, 202031, 2021 were valuedreported using a discounted per-Shareper-share value of $60.54. Restricted$112.40. Grants of performance-based restricted stock on July 9, 2019 with a vesting period ending January 31, 2022 were reported using a discounted per-share value of $106.63. Grants of performance-based restricted stock units granted on September 19, 2016January 13, 2020 with a vesting period ending January 31, 2021 were valued atreported using a weighted fairdiscounted per-share value of $66.49/Share.$113.79.
Table of Contents 78 Walmart | 2017 Proxy Statement • Executive Compensation Tables
| Outstanding Equity Awards at Fiscal 2020 Year-End |
| | Stock Awards | | Name | | Number of Shares
or Units of Stock
That Have Not
Vested
(#)
(g) | | Market Value of
Shares or Units of
Stock That Have
Not Vested
($)
(h) | | Equity Incentive Plan
Awards: Number of
Unearned Shares, Units or
Other Rights That Have
Not Vested
(#)
(i) | | Equity Incentive Plan
Awards: Market or Payout
Value of Unearned Shares,
Units or Other Rights That
Have Not Vested
($)
(j) | | C. Douglas McMillon | | 420,359 | | 48,126,902 | | 162,420 | | 18,595,466 | | M. Brett Biggs | | 134,148 | | 15,358,605 | | 59,027 | | 6,758,001 | | Suresh Kumar | | 102,250 | | 11,706,603 | | 217,062 | | 24,851,428 | | Judith McKenna | | 181,464 | | 20,775,813 | | 66,017 | | 7,558,286 | | Kathryn McLay | | 44,678 | | 5,115,184 | | 120,907 | | 13,842,642 | | John Furner | | 183,221 | | 20,976,972 | | 69,969 | | 8,010,751 |
Outstanding Equity Awards at Fiscal 2017 Year-End
| | | Stock Awards | | | | | | | | Equity Incentive Plan Awards: | | Equity Incentive Plan Awards: | | | | | | | | Number of Unearned Shares, | | Market or Payout Value of | | Number of Shares or Units of | | Market Value of Shares or Units of | | Units or Other Rights That Have | | Unearned Shares, Units or Other | | Stock That Have Not Vested | | Stock That Have Not Vested | | Not Vested | | Rights That Have Not Vested | | | | (#) | | ($) | | (#) | | ($) | | Name | | (g) | | (h) | | (i) | | (j) | | C. Douglas McMillon | 161,565 | | 10,782,848 | | 705,173 | | 47,063,246 | | M. Brett Biggs | | 38,429 | | 2,564,751 | | 155,494 | | 10,377,670 | | Gregory S. Foran | | 76,790 | | 5,124,965 | | 311,252 | | 20,772,958 | | David Cheesewright | | 66,916 | | 4,465,974 | | 304,522 | | 20,323,798 | | Marc Lore | | 3,576,599 | | 238,702,217 | | 114,779 | | 7,660,350 |
Explanation of information in the columns of the table: Option Awards (columns (b) through (f))
We have omitted these columns because none of our NEOs held any options to purchase Shares or other Walmart securities as of the end of fiscal 2017.2020.
Number of Shares or Units of Stock that Have Not Vested (column (g))
The amounts in this column represent Shares of restricted stock and restricted stock units with service-based vesting requirements, (restrictedincluding performance-based restricted stock units are identified with an asterisk infor which the table below),performance conditions have been satisfied, scheduled to vest in amounts and on the dates shown in the following table:
| Vesting Date | | C. Douglas McMillon | | M. Brett Biggs | | Gregory S. Foran | | David Cheesewright | | Marc Lore | | February 7, 2017 | | — | | 9,003 | | — | | — | | — | | April 4, 2017 | | — | | 3,256 | | 2,605* | | — | | — | | August 22, 2017 | | — | | — | | 3,404* | | — | | — | | January 26, 2018 | | 43,354 | | — | | 18,335 | | 16,924* | | — | | February 15, 2018 | | — | | — | | 2,454* | | — | | — | | March 13, 2018 | | — | | 3,097 | | — | | — | | — | | January 25, 2019 | | 60,559 | | 11,820 | | 25,611 | | 25,611* | | — | | January 21, 2020 | | 57,652 | | 11,253 | | 24,381 | | 24,381* | | 22,506 |
In addition, the amount for Mr. Lore shown in this column includes 3,554,093 restricted stock units granted to Mr. Lore on September 19, 2016 in connection with Walmart’s acquisition of Jet.com, Inc., as described above in the footnotes to the Summary Compensation table. These restricted stock units are scheduled to vest in installments through September 28, 2021, as follows: (1) 10% on the first anniversary of the closing of Walmart’s acquisition of Jet.com, Inc.; (2) 1.25% per month for the 12 months between the first and second anniversaries of the closing; (3) 1.67% per month for the 12 months between the second and third anniversaries of the closing; (4) 2.08% per month for the 12 months between the third and fourth anniversaries of the closing; and (5) 2.5% per month for the 12 months between the fourth and fifth anniversaries of the closing. In order for these restricted stock units to vest and be paid out, Mr. Lore generally must continue to be employed by Walmart through the various vesting dates. However, if Walmart terminates Mr. Lore’s employment without cause, or Mr. Lore resigns for good reason, any unvested restricted stock units will continue to vest in accordance with the vesting schedule described above.
Executive Compensation Tables • Walmart | 2017 Proxy Statement79
| Vesting Date | | C. Douglas McMillon | | M. Brett Biggs | | Suresh Kumar | | Judith McKenna | | Kathryn McLay | | John Furner | | March 17, 2020 | | — | | — | | — | | 6,844 | | 2,737 | | — | | November 10, 2020 | | — | | — | | — | | — | | 1,682 | | — | | January 19, 2021 | | 35,075 | | 9,694 | | — | | 4,315 | | — | | 13,692 | | January 31, 2021 | | 171,806 | | 46,047 | | — | | 80,617 | | 11,127 | | 69,831 | | March 16, 2021 | | — | | — | | — | | — | | 2,318 | | — | | November 9, 2021 | | — | | — | | — | | — | | 1,683 | | — | | January 18, 2022 | | 39,589 | | 14,836 | | 17,718 | | 19,769 | | — | | 15,454 | | January 31, 2022 | | 140,730 | | 51,144 | | 67,273 | | 56,975 | | 9,654 | | 70,437 | | March 15, 2022 | | — | | — | | — | | — | | 2,533 | | — | | January 17, 2023 | | 33,159 | | 12,427 | | 17,259 | | 12,944 | | 12,944 | | 13,807 |
Market Value of Shares or Units of Stock That Have Not Vested (column (h))
This column shows the market value of the Shares of restricted stock and restricted stock units in column (g), based on the closing price of a Share on the NYSE on the last trading day of fiscal 20172020 ($66.74114.49 on January 31, 2017)2020).
Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (column (i))
The amounts in this column represent performance share units and performance-based restricted stock units held by our NEOs, the vesting of which is subject to our company meeting certain performance goals as described in the CD&A and in the notes to the Summary Compensation and Fiscal 20172020 Grants of Plan-Based Awards tables. The amounts in this column assume that performance share units and performance-based restricted stock units will vest at maximum levels. The maximum number of Shares scheduledAll awards in this column are subject to vestperformance conditions for each of the NEOs onfiscal 2021, and are subject to further service-based vesting requirements through January 31, 2018, 2019, and 2020 if maximum level performance goals are met are as follows:
| | | Scheduled to Vest | | Scheduled to Vest | | Scheduled to Vest | | Name | | 1/31/2018 | | 1/31/2019 | | 1/31/2020 | | C. Douglas McMillon | | 164,855 | | 257,928 | | 282,390 | | M. Brett Biggs | | 44,947 | | 50,344 | | 60,203 | | Gregory S. Foran | | 69,888 | | 108,802 | | 124,682 | | David Cheesewright | | 67,665 | | 112,175 | | 124,682 | | Marc Lore | | — | | — | | 114,779 |
This column also includes 7,880 Shares of2023 except for the following: (i) 130,335 performance-based restricted stock units held by Mr. Foran scheduled to vest onKumar vesting January 31, 2018. The2021 and 17,718 performance-based restricted stock units held by Mr. Kumar vesting January 31, 2022; (ii) 54,890 performance-based restricted stock units held by Ms. McLay vesting January 31, 2021; and (iii) 69 performance-based restricted stock units held by Mr. Furner vesting January 31, 2021.
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Table of these Shares is contingent on satisfying a performance goal as described in the CD&A.Contents Executive Compensation Tables Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (column (j)) This column shows the market value of the performance share units in column (i), assuming payouts at maximum levels and based on the closing price of a Share on the NYSE on the last trading day of fiscal 20172020 ($66.74114.49 on January 31, 2017)2020). | Fiscal 2020 Option Exercises and Stock Vested |
| Stock Awards | | Name | Number of Shares
Acquired on Vesting
(#)
(d) | Value Realized
on Vesting
($)
(e) | | C. Douglas McMillon | 288,195 | 33,504,377 | | M. Brett Biggs | 60,402 | 7,023,435 | | Suresh Kumar | 155,968 | 17,923,535 | | Judith McKenna | 79,048 | 8,923,271 | | Kathryn McLay | 12,300 | 1,405,644 | | John Furner | 122,613 | 14,180,913 |
Fiscal 2017 Option Exercises and Stock Vested
| | | Option Awards | | Stock Awards | | | | Number of | | | | Number of | | Value | | | | Shares | | | | Shares | | Realized on | | | | Acquired | | Value Realized | | Acquired on Vesting | | Vesting | | | | on Exercise | | on Exercise | | (#) | | ($) | | Name | | (#)(b) | | ($)(c) | | (d) | | (e) | | C. Douglas McMillon | | 75,063 | | 1,585,113 | | 195,819 | | 13,523,556 | | M. Brett Biggs | | — | | — | | 44,405 | | 3,079,447 | | Gregory S. Foran | | — | | — | | 81,763 | | 5,713,945 | | David Cheesewright | | — | | — | | 85,480 | | 5,906,932 | | Marc Lore | | — | | — | | — | | — |
Explanation of information in the columns of the table: Option Awards (columns (b) and (c))
We have omitted these columns because none of our NEOs exercised any options to purchase Walmart securities during fiscal 2020. Value Realized on Exercise (column (c))
This amount equals the difference between the market price of a Share on the NYSE on the exercise date and the option exercise price, multiplied by the number of Shares acquired upon exercise.
Number of Shares Acquired on Vesting (column (d)) 12,937 of the shares shown for Mr. Foran represent the vesting of cash-settled awards.
The receipt of certain of the sharesShares shown in this column was deferred until a future date, as shown on the table below:
| Name | Shares Deferred
(#) | | C. Douglas McMillon | 82,19155,746 | | M. Brett Biggs | 37,12247,090 | Gregory S. ForanJudith McKenna | 16,88918,510 | | John Furner | 4,351 |
Value Realized on Vesting (column (e))
The values in this column equal the number of Shares vested multiplied by the fair market value of a Share, as defined in the Stock Incentive Plan, on the various vesting dates.
80 Walmart | 2017 Proxy Statement • Executive Compensation Tables
Pension Benefits
| | | | | Number of Years
Credited Service | | Present Value of
Accumulated Benefit | | | Payments During
Last Fiscal Year | | Name | | Plan Name | | (#) | | ($) | (1) | | ($) | | David Cheesewright | | Asda Group Pension Scheme | | 11.5 | | 2,301,204 | | | 0 | | | | Asda Unfunded Unapproved Retirement Benefit Scheme | | 11.1 | | 2,388,422 | | | 0 |
| Name | Plan Name | Number of Years
Credited Service
(#) | Present Value of
Accumulated Benefit
($)(1) | Payments During
Last Fiscal Year
($) | | Judith McKenna | ASDA Group
Pension Scheme | 14.7 | 3,055,063 | 0 | | ASDA Unfunded
Unapproved Retirement
Benefit Scheme | 11.1 | 1,648,967 | 0 |
| (1) | These amounts were valued in Great British Pounds (GBP)(“GBP”) and have been reported here using an average currency exchange rate during fiscal 20172020 of 1 GBP = 1.34181.2783 USD. |
Table of Contents Executive Compensation Tables In connection with hisher former employment with AsdaASDA Group Limited, (“Asda”), Walmart’sthe company’s wholly-owned subsidiary that operates in the United Kingdom subsidiary, Mr. Cheesewright(“ASDA”), Ms. McKenna is a participant in the AsdaASDA Group Pension Scheme, the pension plan for colleagues of Asda.ASDA. The plan provides for an annual pension, payable for life, based on the participant’s years of participation in the plan and salary at the date of retirement from Asda.ASDA. Pension benefits are generally payable beginning at age 60, but a participant may receive payments beginning at age 55, subject to a reduction in the pension amount. Both before and after payment commences, the pension amount increases in line with inflation, subject to an annual limitation. On death, either before or after payment commences, the plan provides for payment of spouse’s and dependents’ pensions. Mr. Cheesewright’sMs. McKenna’s balance in this plan was partially funded by hisher own contributions to the plan and partially funded by Asda.ASDA. The AsdaASDA Group Pension Scheme was frozen to new accruals in February 2011. Also in connection with hisher former employment with Asda, Mr. CheesewrightASDA, Ms. McKenna participates in the AsdaASDA Unfunded Unapproved Retirement Benefits Scheme, a non-tax qualified pension plan which commenced in January 2000 and was open to AsdaASDA colleagues with salary in excess of the salary cap that applied in the AsdaASDA Group Pension Scheme. The AsdaASDA Unfunded Unapproved Retirement Benefits Scheme provides benefits using the same accrual formula as the AsdaASDA Group Pension Scheme, but benefits are limited according to a salary cap based on seniority. Mr. CheesewrightMs. McKenna did not contribute to this plan, and hisher plan balance will be funded by Asda.ASDA. The AsdaASDA Unfunded Unapproved Retirement Benefits Scheme was frozen to new accruals in February 2011. The table above reflects the present value of benefits accrued by Mr. CheesewrightMs. McKenna from the AsdaASDA Group Pension Scheme and the AsdaASDA Unfunded Unapproved Retirement Benefits Scheme. The amounts were computed in accordance with U.S. GAAP using the following assumptions: (i)assuming a retirement age of 60 (the earliest age at which Mr. CheesewrightMs. McKenna could retire without any benefit reduction due to age); (ii). For the ASDA Unfunded Unapproved Retirement Benefits Scheme a discount rate of 2.7%2.1% per year;year and (iii) an assumed inflation rate 3.4%2.9% per year.year have been assumed. The value of Ms. McKenna’s benefits in the ASDA Group Pension Scheme has increased to reflect the estimated cost of providing her benefits via a bulk annuity contract purchased by ASDA for the benefit of the ASDA Group Pension Scheme participants. Executive Compensation Tables • Walmart | 2017 Proxy Statement81
| Fiscal 2020 Nonqualified Deferred Compensation |
| Name | Executive
Contributions
in Last FY
($)
(b) | Company
Contributions
in Last FY
($)
(c) | Aggregate
Earnings
in Last FY
($)
(d) | Aggregate
Withdrawals/
Distributions
($)
(e) | Aggregate
Balance
at Last FYE
($)
(f) | | C. Douglas McMillon | 7,422,764 | 301,805 | 3,537,760 | 0 | 123,047,342 | | M. Brett Biggs | 6,952,607 | 145,996 | 837,634 | 4,402,387 | 30,469,190 | | Suresh Kumar | 0 | 0 | 0 | 0 | 0 | | Judith McKenna | 3,750,485 | 159,953 | 420,106 | 0 | 12,041,973 | | Kathryn McLay | 12,420 | 12,420 | 4,630 | 0 | 112,748 | | John Furner | 1,918,799 | 147,046 | 264,302 | 0 | 7,651,875 |
Fiscal 2017 Nonqualified Deferred Compensation
| Name | | Executive
Contributions
in Last FY
($)
(b) | | Company
Contributions
in Last FY
($)
(c) | | Aggregate
Earnings in
Last FY
($)
(d) | | Aggregate
Withdrawals/
Distributions
($)
(e) | | Aggregate
Balance
at Last FYE
($)
(f) | | C. Douglas McMillon | | 6,941,167 | | 374,510 | | 2,481,699 | | 0 | | 73,413,096 | | M. Brett Biggs | | 4,249,739 | | 156,675 | | 335,057 | | 219,088 | | 11,791,886 | | Gregory S. Foran | | 1,181,632 | | 0 | | 88,662 | | 0 | | 3,225,313 | | David Cheesewright | | 0 | | 0 | | 0 | | 0 | | 0 | | Marc Lore | | 0 | | 0 | | 0 | | 0 | | 0 |
Explanation of information in the columns of the table: Executive Contributions in Last FY (column (b))
These amounts represent salary, cash incentive payments, and/or the value of equity awards that vested during fiscal 20172020 but the receipt of which was deferred. This includes amounts earned during fiscal 20172020 but credited to NEOs’ deferred compensation accounts after the end of fiscal 2017.2020. Salary and cash incentive payments deferred are included in the Summary Compensation table under “Salary” and “Non-Equity Incentive Plan Compensation,” respectively, for fiscal 2017.2020. Deferrals of equity awards were deferred upon vesting pursuant to an election made in a prior year by the NEO or pursuant
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Table of Contents Executive Compensation Tables to the terms of the awards, and deferred equity is valued using the closing Share price on the NYSE on the deferral date. The following table shows the deferred portion of each NEO’s salary, cash incentive payments, and equity awards that vested in fiscal 2017,2020, and the form of deferral: | Name | NameContributions | | Contributions | | Form of Deferral | | Amount($Amount
($) | | C. Douglas McMillon | | Salary | | Cash | | 130,000135,000 | | | | Cash Incentive | | Cash | | 1,212,890879,204 | | | | Equity | | Share Units | | 5,590,9006,408,560 | | M. Brett Biggs | | | Equity | Salary | Cash | | 7,377675,000 | | M. Brett Biggs | | Salary | | Cash | | 247,000 | | | | Cash Incentive | | Cash | | 1,418,376787,855 | | | | Equity | | Share Units | | 2,583,5655,489,752 | | | | Equity | | Cash | | 798 | | Gregory S. Foran | | Salary | | Cash | | 0 | | | Judith McKenna | Cash Incentive | | Cash | | 01,805,287 | | | | Equity | | Share Units | 1,945,198 | | Kathryn McLay | 1,181,632Salary | Cash | 12,420 | | John Furner | Salary | Cash | 40,500 | | Cash Incentive | Cash | 1,444,678 | | Equity | Share Units | 433,621 |
Company Contributions in Last FY (column (c))
The amounts in this column represent participation incentive contributions under the ODCP and matching contributions to the DCMP, as shown in the table below. See “Walmart’s Deferred Compensation Plans” on page 8476 for more information on company contributions under these plans.
| | Name | | ODCP Participation
Incentive
($) | | DCMP Matching
Contributions
($) | | | C. Douglas McMillon | | 22,996 | | 351,514 | | | M. Brett Biggs | | 0 | | 156,675 |
82Walmart | 2017 Proxy Statement • Executive Compensation Tables
| Name | ODCP Participation
Incentive
($) | DCMP Matching
Contributions
($) | | C. Douglas McMillon | 28,341 | 273,464 | | M. Brett Biggs | 11,478 | 134,518 | | Judith McKenna | 0 | 159,953 | | Kathryn McLay | 0 | 12,420 | | John Furner | 0 | 147,046 |
Aggregate Earnings in Last FY (column (d))
The amounts in this column represent all interest on ODCP and DCMP account balances, SERP earnings, and dividend equivalents and interest earned on dividend equivalents in equity deferral accounts under the Stock Incentive Plan during fiscal 2017,2020, as shown in the table below. The “above market”“above-market” portion of this interest and earnings is included in the fiscal 20172020 amounts in the Summary Compensation table under “Change in Pension Value and Nonqualified Deferred Compensation Earnings.”
| Name | ODCP
Interest
($) | DCMP
Interest
($) | SERP
Interest
($) | Dividend
Equivalents and
Interest
($) | | C. Douglas McMillon | 1,161,301 | 655,470 | 62,718 | 1,658,271 | | M. Brett Biggs | 187,132 | 319,844 | 11,159 | 319,499 | | Judith McKenna | 0 | 392,548 | 0 | 27,558 | | Kathryn McLay | 0 | 4,630 | 0 | 0 | | John Furner | 36,586 | 206,690 | 3,022 | 18,004 |
Table of Contents | | Name | | ODCP Interest
($) | | DCMP
Interest
($) | | SERP Interest
($) | | Dividend Equivalents and
Interest
($) | | | C. Douglas McMillon | | 919,328 | | 288,704 | | 49,838 | | 1,223,829 | | | M. Brett Biggs | | 145,564 | | 112,734 | | 8,868 | | 67,891 | | | Gregory S. Foran | | 0 | | 15,674 | | 0 | | 72,988 |
Executive Compensation Tables Aggregate Withdrawals/Distributions (column (e))
The amountsamount in this column represent the value offor Mr. Biggs includes 25,942 Shares of previously deferred restricted stockupon the vesting of equity awards granted in prior periods that were distributed during fiscal 2017. The amount reported2020, as well as $174,837 in this column represents the fair market value of the Shares on thecash compensation earned in prior fiscal years and voluntarily deferred until specific distribution date, plus dividend equivalents and interest on such dividend equivalents.dates in fiscal 2020.
Aggregate Balance at Last FYE (column (f))
The aggregate balance for each NEO includes certain amounts included in the Summary Compensation table in prior fiscal years, as shown in the following table. The deferred equity amounts included in the table below are valued using the closing Share price on the NYSE on the last trading day of fiscal 2017,2020, with the exception of deferred performance share units with a performance period ending January 31, 20172020 which are valued using the fair market value of a Share, as defined in the Stock Incentive Plan, on March 10, 2017, the date such performance shares were credited to the NEOs’ deferral accounts.
| | Name | | Amount Previously Reported on
Summary Compensation Table
($) | | Fiscal Years
When Reported | | | C. Douglas McMillon | | 39,204,859 | | 2009-2016 | | | M. Brett Biggs | | 543,972 | | 2016 | | | Gregory S. Foran | | 633,298 | | 2015-2016 |
Executive Compensation Tables • Walmart | 2017 Proxy Statement83January 31, 2020 ($114.49/share).
| Name | Amount Previously Reported on
Summary Compensation Table
($) | Fiscal Years
When Reported | | C. Douglas McMillon | 73,859,139 | 2009-2019 | | M. Brett Biggs | 21,049,308 | 2016-2019 | | Judith McKenna | 2,363,006 | 2018-2019 | | John Furner | 2,405,785 | 2018-2019 |
| Walmart’s Deferred Compensation Plans |
Walmart’s Deferred Compensation Plans
Under the Deferred Compensation Matching Plan, which took effect on February 1, 2012, officers may elect to defer base salary and cash incentive amounts until separation of employment or until a specified payment date. Interest accrues on amounts deferred at an interest rate set annually based on the ten-year Treasury note yield on the first business day of January plus 2.70%. For fiscal 2017,2020, the interest rate was 4.94%5.36%. In addition, our company allocates to each participant’s Deferred Compensation Matching Plan account a matching contribution of up to 6% of the amount by which the participant’s base salary and cash incentive payment exceed the then-applicable limitation in Section 401(a)(17) of the Internal Revenue Code. A participant is required to be employed on the last day of the fiscal year to receive a matching contribution for that year. A participant will become vested in the matching contribution credited to his or her account once the participant has participated in the Deferred Compensation Matching Plan for three plan years after his or her initial deferral. The Deferred Compensation Matching Plan replaced the Officer Deferred Compensation Plan. Participants may no longer elect to defer amounts into the Officer Deferred Compensation Plan. However, participants’ Officer Deferred Compensation Plan account balances will continue to earn interest at the same rate as Deferred Compensation Matching Plan balances until distribution. Additionally, participants who made contributions to the Officer Deferred Compensation Plan in prior years continue to earn incentive contributions to their Officer Deferred Compensation Plan accounts, as follows: ○● | In the tenth year of continuous employment beginning with the year the participant first made a deferral under the Officer Deferred Compensation Plan, our company credits the deferral account with an increment equal to 20% of the sum of the principal amount of base salary and cash incentive payments deferred (taking into account a maximum amount equal to 20% of base salary) plus accrued interest on such amounts (the “20% Increment”) in each of the first six years of the participant’s deferrals. | | ● | | ○ | In the eleventh and subsequent years of continuous employment, the 20% Increment is credited based on the recognized amount deferred five years earlier, plus earnings thereon. | | ● | | ○ | In addition, in the fifteenth year of continuous employment beginning with the year the participant first made a deferral under the Officer Deferred Compensation Plan, our company credits the deferral account with an amount equal to 10% of the principal amount of base salary and cash incentive payments deferred (taking into account a maximum amount equal to 20% of base salary) plus accrued interest on such amount (the “10% Increment”) in each of the first six years of the participant’s deferrals. | | ● | | ○ | In the sixteenth and subsequent years of continuous employment, the 10% Increment is credited based on the amount deferred 10 years earlier, plus earnings thereon. |
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Table of Contents Executive Compensation Tables Only contributions to the Officer Deferred Compensation Plan are taken into account for purposes of calculating the 20% Increment and 10% Increment; contributions to the Deferred Compensation Matching Plan are not considered. The SERP was designed to supplement the historic profit sharing portioncomponent of the Walmart 401(k) Plan by providing mirror contributions to participants’ accounts in excess of applicable compensation limits set by the Internal Revenue Service. Because the Walmart 401(k) Plan was amended in 2011 to eliminate the profit sharing component, the SERP was frozen to new contributions as of January 31, 2013. The matching contribution component of the Deferred Compensation Matching Plan is intendedHowever, SERP balances continue to replace the company contribution previously made to participants under the SERP. earn interest. Finally, officers may also elect to defer the receipt of equity awards granted under the Stock Incentive Plan until a specified payout date or until after separation from employment with Walmart. Any deferrals of vested Shares or Share units are credited with dividend equivalents until the payout date, and these dividend equivalents earn interest at the same rate as amounts deferred under the Deferred Compensation Matching Plan. 84Walmart | 2017 Proxy Statement • Executive Compensation Tables
| Potential Payments Upon Termination or Change in Control |
Potential Payments Upon Termination or Change in Control
Most of our company’s plans and programs, including our deferred compensation plans and the terms of our equity awards, contain provisions specifying the consequences of a termination of employment. These provisions are described below. Our company does not have any employment agreements with its NEOs. Furthermore, our plans and programs do not have any provisions under which our NEOs would be entitled to payments, accelerated equity vestings, or any other benefits upon a change in control of our company. Non-competition agreements.Our company has entered into a non-competition agreement with each of our NEOs. For eachEach of our NEOs other than Mr. Lore, these agreements provideprovides that the NEO is prohibited from participating in a business that competes with our company and from soliciting our company’s associates for employment for a specified period of time after his or her employment with Walmart terminates. For purposes of these agreements, a “competing business” includes any retail, wholesale, or merchandising business that sells products of the type sold by our company, is located in a country in which our company has retail operations or in which the NEO knows our company expects to have retail operations in the near future, and has annual retail sales revenue above certain thresholds. Except for Mr. Cheesewright, eachEach agreement also provides that, if Walmart terminates an NEO’s employment for any reason other than his or her violation of Walmart policy, our company will generally pay the NEO an amount equal to two times the NEO’s base salary over a two-year period. In the case of Mr. Cheesewright, the company would be obligated to pay him an amount equal to one year base salary, plus payments equal to his average annual incentive payment under the MIP over the immediately preceding three fiscal years, as well as the cost of health and dental care for one year. The non-competition agreement with Mr. Lore provides that, for a period of five years from Walmart’s acquisition of Jet.com, Mr. Lore will not participate in any e-commerce business, including brick and mortar retailers with e-commerce operations, and will not solicit for employment or hire Walmart’s associates.
In the event of a breach of the restrictive covenants contained in the agreement, the NEO would no longer have a right to receive additional payments, and the company would have a right to recoup any payments previously made. Using each NEO’s base salary as of January 31, 2017,2020, the maximum total payments by our company to each continuing NEO under such termination circumstances would be as follows: | C. Douglas McMillon | | $ | 2,544,000 | | M. Brett Biggs | | $ | 1,700,000 | | Gregory S. Foran | | $ | 2,010,818 | | David Cheesewright | | $ | 2,893,537* |
| * | converted from Canadian dollars to US dollars using an exchange rate of 1 CAD = 0.7595 USD, which is an average exchange rate during fiscal 2017. |
| C. Douglas McMillon | | $ | 2,544,000 | | M. Brett Biggs | | $ | 1,830,715 | | Suresh Kumar | | $ | 2,000,000 | | Judith McKenna | | $ | 2,132,428 | | Kathryn McLay | | $ | 1,560,000 | | John Furner | | $ | 1,850,000 |
Equity awards.Certain equity awards granted under our Stock Incentive planPlan held by our NEOs provide for accelerated vesting in the event employment is terminated under certain circumstances: ○● | Restricted stock and restricted stock units.stock.Under the terms of most of ourthe outstanding equity awards, in the event of the death of an NEO after his or her tenth year of service with our company, all unvested restricted stock and restricted stock units held by such NEO granted during the prior three years would generally vest. In addition, certain restricted stock awards held by our NEOs, provide that any Sharesrestricted stock awards that would have vested within 90 daystwelve months of his or her termination of employment due to death or disability would immediately vest. Upon termination of employment for any other reason, unvested restricted stock and restricted stock units dodoes not vest and areis forfeited. | | |
Table of Contents Executive Compensation Tables• Walmart | 2017 Proxy Statement85 The following table shows the value of all unvested restricted stock that would have vested upon the death or disability of certain of our NEOs on January 31, 2020 (based on the closing price of a Share on the NYSE on the last trading day of the fiscal year ($114.49)): | | | | Upon Death
($) | | Upon Disability
($) | | C. Douglas McMillon | | 4,015,737 | | 4,015,737 | | M. Brett Biggs | | 1,109,866 | | 1,109,866 | | Judith McKenna | | 1,277,594 | | 1,277,594 | | Kathryn McLay | | 505,931 | | 505,931 | | John Furner | | 1,567,597 | | 1,567,597 |
| ● | Performance-based Restricted Stock Units.Under the terms of the outstanding equity awards held by our NEOs, any performance-based restricted stock units that would have vested within twelve months of his or her termination of employment due to death or disability would immediately vest. Upon termination of employment for any other reason, unvested performance-based restricted stock units do not vest and are forfeited. |
The following table shows the value of all unvested performance-based restricted stock units that would have vested upon the death or disability of certain of our NEOs on January 31, 20172020 (based on the closing price of a Share on the NYSE on the last trading day of the fiscal year ($66.74 on January 31, 2017)114.49)): | | | | Upon Death
($) | | Upon
Disability
($) | | | C. Douglas McMillon | | 6,935,154 | | 0 | | | M. Brett Biggs | | 1,607,032 | | 818,166 | | | Gregory S. Foran | | 173,858 | | 173,858 | | | David Cheesewright | | 1,709,278 | | 0 |
In addition, as described above in the footnotes to the Summary Compensation table, Mr. Lore was granted 3,554,093 restricted stock units in connection with Walmart’s acquisition of Jet.com. These RSUs vest over a five-year period from the date of the closing of this acquisition, as described in more detail in the footnotes to the “Outstanding Equity Awards at Fiscal 2017 Year-End” table on page 79. In order for these RSUs to vest and be paid out, Mr. Lore generally must continue to be employed by Walmart through the various vesting dates. However, if Walmart terminates Mr. Lore’s employment without cause, or Mr. Lore resigns for good reason, any unvested RSUs will continue to vest in accordance with the vesting schedule. If Walmart were to have terminated Mr. Lore without cause or Mr. Lore were to have resigned for good reason effective January 31, 2017, the value of these restricted stock units would have been $237,200,167 (based on the closing price of a Share on the NYSE on the last trading day of the fiscal year ($66.74 on January 31, 2017)).
○ | Performance share units.Certain performance share units held by our NEOs provide that in the event of the NEO’s death after 10 years of service with our company, his or her performance share units would vest in an amount equal to the number that would have vested at the end of the applicable performance cycle. Additionally, certain performance share unit awards provide that if an NEO’s employment terminates by reason of disability or by reason of death prior to completing 10 years of service with our company, a prorated portion of his or her performance share units would vest, based upon the number of full calendar months during the applicable performance cycle during which the NEO was employed. Upon termination of employment for any other reason, unvested performance share units generally do not vest and are forfeited. The following table shows the estimated value of all performance share units that would have vested upon an NEO’s death or disability on January 31, 2017 (based on the closing price of a Share on the NYSE on the last trading day of the fiscal year ($66.74 on January 31, 2017) and assuming that target performance goals are achieved for each grant of performance share units): |
| | | | Upon Death
($) | | Upon
Disability
($) | | | C. Douglas McMillon | | 20,805,594 | | 9,817,184 | | | M. Brett Biggs | | 4,113,320 | | 1,951,257 | | | Gregory S. Foran | | 4,151,711 | | 4,151,711 | | | David Cheesewright | | 8,516,358 | | 3,962,519 |
| | | | Upon Death
($) | | Upon Disability
($) | | C. Douglas McMillon | | 19,670,069 | | 19,670,069 | | M. Brett Biggs | | 5,271,921 | | 5,271,921 | | Suresh Kumar | | 10,624,214 | | 10,624,214 | | Judith McKenna | | 7,524,283 | | 7,524,283 | | Kathryn McLay | | 5,463,463 | | 5,463,463 | | John Furner | | 8,000,218 | | 8,000,218 |
The CMDC has discretion to accelerate the vesting of any equity awards and to make other payments or grant other benefits upon a retirement or other severance from our company. Cash Merger Consideration.Deferred Compensation Matching Contribution.As described under “Fiscal 2017 Review of Related Person Transactions”Walmart makes a limited matching contribution on page 39, as part of the consideration for Walmart’s acquisition of Jet.com in September 2016, Walmart is obligated to pay Mr. Lore approximately $397 million over a five-year period subsequentparticipant contributions to the closing date of the acquisition. In order to be entitled to these payments, Mr. Lore generally must continue to be employed by Walmart through the various payment dates. However, if Walmart terminates Mr. Lore’s employment without cause, or Mr. Lore resigns for good reason, Mr. Lore would continue to be entitled to the remaining payments in accordance with the payment schedule.
Deferred Compensation Plans.Finally, certain of our NEOs also participate in our deferred compensation plans, the terms of which areMatching Plan, as described above under “Walmart’s Deferred Compensation Plans.” Upon termination of employment, our NEOs would generally be entitled to the balances in their deferred compensation accounts as disclosedThis company-matching contribution becomes vested once an officer has participated in the Fiscal 2017 Nonqualified Deferred Compensation table above.Matching Plan for three years. Any unvested company-matching contribution would immediately vest in the event that a participant dies or becomes disabled before the completion of the vesting period. The Officer Deferred Compensation Planprovides for a prorated 10% increment or 20% increment to be paid upon separation from service in certain circumstances if age and service-based requirements are met. As of January 31, 2020, Mr. Furner had a prorated company-matching contribution in the amount of $27,102 that would immediately vest if his death or disability were to occur prior to his separation from service. | 78 | | www.walmart.com |
Table of Contents 86Walmart | 2017 Proxy Statement • Executive Compensation Tables
Equity Compensation Plan Information
The following table provides certain information asIn accordance with SEC rules, we are providing the ratio of the endannual total compensation of fiscal 2017our CEO to the annual total compensation of our median associate, which is a reasonable estimate calculated in a manner consistent with respectSEC rules and is based on our payroll and employment records and the methodology described below. In calculating this estimated ratio, SEC rules allow companies to Sharesadopt a variety of methodologies, apply different exclusions, and make reasonable estimates and assumptions reflecting their unique employee populations. As discussed on pages 48-49 above, our company is unique because we are significantly larger than most of our peer group companies in terms of revenue, market capitalization, and the size and scope of our worldwide employee population. Therefore, our reported pay ratio may not be comparable to that may be issued underreported by other companies due to differences in industries, scope of international operations, business models, and scale, as well as the different estimates, assumptions, and methodologies applied by other companies in calculating their respective pay ratios.
Considered Population.As of December 31, 2019, we employed approximately 2,234,894 associates worldwide, other than our company’s existing equity compensation plans. | Plan category | | (a) Number of securities to be
issued upon exercise of outstanding
options, warrants and rights | | | (b) Weighted average exercise
price of outstanding options,
warrants and rights ($) | | | (c) Number of securities
remaining available for future
issuance under equity
compensation plans (excluding
securities reflected in column (a)) | | | Equity compensation plans approved by security holders | | 37,424,074 | (1) | | 57.87 | (2) | | 254,503,761 | (3) | | Equity compensation plans not approved by security holders | | 3,554,093 | (4) | | — | | | — | | | TOTAL | | 40,978,167 | | | 57.87 | (2) | | 254,503,761 | |
(1) | In addition to options to purchase Shares, this amount includes 9,654,681 Shares that may be issued upon the vesting of performance shares granted under the Stock Incentive Plan, which represents the maximum number of Shares that may be issued upon the vesting of these performance shares if maximum performance goals are achieved for each performance cycle, and 20,723,166 Shares that may be issued upon the vesting of restricted stock units granted under the Stock Incentive Plan. This amount also includes 1,872,862 Shares deferred in the form of Shares by officers and Outside Directors. This amount also includes 4,880,080 Shares available under equity compensation plans in which associates of ASDA participate. | (2) | Represents the weighted average exercise price of options to purchase 293,285 Shares and the rights to acquire 4,880,080 Shares that may be issued under the equity compensation plans for ASDA associates described in footnote (1) above. This weighted average does not take into account Shares that may be issued upon the vesting of other forms of equity described in footnote (1) above. | (3) | This amount includes 124,099,181 shares available under the 2016 Associate Stock Purchase Plan. | (4) | This amount includes 3,554,093 restricted stock units issued to Marc Lore, an Executive Officer of Walmart, as part of Walmart’s acquisition of Jet.com, Inc. For additional information about the restricted stock units issued to Mr. Lore, see the footnotes to the Summary Compensation table beginning on page 74. | | |
Executive Compensation Tables • Walmart | 2017 Proxy Statement87
Stock Ownership
HoldingsCEO. As permitted by SEC rules, in order to determine our median associate, we excluded approximately 3.5% of Major Shareholders
The following table lists the beneficial owners of greater than 5%our total associate population or approximately 78,976 associates outside of the Shares outstandingU.S. from the following countries: Argentina (9,558); Bangladesh (86); Botswana (888); Costa Rica (15,134); El Salvador (4,904); France (1); Ghana (215); Guatemala (10,507); Honduras (3,641); Hong Kong (23); India (27,558); Indonesia (9); Ireland (106); Israel (40); Kenya (190); Lesotho (178); Luxembourg (2); Malawi (133); Morocco (2); Mozambique (481); Namibia (306); The Netherlands (1); Nicaragua (3,751); Nigeria (341); Pakistan (16); Peru (8); Singapore (1); Spain (18); Swaziland (66); Tanzania (61); Thailand (5); Turkey (69); Uganda (90); Vietnam (24); and Zambia (563). Therefore, an aggregate associate population of approximately 2,155,918 was considered (the “considered population”) in determining our median associate.
Identifying our Median Associate.In determining our median associate, we used calendar year 2019 gross earnings – meaning total amounts paid before deductions or adjustments, including wages, overtime, bonuses, and the value of any equity awards that vested and were paid to an associate during calendar year 2019. Adjustments were made to annualize the gross earnings of all newly hired permanent associates in the considered population who did not work for the entire calendar year 2019. From the considered population, we then used statistical sampling to identify a group of associates who were paid within a range of 0.5% above or below what we estimated to be our median gross earnings amount (the “median population”). We then reviewed recent historical taxable wage data of the median population, and for those associates within the median population with stable wages, we calculated each of their fiscal 2020 total compensation in the same way as we calculated our CEO’s fiscal 2020 total compensation as set forth in the Summary Compensation table on page 68 and identified the median compensated associate from this group. Based upon the estimates, assumptions, and methodology described above, the fiscal 2020 annual total compensation of April 7, 2017. Asour CEO was $22,105,350, the fiscal 2020 annual total compensation of April 7, 2017, there were 3,031,556,234 Shares outstanding. | | | | | | Shared Voting and Investment Power | | | | | | | | | | | | | | | | | | | Other Indirect | | | | | | | | | | Direct or Indirect | | | | | | Shared, Indirect | | | Ownership | | | | | | | | | | Ownership with | | | Shared, Indirect | | | Ownership | | | with Shared | | | | | | | | Name and | | Sole Voting | | | Ownership | | | Through the Walton | | | Voting and | | | | | | | | Address of | | and Investment | | | Through Walton | | | Family Holdings | | | Investment | | | | | | Percent of | | Beneficial Owner(1) | | Power | | | Enterprises, LLC | (1) | | Trust | (1) | | Power | | | | Total | | Class | | Alice L. Walton | | 6,748,580 | | | 1,415,891,131 | (3) | | 131,205,978 | (4) | | 1,587,988 | (5)(6)(7) | | | 1,555,433,677 | | 51.31% | | Jim C. Walton | | 10,507,224 | (2) | | 1,415,891,131 | (3) | | 131,205,978 | (4) | | 1,360,148 | (6)(7) | | | 1,558,964,481 | | 51.42% | | John T. Walton Estate | | 0 | | | 1,415,891,131 | (3) | | 0 | | | 0 | | | | 1,415,891,131 | | 46.71% | | Trust | | | | | | | | | | | | | | | | | | | S. Robson Walton | | 3,342,758 | | | 1,415,891,131 | (3) | | 131,205,978 | (4) | | 83,052 | (8) | | | 1,550,522,919 | | 51.15% |
our median associate was $22,484, and the ratio of these amounts was 983:1. (1) | The business address of Alice L. Walton, Jim C. Walton, the John T. Walton Estate Trust, S. Robson Walton, Walton Enterprises, LLC, and the Walton Family Holdings Trust is P.O. Box 1508, Bentonville, Arkansas, 72712. | | | (2) | Jim C. Walton has pledged 4,251,488 of the Shares directly owned by him as security for a line of credit extended to a company not affiliated with Walmart. This pledge complies with Walmart’s lnsider Trading Policy as described on page 72. | | | (3) | Walton Enterprises, LLC holds a total of 1,415,891,131 Shares. Alice L. Walton, Jim C. Walton, and S. Robson Walton share voting and dispositive power with respect to all Shares held by Walton Enterprises, LLC, individually as managing members of Walton Enterprises, LLC, and in their capacities as cotrustees of the John T. Walton Estate Trust, which is also a managing member of Walton Enterprises, LLC. The managing members of Walton Enterprises, LLC have the power to sell and vote those Shares. | | | (4) | The Walton Family Holdings Trust holds a total of 131,205,978 Shares. Alice L. Walton, Jim C. Walton, and S. Robson Walton, as cotrustees, share voting and dispositive power. | | | (5) | This number includes Shares held by various trusts and corporations organized and operated for charitable purposes as to which Alice L. Walton shares voting and dispositive power. | | | (6) | The number includes 2,174 Shares held by a trust as to which Jim C. Walton, Alice L. Walton, and an entity under her control, as cotrustees, share voting and dispositive power. | | | (7) | This number includes 1,357,974 Shares held by a partnership as to which Jim C. Walton, as a trustee of a certain trust that is a general partner thereof, shares voting and dispositive power with Alice L. Walton, as a trustee of certain trusts that are general partners thereof, and with certain of their nieces and nephews, the other general partners thereof. | | | (8) | This number includes Shares held by various trusts in which S. Robson Walton, as cotrustee thereof, shares voting and dispositive power. | | 2020 Proxy Statement 79 |
88Table of ContentsWalmart | 2017 Proxy Statement • Stock Ownership
HoldingsPROPOSAL NO. 3
Ratification of Officers and DirectorsIndependent Accountants
This table shows the number of Shares held by each director, director nominee, and NEO on April 7, 2017. It also shows the Shares held by all of Walmart’s directors, the director nominee, and Executive Officers as a group on that date. As of April 7, 2017, there were 3,031,556,234 Shares outstanding.
| | | Direct or Indirect | | | | | | | | | | with Sole Voting | | Indirect with | | | | | | | | and Investment | | Shared Voting and | | | | Percent of | | Name of Beneficial Owner | | Power(1) | | Investment Power | | Total | | Class | | M. Brett Biggs | | 107,785 | | 0 | | 107,785 | | * | | James I. Cash, Jr. | | 36,115 | | 0 | | 36,115 | | * | | David Cheesewright | | 204,168 | | 0 | | 204,168 | | * | | Pamela J. Craig | | 8,597 | | 0 | | 8,597 | | * | | Timothy P. Flynn | | 33,184 | | 0 | | 33,184 | | * | | Gregory S. Foran | | 170,996 | | 0 | | 170,996 | | * | | Carla A. Harris | | 0 | | 0 | | 0 | | * | | Thomas W. Horton | | 5,980 | | 0 | | 5,980 | | * | | Marc E. Lore | | 3,576,599 | | 0 | | 3,576,599 | | * | | Marissa A. Mayer | | 19,165 | | 0 | | 19,165 | | * | | C. Douglas McMillon(2) | | 941,391 | | 158,263 | | 1,099,654 | | * | | Gregory B. Penner | | 43,397 | | 1,388,194 | | 1,431,591 | | * | | Steven S Reinemund | | 19,624 | | 0 | | 19,624 | | * | | Kevin Y. Systrom | | 10,208 | | 0 | | 10,208 | | * | | S. Robson Walton(3) | | 3,342,758 | | 1,547,180,161 | | 1,550,522,919 | | 51.15% | | Steuart L. Walton | | 239,694 | | 0 | | 239,694 | | * | | Linda S. Wolf | | 38,963 | | 2,675 | | 41,638 | | * | | Directors, Director Nominee, and Executive Officers as a Group (22 persons) | | 9,057,102 | | 1,548,729,293 | | 1,557,786,395 | | 51.39% |
* | Less than 1% | | | (1) | These amounts include Shares of unvested restricted stock and restricted stock units held by certain Executive Officers and stock units deferred by certain Outside Directors and certain Executive Officers. For Gregory S. Foran, this amount includes 5,828 restricted stock units and 14,100 deferred stock units that settle in the form of cash upon vesting or payout. These amounts also include Shares that the following persons had a right to acquire within 60 days after April 7, 2017, through the exercise of stock options and vested Shares they hold in the 401(k) Plan: |
| | | Shares held in theWhat am I voting on?
| Name | | 401(k) Plan | C. Douglas McMillon | | 1,669 | Directors, Director Nominee, and Executive Officers as a Group (22 persons) | | 4,801 |
(2) | C. Douglas McMillon also holds 1,900 American Depository Receipts of Wal-Mart de Mexico, S.A.B. de C.V. and 1,200 American Depository Receipts of Massmart Holdings Ltd. Another Executive Officer whoAlthough shareholder ratification is not an NEO also owns 544 American Depository Receiptsrequired, we are asking shareholders to ratify the appointment of Wal-Mart de Mexico, S.A.B. de C.V. These holdings represent less than 1%EY as the company’s independent accountants for fiscal 2021 at the 2020 Annual Shareholders’ Meeting because the Board believes it is a good corporate governance practice. The Audit Committee will take shareholders’ opinions regarding EY’s appointment into consideration in future deliberations. If EY’s selection is not ratified at the 2020 Annual Shareholders’ Meeting, the Audit Committee will consider the engagement of each classother independent accountants. Even if EY’s selection is ratified, the Audit Committee may terminate EY’s engagement as the company’s independent accountants without the approval of security. | | | (3) | The amount shown for S. Robson Walton includes 1,415,891,131 Shares held by Walton Enterprises, LLC and 131,205,978 held by the Walton Family Holdings Trust. | | company’s shareholders whenever the Audit Committee deems termination appropriate. |
Stock Ownership • Walmart | 2017 Proxy Statement 89
| Engagement of Independent Accountants |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Walmart’s directors, Executive Officers, and persons who own more than 10% of the outstanding Shares to file reports of Share ownership and changes in Share ownership with the SEC. SEC regulations require Walmart to identify anyone who failed to file a required report or filed a late report during fiscal 2017. Walmart believes that all Section 16(a) filing requirements were timely met during fiscal 2017 except that, due to an administrative oversight, the withholding of Shares to pay taxes due upon the vesting of previously reported restricted stock or restricted stock units granted to certain Executive Officers were reported a few days late. As a result, Daniel J. Bartlett, David Cheesewright, Jeffrey J. Gearhart, and C. Douglas McMillon were each late in filing one report relating to one tax withholding transaction, and Neil M. Ashe and Rosalind G. Brewer were each late in filing two reports, each relating to a tax withholding transaction.
90Walmart | 2017 Proxy Statement • Stock Ownership
Proposal No. 4
Ratification of Independent Accountants
Although shareholder ratification is not required, we are asking shareholders to ratify the appointment of EY as the company’s independent accountants for fiscal 2018 at the 2017 Annual Shareholders’ Meeting because the Board believes it is a good corporate governance practice. The Audit Committee will take shareholders’ opinions regarding EY’s appointment into consideration in future deliberations. If EY’s selection is not ratified at the 2017 Annual Shareholders’ Meeting, the Audit Committee will consider the engagement of other independent accountants. The Audit Committee may terminate EY’s engagement as the company’s independent accountants without the approval of the company’s shareholders whenever the Audit Committee deems termination appropriate.
The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of the independent accountants. The Audit Committee has appointed EY as the company’s independent accountants to audit the consolidated financial statements of the company for fiscal 2018.2021. EY and(including its predecessor, Arthur Young & Company, have beenpredecessors) has served as Walmart’s independent accountants since 1969, prior to the company’s initial offering of securities to the public in 1970.public. EY served as the company’s independent accountants for fiscal 20172020 and reported on the company’s consolidated financial statements for that fiscal year. The Audit Committee annually reviews EY’s independence and performance in determining whether to retain EY or engage another independent registered public accounting firm as our company’s independent accountants. As part of that annual review, the Audit Committee considers, among other things, the following: ○● | The quality and efficiency of the current and historical services provided to our company by EY, including the results of an annual internal survey of key global financial management; | | | ○● | EY’s capability and expertise in handling the breadth and complexity of our company’s global operations; | | | ○● | The quality and candor of EY’s communications with the Audit Committee; | | | ○● | External data on EY’s audit quality and performance, including recent Public Company Accounting Oversight BoardPCAOB reports on EY; | | | ○● | EY’s independence from our company; | | | ○● | The appropriateness of EY’s fees; and | | | ○● | EY’s tenure as our company’s independent accountants, including the benefits of having a long-tenured auditor. |
| 80 | | www.walmart.com |
Table of Contents Proposal No. 3 Ratification of Independent Accountants | Benefits of Long Tenure | | Independence Controls | Higher audit quality –Through more than 4550 years of experience with our company, EY has gained institutional knowledge of and deep expertise regarding Walmart’s global operations and businesses, accounting policies and practices, and internal control over financial reporting. Efficient fee structure –EY’s aggregate fees are competitive with peer companies because of EY’s familiarity with our company.
| | Audit Committee oversight –The Audit Committee’s oversight includes regular private sessions with EY, discussions with EY regarding the scope of its audit, an annual evaluation when determining whether to engage EY, and direct involvement by the Audit Committee and its Chair in the periodic transition to a new lead engagement partner in connection with the mandatory five-year rotation of that position. | | Efficient fee structure –EY’s aggregate fees are competitive with peer companies because of EY’s familiarity with our company. | | Limits on non-audit services–The Audit Committee pre-approves audit and permissible non-audit services to be performed by EY in accordance with its pre-approval policy. | | | |
Proposal No. 4: Ratification of Independent Accountants • Walmart | 2017 Proxy Statement 91
Benefits of Long Tenure | | Independence Controls | | Avoids costs associated with a new independent accountant –Onboarding a new independent accountant is costly and requires a significant time commitment that could distract from management’s focus on financial reporting and controls. | | Internal EY independence processes –EY conducts periodic internal reviews of its audit and other work, assesses the adequacy of partners and other personnel working on our company’s account, and rotates engagement partners consistent with independence requirements. A new global coordinating partner was appointed in fiscal 2020. | | | Regulatory framework –Because EY is an independent registered public accounting firm, it is subject to PCAOB inspections peer review by other “Big 4” accounting firms, and PCAOB and SEC oversight. |
Based on this evaluation, the Audit Committee believes that EY is independent and well qualifiedwell-qualified to serve as our company’s independent accountants. Further, the Audit Committee and the Board believe it is in the best interests of Walmart and our company’s shareholders to retain EY as our company’s independent accountants for fiscal 2018. 2021. Representatives of EY will attendbe present during the 20172020 Annual Shareholders’ Meeting. They will have the opportunity to make a statement if they desire to do so and to respond to appropriate questions. EY’s fees for fiscal 2017 and fiscal 2016 were as follows:
| | | Fiscal 2017 | | | Fiscal 2016 | | Audit Fees | | $ | 19,394,000 | | | $ | 18,437,000 | | Audit-Related Fees | | $ | 1,075,000 | | | $ | 1,156,000 | | Tax Fees | | $ | 1,911,000 | | �� | $ | 2,188,000 | | All Other Fees | | $ | — | | | $ | 1,000 | | TOTAL FEES | | $ | 22,380,000 | | | $ | 21,782,000 |
A description of the types of services provided in each category is as follows:
Audit Fees – Includes the audit of the company’s annual financial statements, the audit of the effectiveness of internal control over financial reporting, the review of the company’s annual report on Form 10-K, the review of the company’s quarterly reports on Form 10-Q, statutory audits required internationally, and consents for and review of registration statements filed with the SEC.
Audit-Related Fees – Includes audits of the company’s employee benefit plans, due diligence in connection with acquisitions and accounting consultations related to GAAP, the application of GAAP to proposed transactions, statutory financial statement audits of non-consolidated affiliates, and work related to the company’s compliance with its obligations under SOX.
Tax Fees – Includes tax compliance at international locations, domestic and international tax advice and planning, assistance with tax audits and appeals, and tax planning for acquisitions and restructurings.
All Other Fees – Includes fees for services that are not contained in the above categories and consists of permissible advisory services.
None of the services described above were approved pursuant to the de minimis exception provided in Rule 2-01(c)(7)(i)(C) of Regulation S-X promulgated by the SEC.
FOR | The Board recommends that shareholders voteFOR the ratification of EY as the company’s independent accountants for fiscal 2018. |
92Walmart | 2017 Proxy Statement • Proposal No. 4: Ratification of Independent Accountants
Audit Committee Report
Audit Committee Independence and Financial Expert Determination
The Audit Committee consists of three Independent Directors, each of whom has been determined by the Board to meet the heightened independence and financial literacy criteria for Audit Committee members under the SEC and NYSE Listed Company Rules. The Board has also designated each member of the Audit Committee as an “audit committee financial expert” as defined under the SEC rules. The members of the Audit Committee are James I. Cash, Jr.; Timothy P. Flynn, the Chair of the Audit Committee; and Thomas W. Horton. Additional information regarding the members of the Audit Committee and the Audit Committee’s roles and responsibilities is described under “Proposal No. 1 – Election of Directors” and “Board Committees” on pages 12 and 23, respectively.
2017 Audit Committee Meetings
The Audit Committee held 12 meetings in fiscal 2017. At its 4 regularly scheduled in-person meetings, the Audit Committee had separate private sessions with our company’s CEO, CFO, chief audit executive, global chief ethics and compliance officer, EY, and others. During these sessions, candid discussions took place regarding our company’s financial, accounting, auditing, and internal control over financial reporting, compliance, Exchange Act reporting, and ethics matters. Throughout the year, the Audit Committee had full access to management, EY, and internal auditors.
The remainder of the Audit Committee’s fiscal 2017 meetings were to, among other things, review and discuss the financial statements to be included in the company’s Form 10-Q and Form 10-K filings, meet with its legal counsel and the company’s management regarding the Audit Committee’s independent FCPA-related investigation, and review and discuss ongoing enhancements to our global ethics and compliance program. Additional information about the Audit Committee’s role in the FCPA investigation may be found under “Director Compensation” on page 41.
The Audit Committee’s meeting agendas are established by the Chair of the Audit Committee in consultation with the chief audit executive, the Lead Independent Director, the company’s Corporate Secretary, and other members of senior management.
Responsibilities and 2017 Committee Actions
The Audit Committee operates under a written charter, which may be found in the “Corporate Governance” section of Walmart’s website located athttp://stock.walmart.com/investors/corporate-governance/governance-documents. The Audit Committee reviews and assesses the adequacy of its charter on an annual basis.
To fulfill its oversight responsibilities as detailed in its charter, during or after fiscal 2017, the Audit Committee did, among other things, the following:
○ | reviewed and discussed with Walmart’s management and EY Walmart’s audited consolidated financial statements for fiscal 2017; | | | ○ | reviewed management’s representations that those consolidated financial statements were prepared in accordance with GAAP and fairly present the consolidated results of operations and consolidated financial position of our company for the fiscal years and as of the dates covered by those consolidated financial statements; | | | ○ | discussed with EY the matters required to be discussed by applicable audit standards of the Public Company Accounting Oversight Board (the “PCAOB”), including matters related to the planning and results of the audit of Walmart’s consolidated financial statements; | | | ○ | received the written disclosures and the letter from EY required by applicable requirements of the PCAOB relating to EY’s communications with the Audit Committee concerning EY’s independence from Walmart, and discussed with EY its independence from Walmart; | | | ○ | based on the review and discussions with management and EY discussed above, recommended to the Board that Walmart’s audited annual consolidated financial statements for fiscal 2017 be included in Walmart’s Annual Report on Form 10-K for fiscal 2017 filed with the SEC; | | | ○ | reviewed and discussed with management and EY Walmart’s earnings releases and the financial statements in the quarterly reports on Form 10-Q; | | Pre-Approval Policy |
Audit Committee Report • Walmart | 2017 Proxy Statement 93
○ | monitored and reviewed audit, audit-related, and non-audit services performed for Walmart by EY and considered whether EY’s provision of non-audit services was compatible with EY’s independence from Walmart; | | | ○ | monitored the progress and results of the testing of internal control over financial reporting pursuant to Section 404 of SOX, reviewed a report from management and the internal auditors of our company regarding the design, operation, and effectiveness of internal control over financial reporting, and reviewed an attestation report from EY regarding the effectiveness of internal control over financial reporting as of January 31, 2017; | | | ○ | reviewed and discussed with management the company’s significant accounting policies and the appropriateness of the disclosures of non-GAAP measures that the company publicly made during or with respect to fiscal 2017, including in the company’s earnings releases; | | | ○ | reviewed the fiscal 2017 internal audit plan and budget; | | | ○ | concurred in the appointment and compensation of the company’s chief audit executive; | | | ○ | reviewed the company’s related person transactions and approved these transactions in accordance with the Transaction Review Policy, which is discussed under Audit Matters – Related Person Transaction Review Policy, on page 38; | | | ○ | reviewed the company’s enterprise risk management process with members of senior management and regularly received status reports on significant risks identified by management in various areas of the company, including legal, compliance, ethics, information technology, and cybersecurity; | | | ○ | monitored management’s progress on the implementation of enhancements to the company’s global ethics and compliance program, and determined that management had achieved adequate progress in implementing the enhancements applicable for fiscal 2017. For more information about the Audit Committee’s oversight role regarding our global ethics and compliance program, please see the “Ethics and Compliance Goals” discussion on page 60 of this proxy statement; and | | | ○ | received regular reports from management regarding our company’s policies, processes, and procedures regarding compliance with applicable laws and regulations and Walmart’s Global Statement of Ethics. |
The Audit Committee submits this report:
James I. Cash, Jr.
Timothy P. Flynn,Chair
Thomas W. Horton
94Walmart | 2017 Proxy Statement • Audit Committee Report
Audit Committee Pre-Approval Policy
To maintain the independence of our independent accountants and to comply with applicable securities laws, the NYSE Listed Company Rules, and the Audit Committee charter, the Audit Committee is responsible for reviewing, deliberating on, and, if appropriate, pre-approving all audit, audit-related, and non-audit services to be performed for our company by the independent accountants. For that purpose, the Audit Committee has established a policy and related procedures regarding the pre-approval of all audit, audit-related, and non-audit services to be performed by our company’s independent accountants (the “Pre-Approval Policy”). The Pre-Approval Policy provides that our company’s independent accountants may not perform any audit, audit-related, or non-audit service for Walmart, subject to those exceptions that may be permitted by applicable law, unless: (i) the service has been pre-approved by the Audit Committee; or (ii) Walmart engaged the independent accountants to perform the service pursuant to the pre-approval provisions of the Pre-Approval Policy. In addition, the Pre-Approval Policy prohibits the Audit Committee from pre-approving certain non-audit services that are prohibited from being performed by our company’s independent accountants by applicable securities laws. The Pre-Approval Policy also provides that Walmart’s corporate controller will periodically update the Audit Committee as to services provided by the independent accountants. For each of these services, the independent accountants provide detailed back-up documentation to the corporate controller. Under the Pre-Approval Policy, the Audit Committee has pre-approved certain categories of services to be performed by the independent accountants and a maximum amount of fees for each category. The Audit Committee annually reassesses these service categories and the associated fees. Individual projects within the approved service categories have been pre-approved only to the extent that the fees for each individual project do not exceed a specified dollar limit, which amount is reassessed annually. Projects within a pre-approved service category with fees in excess of the specified fee limit for individual projects may not proceed without the specific prior approval of the Audit Committee (or a member to whom pre-approval authority has been delegated). In addition, no project within a pre-approved service category will be considered to have been pre-approved by the Audit Committee if the project would cause the maximum amount of fees for the service category to be exceeded, and the project may only proceed with the prior approval of the Audit Committee (or a member to whom pre-approval authority has been delegated) to increase the aggregate amount of fees for the service category.
Table of Contents Proposal No. 3 Ratification of Independent Accountants At least annually, the Audit Committee designates a member of the Audit Committee to whom it delegates its pre-approval responsibilities. That member has the authority to approve interim requests as set forth above within the defined, pre-approved service categories, as well as interim requests to engage Walmart’s independent accountants for services outside the Audit Committee’s pre-approved service categories. The member has the authority to pre-approve any audit, audit-related, or non-audit service that falls outside the pre-approved service categories, provided that the member determines that the service would not compromise the independent accountants’ independence and the member informs the Audit Committee of his or her decision at the Audit Committee’s next regular meeting. The Audit Committee approvedpre-approved all of the audit fees, audit-related fees, tax fees, and all other fees paid to the company’s independent accountants in fiscal 2017.2020. | Independent Accountant Fees |
EY’s fees for fiscal 2020 and fiscal 2019 were as follows: | | Fiscal 2020
($) | | Fiscal 2019
($) | | Audit Fees | | 25,922,000 | | 26,493,000 | | Audit-Related Fees | | 1,102,000 | | 855,000 | | Tax Fees | | 701,000 | | 753,000 | | All Other Fees | | 26,000 | | 0 | | TOTAL FEES | | 27,751,000 | | 28,101,000 |
A description of the types of services provided in each category is as follows: Audit Fees– Includes the audit of the company’s annual financial statements, the audit of the effectiveness of internal control over financial reporting, the review of the company’s annual report on Form 10-K, the review of the company’s quarterly reports on Form 10-Q, statutory audits required internationally, and consents for and review of registration statements filed with the SEC or other documents issued in connection with securities offerings. Audit-Related Fees– Includes audits of the company’s employee benefit plans, due diligence in connection with acquisitions and accounting consultations related to GAAP, the application of GAAP to proposed transactions, statutory financial statement audits of non-consolidated affiliates, and work related to the company’s compliance with its obligations under SOX. Tax Fees– Includes tax compliance at domestic and international locations, assistance with tax audits and appeals, and tax planning for acquisitions and restructurings. All Other Fees– Includes fees for permissible advisory services that are not contained in the above categories and consists of subscription fees to access accounting and financial reporting content. None of the services described above were approved pursuant to the de minimis exception provided in Rule 2-01(c)(7)(i)(C) of Regulation S-X promulgated by the SEC. | FOR | | | The Board recommends that shareholders voteFORthe ratification of the appointment of EY as the company’s independent accountants for fiscal 2021. |
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Table of Contents Proposal No. 3 Ratification of Independent Accountants Audit Committee Report Independence and Financial Expert Determination The Audit Committee currently consists of four Independent Directors, each of whom has been determined by the Board to meet the heightened independence and financial literacy criteria for Audit Committee members under the SEC and NYSE Listed Company Rules. The current members of the Audit Committee are Timothy P. Flynn, the Chair of the Audit Committee; Cesar Conde; Sarah J. Friar; and Thomas W. Horton. The Board has designated each of Mr. Flynn, Ms. Friar, and Mr. Horton as an “audit committee financial expert” as defined under the SEC rules. Additional information regarding the members of the Audit Committee and the Audit Committee’s roles and responsibilities is described under “Director Nominees for 2020” beginning on page 14 and under “Board Committees” on page 24. • Fiscal 2020 Audit Committee Meetings
The Audit Committee held eight meetings in fiscal 2020. During the fiscal year, the Audit Committee had separate private sessions with our company’s CEO, CFO, Chief Legal Officer, Chief Audit Executive, Global Chief Ethics and Compliance Officer, Chief Accounting Officer, EY, and others. In these sessions, candid discussions took place regarding our company’s financial, accounting, auditing, internal control over financial reporting, Exchange Act reporting, enterprise risk management, information systems, information security, cybersecurity, legal, ethics, and compliance matters. Throughout the year, the Audit Committee had full access to management, EY, and internal auditors. At its meetings and calls during the fiscal year, the Audit Committee, among other things, reviewed and discussed the financial statements to be included in the company’s Form 10-Q and Form 10-K filings, met with the company’s management and legal counsel regarding the Audit Committee’s independent FCPA-related investigation and other investigations, and received updates from management regarding areas of risk the Audit Committee oversees, including with respect to cybersecurity, enterprise risk management, data privacy and security, investigations related to opioids, and investigations related to financial services. Additional information about the Audit Committee’s role in risk oversight may be found under “The Board’s Role in Risk Oversight” on page 29. The Audit Committee’s meeting agendas are established by the Chair of the Audit Committee in consultation with the Chairman of the Board, the Lead Independent Director, the Chief Audit Executive, the company’s Corporate Secretary, and other members of senior management. Walmart | 2017 Proxy Statement Responsibilities and Fiscal 2020 Committee Actions
95The Audit Committee operates under a written charter, which may be found in the “Corporate Governance” section of Walmart’s website located athttp://stock.walmart.com/investors/corporate-governance/governance-documents. The Audit Committee reviews and assesses the adequacy of its charter on an annual basis and, when appropriate, recommends charter changes to the Board.
To fulfill its oversight responsibilities as detailed in its charter, during or after fiscal 2020, in addition to certain other matters described elsewhere in this section, the Audit Committee did, among other things, the following: | ● | reviewed and discussed with Walmart’s management and EY Walmart’s audited consolidated financial statements for fiscal 2020; | | ● | reviewed management’s representations that those consolidated financial statements were prepared in accordance with GAAP and fairly present the consolidated results of operations and consolidated financial position of our company for the fiscal years and as of the dates covered by those consolidated financial statements; | | ● | discussed with EY the matters required to be discussed by applicable requirements of the PCAOB and the SEC, including matters related to the planning and results of the audit of Walmart’s consolidated financial statements; | | ● | received the written disclosures and the letter from EY required by applicable requirements of the PCAOB relating to EY’s communications with the Audit Committee concerning EY’s independence from Walmart, and discussed with EY its independence from Walmart; |
Table of Contents Proposal No. 3 Ratification of Independent Accountants | ● | based on the review and discussions with management and EY discussed above, recommended to the Board that Walmart’s audited annual consolidated financial statements for fiscal 2020 be included in Walmart’s annual report on Form 10-K for fiscal 2020 filed with the SEC; | | ● | reviewed and discussed with management and EY Walmart’s earnings releases and the financial statements in the quarterly reports on Form 10-Q, prior to filing with the SEC; | | ● | monitored, reviewed, and approved, in accordance with the Pre-Approval Policy adopted by the Audit Committee, all audit, audit-related, and non-audit services performed for Walmart by EY, and considered whether EY’s provision of non-audit services was compatible with EY’s independence from Walmart. For more information about the Audit Committee’s Pre-Approval Policy, please see “Audit Committee Pre-Approval Policy” on page 81; | | ● | evaluated the performance of EY and supported EY’s transition to a new lead engagement partner for the company’s fiscal 2020 audit, in conjunction with the mandated rotation for such positions. For more information about the Audit Committee’s evaluation, appointment, and compensation of EY, please see “Proposal No. 3, Ratification of Independent Accountants” on page 80; | | ● | monitored the progress and results of the testing of internal control over financial reporting pursuant to Section 404 of SOX, reviewed reports from management and the internal auditors of our company regarding the design, operation, and effectiveness of internal control over financial reporting, and reviewed an attestation report from EY regarding the effectiveness of internal control over financial reporting as of January 31, 2020; | | ● | reviewed and discussed with management and EY changes in accounting principles that may affect the company, the company’s significant accounting policies and the appropriateness of the disclosures of non-GAAP measures that the company publicly made during or with respect to fiscal 2020, including in the company’s earnings releases; | | ● | reviewed the fiscal 2020 internal audit plan, budget, and activities; | | ● | reviewed the company’s related person transactions and approved these transactions in accordance with the Transaction Review Policy, which is discussed under “Related Person Transaction Review Policy,” on page 34; | | ● | reviewed the company’s enterprise risk management process with members of senior management and regularly received status reports on significant risks identified by management in various areas of the company, including legal, compliance, ethics, information systems, information security, and cybersecurity; | | ● | oversaw the resolution of its independent FCPA-related investigation and the review by management and its outside advisors of the company’s policies, procedures, and internal controls relating to the company’s global anti-corruption program. The Audit Committee oversaw and continues to oversee management’s reporting and monitorship obligations associated with the company’s FCPA-related settlement with the U.S. Department of Justice and the SEC; and | | ● | received regular reports from management regarding our company’s policies, processes, and procedures regarding compliance with applicable laws and regulations and Walmart’s Global Statement of Ethics. |
The Audit Committee submits this report: Timothy P. Flynn,Chair
Cesar Conde
Sarah J. Friar
Thomas W. Horton | 84 | | www.walmart.com |
Table of Contents PROPOSAL NO. 4 Approval of an Amendment to the ASDA Sharesave Plan 2000 | What am I voting on? | | | | | | | | It has been 10 years since we last asked shareholder to approve additional Shares be available for issuance under the ASDA Sharesave Plan 2000. In order to permit ASDA to continue to grant options under this plan, we are asking our shareholders to approve an amendment that would allow for an additional 10 million Shares to be available under the plan. | | |
ASDA Group Limited, a wholly-owned subsidiary of Walmart (“ASDA”), operates retail stores in the United Kingdom. At our 2004 Annual Shareholders’ Meeting, our shareholders approved the ASDA Sharesave Plan 2000, and at our 2010 Annual Shareholders’ Meeting, our shareholders approved certain amendments to the ASDA Sharesave Plan 2000 (the ASDA Sharesave Plan 2000, as so amended, being referred to as the “ASDA Plan”). The ASDA Plan is established as a United Kingdom all-employee share ownership plan and is operated by ASDA but uses Walmart’s Shares. It is a type of employee incentive plan used by many large United Kingdom public companies, including many retailers. The features of the ASDA Plan (which are described below) have been tailored to comply with the relevant United Kingdom legislation, thereby providing a tax-efficient opportunity for eligible associates and directors of ASDA and its participating subsidiaries (collectively referred to as “ASDA Associates”) to purchase Walmart Shares and align the interests of such eligible ASDA Associates with those of our shareholders. It has been ten years since our shareholders last were asked to approve an increase to the number of Shares available for issuance under the ASDA Plan. In order to permit ASDA to continue to grant options under this plan, we are asking shareholders to approve an amendment to the ASDA Plan that would allow for an additional 10 million Shares to be available for issuance pursuant to options granted on or after June 3, 2020 (the “Amendment”). The Board believes this increase is necessary to continue to allow Walmart to properly compensate and incentivize our eligible ASDA Associates. On February 6, 2020, the Board approved the Amendment to increase the number of Shares available for issuance under the ASDA Plan and recommended that the ASDA Plan, as amended by the Amendment, be presented to and approved by our shareholders at the 2020 Annual Shareholders’ Meeting. Shareholder approval of the ASDA Plan, as amended by the Amendment, is required by the NYSE Listed Company Manual, which generally requires shareholder approval of all material revisions to, or an increase in the number of Shares available under, certain equity compensation plans. If the Amendment is approved by our shareholders, ASDA may apply the new limit (plus any Shares available for issuance under the old limits) to any options granted on or after June 3, 2020, subject to approval of the Amendment to the rules of the ASDA Plan by or on behalf of the ASDA board of directors. Other than the request to approve increasing the number of Shares available for issuance under the ASDA Plan, no other material revisions are being made or submitted for shareholder approval at this time. As of March 31, 2020, options to purchase 5,865,222 Shares were outstanding under the ASDA Plan, which options had a weighted average exercise price of $76.51 per Share. As of March 31, 2020, the aggregate market value of the Shares underlying those options, based on the closing price for a Share on the NYSE on March 31, 2020 of $113.62 per Share, was $666,406,524.
Table of Contents Proposal No. 4 The ASDA Sharesave Plan 2000, as Amended Summary of the Material Provisions of the ASDA Plan In this section, we summarize the material provisions of the ASDA Plan, as amended by the Amendment. Annex B to this proxy statement contains the text of the rules of the ASDA Plan, as so amended by the Amendment, and we urge you to read that text in its entirety when deciding how to vote on this Proposal No. 4. Under the ASDA Plan, ASDA’s board of directors may offer to eligible ASDA Associates options to purchase Shares, at an exercise price not less than the higher of: (i) the par value of a Share; and (ii) 80 percent of the average closing sales price for a Share on the NYSE for the three trading days preceding the business day before the offer date. Offers of options will normally be made at a point within a 23-day period beginning five days after a date on which Walmart announces its quarterly results of operations. No more than two offers may be made in each calendar year. Options granted under the ASDA Plan are not transferable, except in the event of the option holder’s death. The persons eligible to participate in the ASDA Plan are United Kingdom tax resident employees and full-time directors of ASDA and its participating subsidiaries who have been continuously employed for at least six months or such longer period as ASDA’s board of directors may specify (not exceeding five years). Other employees and full-time directors of ASDA and its participating subsidiaries may also be eligible, at the discretion of ASDA’s board of directors. Eligible ASDA Associates are generally employed in the United Kingdom. On March 31, 2020, there were approximately 141,265 ASDA Associates eligible to participate in the ASDA Plan. Under the ASDA Plan, as amended by the Amendment, the aggregate maximum number of Shares that may be acquired pursuant to options granted under the ASDA Plan on or after June 3, 2020 will be 10,000,000 Shares plus any available Shares remaining under the ASDA Plan as in place on June 4, 2010 (which was approximately 2,786,354 Shares as of March 31, 2020). If an option lapses without having been exercised, the Shares subject to that lapsed option are not recycled and so those Shares still count toward this limit. The ASDA board of directors may also impose a limit on the maximum number of Shares available for a particular offer. If the ASDA board of directors receives valid applications in excess of either the overall or any per offer limit, applications will be scaled down in accordance with the ASDA Plan rules. Although an eligible ASDA Associate is not required to make any payment to ASDA at grant with respect to an option granted under the ASDA Plan, any eligible ASDA Associate who is offered an option under the ASDA Plan and who applies for that option must enter into a “save as you earn” contract (referred to as a “savings contract”) under a “certified SAYE savings arrangement” (as defined in the relevant legislation) with an authorized financial institution. Under a savings contract, the ASDA Associate agrees to make monthly savings of a fixed amount, which are normally made by payroll deduction. Minimum and maximum monthly amounts apply and are specified by the applicable legislation and/or the HM Revenue & Customs approved prospectus governing certified SAYE savings arrangements. Currently, these provide that savings must not be less than £5 or more than £500 per month. The ASDA board of directors may decide different minimum and maximum limits will apply to an offer, subject to the legislation and prospectus. Savings contracts may be for a three-year or five-year savings period, although currently only three-year savings contracts are offered. Under the terms of the savings contract, an option holder may be entitled to receive a tax-free “bonus” on maturity. If the option holder withdraws the savings early, the option holder may receive tax-free interest depending on the length of time since the contract began. Both the bonus and interest rates are set by the United Kingdom Treasury and are currently zero. The number of Shares subject to an option under the ASDA Plan is the largest number which, at the specified exercise price per share for that invitation, may be acquired out of the expected proceeds of the related savings contract (including any bonus due under the savings contract). Options under the ASDA Plan must be granted within 30 days of the first date with reference to which the exercise price was determined (or within 42 days if applications are scaled down). Options normally only become exercisable from maturity of the savings contract, and normally remain exercisable for 6 months. Shares subject to an option may only be purchased with cash up to an amount equivalent to the repayment (which may include any interest or bonus) due under that savings contract. Option holders who do not wish to exercise their options may choose to withdraw their savings instead, in which case the options would lapse. Options granted under the ASDA Plan may also become exercisable in other circumstances, in which case specified exercise periods under the ASDA Plan rules apply. Options may be exercisable in connection with: | ● | the option holder’s death; | | ● | termination of the option holder’s employment by reason of retirement, injury, disability, or redundancy; |
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Table of Contents Proposal No. 4 The ASDA Sharesave Plan 2000, as Amended | ● | termination of the option holder’s employment more than three years after the date of grant other than by reason of gross misconduct; | | ● | a transfer under the United Kingdom Transfer of Undertakings (Protection of Employment) Regulations 2006; | | ● | certain other transfers of the business or part of business in which the option holder works; | | ● | the option holder’s employing company ceasing to be an associated company (within the meaning of the relevant United Kingdom legislation) by reason of a change of control; | | ● | the acquisition of control of Walmart pursuant to a general offer in certain circumstances; | | ● | the sale of more than half of ASDA’s issued share capital or the undertaking of the business of ASDA to a company which is not an associated company of Walmart; or | | ● | a resolution for the voluntary winding up of ASDA. |
Options generally lapse six months after the maturity date of the relevant savings contract, but may lapse earlier under the rules in certain circumstances, for example where early exercise events are triggered (see above). Where an option holder dies, the option holder’s personal representatives may exercise the option until the first anniversary of the option holder’s death or, where the death occurred during the normal exercise window following maturity, the first anniversary of the maturity date of the savings contract. An option lapses upon the option holder being adjudicated bankrupt and in certain other circumstances set out in the rules of the ASDA Plan and/or the relevant savings contract. Options can be exercised in whole or in part. Where exercising in part, the minimum amount of the option that may be exercised is ten percent of the total Shares covered by the option. The maximum number of Shares that can be acquired is the number of Shares whose aggregate purchase price under the option can be paid using the proceeds of the savings contract at that time. In certain corporate event scenarios, options granted under the ASDA Plan may be exchanged for new options over shares in the acquiring company or another company, provided the new options meet certain requirements intended to ensure that they are equivalent to the old options. The ASDA Plan permits ASDA’s board of directors to make appropriate adjustments under the rules to the number or nominal amount of Shares subject to options, the exercise price of options, and the overall limit on Shares available under the ASDA Plan, in order to reflect stock splits, reverse stock splits, reorganization, recapitalization, spin-off, and other similar events affecting the Shares. The ASDA Plan is operated by ASDA’s board of directors, or an appropriate committee thereof. Decisions of the ASDA board are conclusive (subject to agreement of ASDA’s auditors where required). In practice, and consistent with common practice in the United Kingdom, ASDA’s board of directors delegates authority to carry out most of its functions under the ASDA Plan to a committee appointed by ASDA’s board of directors and consisting primarily of key officers of ASDA. Benefits under the ASDA Plan are not pensionable benefits. All Shares issued under the ASDA Plan will rank alongside Shares then in issue on the date of receipt of the option holder’s exercise notice in all respects. However, the option holder will not be entitled to a dividend where the dividend is announced before the Shares are issued or transferred upon exercise. Where the Shares are listed on the NYSE, the ASDA board will procure that any Shares newly issued in connection with the ASDA Plan will be admitted to listing as soon as practicable. The ASDA Plan may be amended by ASDA’s board of directors at any time, including in ways that may increase the costs of the ASDA Plan to Walmart. However, any “material revision,” as defined by the NYSE Listed Company Manual, or any increase in the number of Shares available under the ASDA Plan, except pursuant to an adjustment described above, must be approved by our shareholders. For so long as it is intended that the ASDA Plan will continue to qualify for tax advantages under the relevant United Kingdom legislation, no alteration to a provision that is necessary to satisfy the legislative requirements will take effect if it would result in an option ceasing to qualify for those tax advantages. No amendment that adversely affects option holders’ rights under options already granted may take effect without the consent of the affected option holders as would be required by ASDA’s articles of association if all option holders were shareholders of a separate class of Shares. ASDA or the ASDA board may at any time suspend or terminate the ASDA Plan, although this will not affect any subsisting rights under the plan.
Table of Contents Proposal No. 4 The ASDA Sharesave Plan 2000, as Amended Tax Benefits of the ASDA Plan The ASDA Plan is designed to enable the recipients of options to receive favorable tax treatment under the tax laws of the United Kingdom. Walmart does not intend for ASDA Associates who are or become U.S. taxpayers to receive options under the ASDA Plan. The following paragraphs provide a brief summary, for information purposes only, of the United Kingdom tax benefits for the option holder and ASDA respectively. For an option holder subject to income tax exclusively in the United Kingdom, the principal United Kingdom tax benefits of the ASDA Plan are that: | ● | any bonus or interest received under the savings contract is tax-free; | | ● | no income tax or social security contributions arises on the grant of the option; and | | ● | normally, no income tax or social security contributions arises upon the exercise of the option. |
The employing company may be able to claim a United Kingdom corporation tax deduction for an amount equal to the gain on exercise that would have been taxable on the option holder (had the option not been tax-qualified) from the profits on which corporation tax is payable. This relief is given for the accounting year in which the option holder acquires the Shares. Summary of Amendments to the ASDA Plan If the Amendment is approved by our shareholders at the 2020 Annual Shareholders’ Meeting, then the number of Shares available for issuance under the ASDA Plan will be increased by 10 million Shares. The ASDA Plan currently limits the number of Shares that may be acquired pursuant to options granted under the ASDA Plan on or after June 4, 2010, to 15 million Shares plus any number of Shares that were remaining under the prior approvals referred to above of which only 2,786,354 Shares remain available for issuance as of March 31, 2020. To permit ASDA to continue granting options under the ASDA Plan in the future, the Amendment would provide an additional 10 million Shares to be available for acquisition pursuant to options granted under the ASDA Plan on or after June 3, 2020. The Board believes this increase is necessary to continue to allow Walmart to properly compensate and incentivize our eligible ASDA Associates. At this time, we are not seeking to make any other material amendments to the ASDA Plan. The table below shows the aggregate number of Shares that are subject to options outstanding under the ASDA Plan as of March 31, 2020, granted to the individuals and groups listed therein. Walmart cannot determine at this time the number of such options that will be exercised in the future or any other benefits that would be realized by option holders from the exercise of options in the future. | ASDA PLAN BENEFITS | | | | Name and Position | | Options to Purchase Shares Granted Under the
ASDA Plan (# of Shares that may be purchased) | | C. Douglas McMillon–President and CEO | | 0 | | M. Brett Biggs–Executive Vice President and CFO | | 0 | | Suresh Kumar–Global Chief Technology Officer and Chief Development Officer | | 0 | | Judith McKenna–Executive Vice President, President and CEO, Walmart International | | 0 | | Kathryn McLay–Executive Vice President, President and CEO, Sam’s Club | | 0 | | John Furner–Executive Vice President, President and CEO, Walmart U.S. | | 0 | | Executive Officers as a Group | | 0 | | All Non-Management Directors as a Group | | 0 | | All Non-Executive Associates as a Group | | 5,865,222 |
| FOR 
| | The Board recommends that shareholders voteFORthe approval and continued operation of the ASDA Plan as amended by the Amendment. |
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Table of Contents Shareholder Proposals OurIncluded in this proxy statement are four separate shareholder proposals that have been submitted under SEC rules by shareholders who notified the company has received notice of thetheir intention of shareholders to present three separatethe proposals for voting at the 20172020 Annual Shareholders’ Meeting. The text of the shareholder proposals and supporting statements appear exactly as received by our company. Some shareholder proposals and supporting statements may contain assertions about Walmart that we believe are incorrect, and we have not tried to refute all such inaccuracies in the company’s responses. All statements and citations contained in a shareholder proposal and its supporting statements are the sole responsibility of the proponent of that shareholder proposal. Our company will provide the names, addresses, and shareholdings (to our company’s knowledge) of the proponents of any shareholder proposal upon oral or written request made to Wal-Mart Stores,Walmart Inc., c/o Gordon Y. Allison, Senior Vice President, Office of the Corporate Secretary, Chief Counsel for Finance and General Counsel, Corporate Division,Governance, 702 Southwest 8th8th Street, Bentonville, Arkansas 72716-0215, (479) 273-4000.
The Board recommends a voteAGAINSTeach of the following shareholder proposals for the reasons set forth in Walmart’s statements in opposition following each shareholder proposal.
Proposal No. 5
Request to Adopt an Independent Chairman Policy
Resolved:
The stockholders of Wal-Mart Stores, Inc. (the “Company”), ask the Board of Directors to adopt a policy that, whenever possible, the Board chairman should be a director who has not previously served as an executive officer of the Company and who is “independent” of management. For these purposes, a director shall not be considered “independent” if, during the last three years, he or she—
o | was affiliated with a company that was an advisor or consultant to the Company, or a significant customer or supplier of the Company; | | AGAINST | | o | was employed by or hadThe Board recommends a personal service contract(s) with the Company or its senior management; | | | o | was affiliated with a company or non-profit entity that received the greater of $2 million or 2% of its gross annual revenues from the Company; | | | o | had a business relationship with the Company that the Company had to disclose under the Securities and Exchange Commission regulations; | | | o | has been employed by a public company at which an executive officervote AGAINST each of the Company serves as a director; | | following shareholder proposals, in each case if properly presented at the meeting, for the reasons stated in Walmart’s statements in opposition following each shareholder proposal. | | o | had a relationship of the sort described above with any affiliate of the Company; and, | | | o | was a spouse, parent, child, sibling or in-law of any person described above. |
Table of Contents The policy should be implemented without violating any contractual obligation and should specify how to select an independent chairman if a current chairman ceases to be independent between annual shareholder meetings. Compliance with the policy may be excused if no independent director is available and willing to be chairman.
Supporting Statement:
The Board of Directors, led by its chairman, is responsible for protecting shareholders’ long-term interests by providing independent oversight of management, including the Chief Executive Officer, in directing the corporation’s affairs. This oversight can be diminished when the chairman is not independent.
96Walmart | 2017 Proxy Statement • Shareholder Proposals
PROPOSAL NO. 5
Report on Impacts of Single-Use Plastic Bags WHEREAS:
There is a global plastic pollution crisis and Walmart distributes an estimated 18 billion to 20 billion single-use plastic carry out shopping bags per year, which contribute to plastic pollution. About one trillion single-use plastic bags are used annually across the globe, or 2 million every minute. From 8 million to 12 million tons of plastics are carried into oceans annually. Plastic bags are among the most common items found in beach cleanups. These lightweight bags can easily become airborne on city streets or in landfills and migrate into waterways, where they cause harm. Plastics bags degrade in water to small particles that animals mistake for food. Plastic pollution affects 260 species, causing fatalities from ingestion, entanglement, suffocation, and drowning. Sea turtles mistake plastic bags for jellyfish. An independent chairman who sets agendas, priorities,estimated 100,000 marine animals are killed annually by plastic bags. They have also been found in the stomachs of many land animals including elephants, tigers, zebras, cows, and procedurescamels, according to National Geographic. By 2050 there could be more plastic than fish, according to the Ellen MacArthur Foundation. Former UN Undersecretary-General Erik Solheim called the issue “an ocean Armageddon.” The environmental cost of consumer plastic products and packaging exceeds $139 billion annually, according to the American Chemistry Council. More than 470 U.S. municipalities in 28 states now ban or charge fees for single-use plastic carry out bags. California, Connecticut, Delaware, Oregon, Hawaii, Maine, New York, and Vermont and more than 50 countries have taken action to ban or restrict plastic bags. U.S. plastic bag recycling rates are estimated at less than 5%. Plastic bags collected curbside often clog municipal recycling machinery. The company has goals for its private brand packaging to be 100% recyclable, reusable, or compostable by 2025, but no apparent policies or plans to phase out single-use shopping bags. The company states that reducing unnecessary plastic waste is a key priority. It has taken actions to reduce bag waste and promote reusable bags, but has not disclosed efforts to phase out distribution of single-use plastic bags. Our company lags competitors on this issue. Kroger Co. has agreed to phase out single-use plastic bags by 2025. Other competitors including Costco, Trader Joe’s, and Whole Foods Market have previously stopped using single-use plastic bags. Further, Walmart has not disclosed current plastic bag usage; Kroger has stated it distributes 6 billion bags annually, and that its phase out action will reduce landfill waste by 123 million pounds. RESOLVED:
Shareowners of Walmart request that the Board can enhance its oversight and accountabilityboard of management and ensuredirectors issue a report, at reasonable cost, omitting confidential information, assessing the objective functioningenvironmental impacts of continuing to use single-use plastic shopping bags. Supporting Statement:
Proponents believe that the report should include an effective Board. We view the alternative of a lead outside director, even one with a robust set of duties, as adequate only in exceptional circumstances fully disclosed by the Board. Several respected institutions recommend chair independence. CalPERS’ Corporate Core Principles and Guidelines state that “the independence of a majorityassessment of the Board is not enough;” “the leadershipreputational, financial, and operational risks associated with continuing to single-use plastic bags and, if possible, goals and a timeline to phase them out.
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Table of the board must embrace independence, and it must ultimately change the way in which directors interact with management.”Contents Shareholder Proposals We urge you to vote FOR this proposal.
Walmart’s Statement in Opposition to Proposal No. 5 The Board believes it has embraced the need for independence by structuring our Board leadership structure in a way that balances independentOur approach to environmental, social, and effective leadership and oversight of risk while also maintaining a strong alignment with our long-term strategy. The retail industry continues to undergo a period of disruptive transformation and, in order to meet our customers’ demands, our long-term strategygovernance (“ESG”) topics is striving to deliver on its objective to provide a seamless customer experiencerooted in our storescompany’s purpose to save people money so they can live better. To maximize shared value, we aim not only to run a good retail business, but also to make large-scale and through e-commerce. This kind of transformation must be implemented carefully.
Our Board has taken several steps to create a balanced governance structure in which Independent Directors exercise substantial oversight over management in the areas of governance and business strategy. Walmart has separated the roles of Chairman and CEO since 1988. This separation of roles allows our Chairman to focus on oversight and governance matters and allows our CEO to focus on managing our complex daily operations and implementing the directives of the Board. Furthermore, since 2004, our Board has appointed an Independent Director to serve in the role of Lead Independent Director, who is expected to cultivate and expresses an independent perspectivelasting improvements to the CEO, the Chairman, and the remaining members of the Board. Moreover,ecosystems most salient to our Independent Directors routinely meet in private sessionbusiness. We set our ESG priorities based on relevance to discuss matters without the presence of management, and the Lead Independent Director presides over these meetings and communicates feedback from these sessions to the Chairman. For more information about the role and responsibilities of our Lead Independent Director, please see our Corporate Governance Guidelines available athttp://stock.walmart.com/investors/corporate-governance/governance-documents/.
In addition to embracing independence, and as discussed in more detail in the Corporate Governance section of this proxy statement, the Board is focused on Walmart’s strategic priorities and continues to seek ways to maximize its effectiveness. Our Chairman’s unique and in-depth knowledge of the history and growth of our company coupled with his industry expertise inpurpose, key areas of strategiccategories and markets, Walmart’s ability to make an impact, and relative importance to our business, make him particularly qualifiedcustomers and shareholders. We believe collective action in collaboration with other leaders and stakeholders is essential to lead discussions on strategictransforming systems. We believe the adoption of this proposal would distract management from our company’s commitment to a vision of zero plastic waste and governance matters at the Board level. Our CEO has a deep institutional knowledge of Walmart developed through an extensive leadership career at our company, and he is best able to bring key business issues and risks to the attention of the Board. Furthermore, the Lead Independent Director serves as an independent liaison between the Chairman, the CEO, the other members of the Board, and managementunnecessary in light of our company. Our Lead Independent Director has served onongoing work to reduce the Board since 2006use of plastic bags.
We are committed to a vision of zero plastic waste. We are committed to a vision of zero plastic waste and also has extensive institutional knowledge about Walmart’s strategic objectives,are working across our business and with our suppliers to use less plastic, move to reuse and refill models, recycle more, and support innovations to improve plastic waste reduction systems. We believe the industry in which we operate, and the areas of strategic importance to our company. Furthermore, our Lead Independent Director currently also serves as the chair of the NGC, the general purpose of which is to assist the Board in identifying qualified director nominees and implementing sound corporate governance policies and practices. The primary oversight of strategic and governance mattersbiggest opportunity for our company to reduce plastic waste is entrusted to Board committees with independent chairs. Eachin our value chain—specifically the plastic packaging of the Audit Committee, the CMDC, the NGC, the SPFC,products we sell. As a result, we have focused much of our work there through targeted interventions on private label packaging and the TeCC are chaired by Independent Directors. These committees play a critical role in our governance and strategy, and each committee has access to management and the authority to retain independent advisorsthrough collective efforts such as Project Gigaton. However, as it deems appropriate. Furthermore, despiterelates to plastic bags, we also have projects underway to reduce the substantial shareholdingsuse of plastic bags, encourage recycling, and spur demand for recycled content.
We continue to work toward reducing the use of plastic bags and encouraging recycling. In 2008, we announced a goal to reduce shopping bag waste by an average of 33% per store by 2013, and we reported in 2013 that we exceeded that goal and did so ahead of schedule. We are currently working on the issue of plastic bags in the following ways: | ● | Reduced use: we recently launched a “One More Item” campaign that encourages customers and cashiers to fully pack bags. To make it more convenient for customers to choose reusable options, in spring 2019, we instituted a campaign to offer reusable plastic bags for purchase at checkout carousels in our U.S. stores. | | ● | Encourage recycling: by using in-store plastic bag and film collection bins, along with the how2Recycle label on our plastic bags, we aim to remind customers how easy it is to recycle plastic bags at Walmart. | | ● | Spur demand for recycled content: we are adding recycled content to single-use bags that are offered to customers, and our new reusable bags are made with 100% recycled content. |
We believe simple reminders like these can help educate and encourage our customers to join us in a whole-system effort to reduce plastic bag waste. Moreover, we continue to work to find cost-effective, sustainable alternatives for single-use plastic bags and ways to educate and encourage our customers to use alternative approaches. We have set many aspirations and goals to achieve zero plastic waste. The Sustainability Hub of our corporate website includes a number of aspirations and goals we have set to achieve zero plastic waste, including taking action to eliminate problematic or unnecessary plastic packaging by 2025; achieving 100% of in-scope private brand plastic packaging to be reusable, recyclable, or industrially compostable by 2025; and setting an ambitious 2025 recycled content target across all plastic packaging used. Specifically with respect to plastic bags, one of the membersaspirations listed on the Sustainability Hub of our corporate website is to make reusable bags more easily available for purchase by our customers globally and continue to work to reduce plastic bags, encouraging associates to use fewer bags when bagging. Summary There are many factors, including stakeholder feedback, that impact our decisions on where best to prioritize ESG efforts regarding the Walton family, our company has no plansreduction of plastic waste globally. We believe implementing the proposal would require us to rely on any of the governance exemptions available to “controlled companies” under the NYSE Listed Company Rules, ifset aside those decisions and when such exemptions may become available. For the reasons discussed above, the Board believes its leadership structure clearly demonstrates that the Board has embraced the need for independence and effectiveness. Furthermore,would be an unnecessary distraction from larger initiatives where we believe our shareholderscompany can have recognized the effectiveness of our current Board leadership structure by re-electing our Chairman, the Lead Independent Director, and other Board members each year.a bigger impact in reducing plastic waste globally.
| AGAINST | | | For the above reasons, the Board recommends that the shareholders voteAGAINSTthis proposal, if properly presented at the meeting. | |
Table of Contents Shareholder Proposals • PROPOSAL NO. 6
Report on Supplier Antibiotics Use Standards
WHEREAS:
The World Health Organization deems antibiotic resistance one of the top 10 global health threats of 2019.1 Antibiotic resistance renders life-saving drugs useless; by 2050, the phenomenon could cause an estimated 300 million premature deaths and up to $100 trillion in global economic damage.2 The use of antibiotics in animal agriculture is a major contributor to antibiotic resistance.3 Nearly two-thirds of antibiotics sold for use in the U.S. are used in food animals.4 When antibiotics are routinely administered to animals, bacteria can adapt and spread, causing drug-resistant infections in humans. To reduce risks related to antibiotic resistance, meat producers must reduce the routine use of medically important antibiotics in their supply chains. Allowing routine use, even as a preventive measure, creates a greater potential for creating antibiotic resistant superbugs, increasing Walmart’s reputational and legal risk. Despite the urgent threat of antibiotic resistance, Walmart does not appear to prohibit the routine use of medically important antibiotics by its meat and poultry suppliers. The company’s published position on antibiotic use aligns with current legal requirements, but those requirements are widely regarded by consumer health advocates as insufficient to prevent antibiotic resistance in meat products.5 Antibiotic resistant bacteria were recently found in certain of Walmart’s pork products, leading to significant negative press.6 Having “superbugs” in its meat products is a substantial reputational and legal risk for Walmart. Not only will many consumers avoid the store, there is legal liability associated with selling meat products proven to contain superbugs. Walmart | 2017 Proxy Statement97announced in April 2019 that it would establish its own supply chain for Angus beef. Beef represents the largest proportion of antibiotics used in food animals (42 percent).7 By sourcing directly from producers, Walmart has a unique opportunity to decrease its risk related to antibiotic resistance in its beef supply. Other major food companies are beginning to address the urgent antibiotic resistance crisis. McDonald’s announced a comprehensive policy in 2018 fully disallowing the use of medically important antibiotics for prevention purposes in beef from the top ten countries from which it sources beef. Whole Foods Market has a strict policy to only carry meat products raised without any antibiotics.8 The majority of the top 25 fast food and restaurant chains in the U.S. only serve chicken raised without the routine use of medically important antibiotics.9 In contrast, Walmart’s policy does not explicitly prevent suppliers from using medically important antibiotics for disease prevention. Without an explicit prohibition, it is likely that its suppliers are routinely administering medically important antibiotics. BE IT RESOLVED:
Shareholders request that Walmart issue a report, prepared at reasonable cost and excluding proprietary information, assessing strategies to strengthen the company’s existing supplier antibiotic use standards, such as prohibiting or restricting the routine use of medically important antibiotics by meat and poultry suppliers, and assess the costs and benefits to public health and the company compared to current practice. | 1 | https://www.who.int/emergencies/ten-threats-to-global-health-in-2019 | | 2 | https://amr-review.org/ | | 3 | https://www.who.int/news-room/detail/07-11-2017-stop-using-antibiotics-in-healthy-animals-to-prevent-the-spread-of-antibiotic-resistance | | 4 | https://www.fda.gov/media/133411/download | | 5 | https://www.keepantibioticsworking.org/blog/2018/10/10/q34scr6v4d181kgngaxi182zzlyi14 | | 6 | https://www.newsweek.com/walmart-pork-products-superbugs-resistant-critically-important-antibiotics-1473867 | | 7 | https://www.fda.gov/animal-veterinary/cvm-updates/fda-releases-annual-summary-report-antimicrobials-sold-or-distributed-2016-use-food-producing | | 8 | https://media.wholefoodsmarket.com/news/whole-foods-market-no-antibiotics-in-meat-departments | | 9 | https://uspirg.org/sites/pirg/files/reports/Chain-Reaction-5/ChainReaction5beefReport_12sm.pdf |
Proposal No. 6
Shareholder Proxy Access
Resolved:
Shareholders ask the Board of Directors to provide proxy access for shareholder nominees for election to the Board, with the following essential elements:
1.92 | Nominating shareholders or shareholder groups (“Nominators”) must beneficially own 3% or more of the Company’s outstanding common stock (“Required Stock”) continuously for at least three years and pledge to hold such stock through the annual meeting. | | | 2. | Nominators may submit a statement not exceeding 500 words in support of each nominee to be included in the Company proxy materials. | | | 3. | The number of shareholder-nominated candidates eligible to appear in Company proxy materials shall be one-quarter of the directors then serving or two, whichever is greater. | | | 4. | No limitation shall be placed on the number of shareholders who can aggregate their shares to achieve the challenging 3% of required stock for a continuous 3-years. | | | 5. | No limitation shall be placed on the re-nomination of shareholder nominees by Nominators based on the number or percentage of votes received in any election. | | | 6. | The Company shall not require that Nominators pledge to hold stock after the meeting if their nominees fail to win election. | | | 7. | Loaned securities shall be counted as belonging to any nominating shareholder who represents it has the legal right to recall those securities for voting purposes and will hold those securities through the date of the meeting.www.walmart.com |
Table of Contents Proxy access is a fundamental shareholder right that will make directors more accountable and enhance shareholder value. A 2014 Chartered Financial Analyst Institute study concluded that proxy access would “benefit both the markets and corporate boardrooms, with little cost or disruption” and could raise overall US market capitalization by up to $140 billion if adopted market-wide. (http://www.cfapubs. org/doi/pdf/10.2469/ccb.v2014.n9.1).
Shareholder proposals calling for proxy access have recently received overwhelming shareholder support, gaining a majority at 123 companies out of 198 facing such a proposal since 2015. Kaye Scholar partner Nicholas O’Keefe recently observed, “Companies are going to lose trying to fight proxy access.” Of the 72 similar proposals presented by the New York Comptroller in 2016, the vast majority were withdrawn when companies agreed to adopt a similar version of proxy access.
In addition to public pension fund support, at an SEC Investor Advisory Committee meeting a representative from BlackRock, the largest asset manager in the world, stated the firm supports proxy access as a fundamental right, generally on terms consistent with the proposed 2011 SEC rule. TIAA-CREF sent a letter to its 100 largest holdings requesting that they adopt proxy access bylaws consistent with the 3% ownership threshold included in the 2011 SEC rule.
Please vote to enhance shareholder value:
Shareholder Proxy Access – Proposal 6
98 Walmart | 2017 Proxy Statement • Shareholder Proposals
Walmart’s Statement in Opposition to Proposal No. 6 Walmart remains committed to quality shareholder engagement because it allows the Board to understand and consider the viewpoints of our shareholders. During fiscal 2017, we offered to have conversations with nearly all of our top 60 institutional investors and conducted calls with approximately half of those investors, as well as leading proxy advisory firms. During these conversations we discussed issues of interest to our shareholders, including governance matters. Management informs the NGC about the feedback received during these ongoing discussions and the issues of interest raised by our shareholders.
We recognize that proxy access is a topic of interest to members of the investment community who share a sincere interest in ensuring the appropriate composition of company boards. However, we do not believe the adoption of this proposal is the right approach for Walmart. The NGC is comprised entirely of independent, non-management directors, and it currently is chaired by our Lead Independent Director. Among its responsibilities are to regularly review the compositionunnecessary in light of the Boardcompany’s current position statement regarding antibiotics in farm animals, as well as the company’s prior announcements and Board committeesother discussions of this topic in our Global Responsibility Reports (“GRR Reports”) and evaluate the skillsour most recent Environmental, Social, and qualifications ofGovernance Report (“2019 ESG Report”).
Our approach to environmental, social, and governance (“ESG”) topics is rooted in our current Board members. Throughout the year, the NGC engages in ongoingcompany’s purpose to save people money so they can live better. To maximize shared value, we aim not only to run a good retail business, but also to make large-scale and extensive Board succession planning. The NGC also seeks advice and input from a prominent director search consultant firm. This ongoing process is designed to identify and nominate director candidates who possess a diverse and complementary mix of skills and professional experience necessary to oversee our complex, global business and who can contributelasting improvements to the overall effectiveness ofecosystems most salient to our Board. It also permits the NGC and the Board to evaluate the thoughtful and timely periodic refreshment of the composition of the Board. As described above and earlier in this proxy statement, we solicited feedback from institutional shareholdersbusiness. We set our ESG priorities based on a number of matters, including governance matters. In light of those discussions and the composition of our company’s shareholder base, we believe the proposal too easily casts aside the notion that proxy access can interrupt and undermine the role of the NGC to guide this critical governance process. While our shareholders ultimately might reject a director candidate in a politicized board election process, which can be initiated at virtually no cost to a nominating shareholder, the resulting costrelevance to our company purpose, key categories and disruption for the NGC, the Board,markets, Walmart’s ability to make an impact, and management would be meaningfulrelative importance to our customers and therefore, would not beother stakeholders. We believe collective action in collaboration with other leaders and stakeholders is essential to transforming systems.
At Walmart, we sell a wide variety of food products at everyday low prices. We put customers in charge of their choices by helping provide clear, accurate information about food ingredients and production. This includes transparency around how we work with partners in our shareholders’ short- or long-term interests.supply chain to improve farm animal welfare and reduce antibiotic use in farm animals. Walmart’s Position Statement Regarding Antibiotics in Farm Animals Furthermore, shareholders already have the abilityWe focus our animal welfare efforts on engaging our suppliers and encouraging progress on key issues such as: technology to recommend director candidates by meansmonitor animal welfare, sufficient housing and adequate pain management for animals, promoting more humane practices, and promoting judicious use of the processes identifiedantibiotics in our governance documentsanimal agriculture.
The judicious use of antibiotics in treating, controlling, and describedpreventing disease in this proxy statement. Each director candidate recommended byanimals is a shareholder pursuant to this process is submitted to the NGC, and the NGC evaluates all shareholder-recommended director candidates on the same basis as all other director candidates. Over the years, our Board has embracedcomplex issue. We believe antibiotic use must reflect a variety of progressive governance practicesconsiderations, including an understanding that the responsible use of antibiotics is one critical tool that can be used to keep animals healthy and should be used in a way that also preserves the effectiveness of antibiotics in human and veterinary medicine. Through our “Antibiotics in Farm Animals Position,” which provide anis available on our corporate website, we call for judicious use of medically important antibiotics and the elimination of using antibiotics for growth promotion. As stated in our 2019 ESG Report, we are committed to sourcing 20 commodities more sustainably by 2025, which includes a focus on antibiotic stewardship for beef, dairy, eggs, poultry, and pork.
We expect our suppliers to help protect the integrity of the food we sell by complying with all federal, state, and local regulatory requirements, as well as Walmart’s food safety standards. In addition, our position statement requests that our Walmart U.S. and Sam’s Club U.S. fresh meat, seafood, deli, dairy, and egg suppliers adopt and implement the American Veterinary Medical Association’s Judicious Use Principles of Antimicrobials, which include disease prevention strategies, appropriate balance between ensuring the Board’s accountability to shareholders and enabling the Board to provide effectiveveterinary oversight, and strategic directionlimited medical antibiotic use to ill or at-risk animals. Moreover, our position statement asks the same suppliers to adopt and implement the U.S. Food and Drug Administration’s voluntary guidance regarding judicious use of medically important antimicrobial drugs. Walmart’s Progress and Ongoing Work on Judicious Use of Antibiotics We are committed to working with our suppliers and other organizations to implement these practices and promote responsible antibiotic use. For example, Walmart recently agreed to the Framework for Antibiotic Stewardship in Food Animal Production, which defines the long-term benefitcore components of all shareholders. For example:antibiotic stewardship programs “to ensure that antibiotics are used judiciously throughout production to protect animal and public health.” We also support public reporting of antibiotic use as well as consistency of on-pack product claims to ensure clarity and usefulness of information to our customers and members. Our own efforts to address antibiotics use includes an annual supplier survey to determine whether suppliers have antibiotic stewardship policies and use monitoring systems in place; and whether antibiotic administration decisions are guided by veterinarians and implemented as part of an animal health program. We reported in our 2019 ESG Report additional context about how we continue to work with The Sustainability Consortium to collect data from our suppliers and identify improvement opportunities. In April 2019, we announced that we were entering into a partnership to establish a private supply chain for Angus beef. As part of that partnership, we expect this supplier to implement and adhere to the principles stated in our position statement regarding the judicious use of antibiotics, requiring that methods be established for ensuring consistent data tracking, and that applicable withdrawal periods are observed before the animals are processed.
Table of Contents Shareholder Proposals o | The Compensation, NominatingSummary Animal science plays a central role in guiding animal welfare practices, but it does not always provide clear direction. Companies often make animal welfare decisions considering a combination of science and Governance Committee has been converted into two, distinct board committees comprised entirelyethical practices, which can lead to different approaches. As described above, we believe we already have demonstrated that our management team continues to engage with these issues using data provided by suppliers, the input of independent directors;internal and external experts, and new external frameworks, where appropriate, in order to review and improve our standards regarding the judicious use of antibiotics and to help our business deliver safe and affordable products in a sustainable way. Therefore, we believe the preparation of the report requested by the proposal is unnecessary and would distract management’s focus and resources away from other important initiatives and objectives. |
| | | o | The NGC currently is chaired by our Lead Independent Director; | | | o | Each member of the Board is elected annually and serves for a one-year term; | | | o | Currently, the majority of our Board is independent, and only 1 member of the Board is a member of management; | | | o | Board members have full access to the company’s officers, Associates, and outside advisors; | | | o | The Independent Directors annually appoint the Lead Independent Director, who has extensive and comprehensive roles and responsibilities; | | | o | Shareholders holding 10% or more of Walmart’s outstanding shares may request special shareholders’ meetings; and | | | o | There are no supermajority voting requirements for matters presented for a shareholder vote. |
Therefore, the Board believes our corporate governance policies and the measures employed by the NGC for the nomination and election of Directors have led to a Board that is responsive to shareholder input and is conducive to long-term value creation.
AGAINST | For the above reasons, the Board recommends that the shareholders voteAGAINSTthis proposal, if properly presented at the meeting. |
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Table of Contents Shareholder Proposals• Walmart | 2017 Proxy Statement 99 Proposal No. 7
Request for Independent Director with Environmental Expertise
Environmental expertise is critical to the success of Fortune 500 companies generally and Walmart specifically. Walmart’s global supply chain, massive shipping and surface transportation operation network and thousands of stores have an enormous environmental impact.
Increasingly, shareholders, lenders, host country governments and regulators, and affected communities are focused on how to effectively track, manage and reduce the environmental impact of varying economic activities. A company’s inability to demonstrate that policies and practices are in line with internationally accepted environmental standards can lead to difficulties in expanding into new markets, raising new capital and maintaining public goodwill and a favorable reputation with customers.
Walmart has staked much of the company’s public image on a range of environmental initiatives. But these efforts, often operating without independent third-party verification, have been widely criticized as inadequate. The Sierra Club, the nation’s largest and one of the most prominent environmental organizations recently reminded its members that Walmart’s carbon pollution was increasing while the company “pours millions of dollars into a misleading PR campaign around sustainability.”1As the impacts of climate change have become increasingly clear and concern has grown about the impact of coal-based energy production, another report found that, in 2013, Walmart consumed 4,240,000 tons of coal to power its U.S. stores and distribution centers.2
We believe that Walmart would benefit by addressing the environmental impact of its business at the most strategic level by nominating an environmental specialist for election to the board. An authoritative figure with acknowledged expertise and standing could allow Walmart to more effectively address the environmental issues inherent in a business of the company’s size and reach.
Therefore, Be it Resolved:
Shareholders request that management nominate at least one candidate for election to the board at the next annual meeting of shareholders who:
oPROPOSAL NO. 7
Policy to Include Hourly Associates as Director Candidates | hasRESOLVED:
Shareholders of Walmart Inc. (“Walmart”) urge the board to adopt a high levelpolicy (the “Policy”) of expertise and experience in environmental matters relevant to global supply chains, transportation or energy efficiency and is widely recognized inpromoting significant representation of employee perspectives among corporate decision makers by requiring that the business and environmental communities as an authority in such field, as reasonably determinedinitial list of candidates from which new nominees are chosen (the “Initial List”) by the company’s board or the Nominating and Governance Committee and | | | o | include (but need not be limited to) hourly Associates. The Policy should provide that any third-party consultant asked to furnish an Initial List will qualify, subjectbe requested to exceptionsinclude such candidates.WHEREAS:
There is growing consensus that the presence of employees on corporate boards can contribute to the long-term sustainability of a company. Policymakers have noted that the current status quo of having companies be run exclusively for the benefit of shareholders is contributing to “stagnant wages, runaway executive compensation and underinvestment in extraordinary circumstances explicitly specifiedresearch and innovation.”1Similar arguments are being made in the business community. The Business Roundtable recently announced that it is reevaluating the fundamental purpose of a corporation to align with stakeholders’ interests and generate shared prosperity for business and society.2 New research suggests that employee representation grows the long-term value of a company in several ways. According to the National Bureau of Economic Research, giving workers formal control rights increases female board representation and raises capital formation.3In Germany, the “co-determination” model of shared governance has been lauded as an excellent check and balance against short-termist capital allocation practices.4 Legislators are supportive of this notion as well, with nearly one-third of Senate Democrats supporting an initiative led by Senator Tammy Baldwin.5Both Senator Baldwin and Senator Elizabeth Warren have introduced legislation that codifies employee representation on corporate boards, noting that modern corporate governance needs to be accountable to and inclusive of a wider array of interests, notably employees.6Additionally, recent polling demonstrates substantial public support (over 53%) across party lines for employee representation.7 While the current Walmart board satisfies independence requirements, it is lacking in representation from the hourly Associates who understand the daily store operations thoroughly. Every day, Walmart’s hourly Associates demonstrate their care and commitment to the long-term health of the company, as well as the communities and local economies in which the stores operate. They work hard to ensure the company’s long-term success and stability, and reflect the racial, gender, and economic diversity of the company’s consumer base.8 The Policy we propose resembles the Rooney Rule in the National Football League (NFL), which requires teams to interview minority candidates for head coaching and senior football operations openings. By adopting the Rooney Rule, the NFL was able to increase diversity and set a precedent for other industries.9Policies like the one advanced in this Proposal have been adopted by the board, as an independent director, under the definition Walmart usesnominating and governance committees of Amazon Inc., Costco Wholesale Corporation, Home Depot, and Neogen Corporation. We urge shareholders to classify its directors; provided, however, that no director shall be considered independent if he or she has had a financial relationship with an organization that has received, in any year in the previous three years, more than $100,000 from Walmart’s majority shareholders, a member of the Walton family or the Walton Family Foundation.vote for this proposal. |
The nomination should be made in a manner that does not affect the unexpired term of any director.
| 1 | https://ilsr.org/walmart-climate/www.nytimes.com/2019/01/06/opinion/warren-workers-boards.html | | 2 | Institute for Local Self Reliance, Walmart’s Dirty Energy Secret, November, 2014https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans | | 3 | http://economics.mit.edu/files/17273 | | 4 | https://prospect.org/labor/codetermination-difference/ | | http://rooseveltinstitute.org/wp-content/uploads/2017/10/Corp-Gov_FINAL.pdf | | 5 | https://www.baldwin.senate.gov/press-releases/baldwin-Ieads-effort-to-give-workers-a-greater-voice-at-public-companies | | 6 | https://www.wsj.com/articles/companies-shouldnt-be-accountable-only-to-shareholders-1534287687 | | https://www.baldwin.senate.gov/press-releases/reward-work-act-2019 | | 7 | https://www.dataforprogress.org/blog/2018/12/14/employee-governance | | 8 | https://cdn.corporate.walmart.com/11/0d/f9289df649049a38c14bdeaf2b99/2017-cdi-report-web.pdf | | 9 | https://www.sec.gov/comments/s7-06-16/s70616-293.pdf) |
Table of Contents 100Walmart | 2017 Proxy Statement • Shareholder Proposals
Walmart’s Statement in Opposition to Proposal No. 7 We believe that being an efficient and profitable business and being a good steward of the environment can be accomplished together. Nearly 12 years ago, our company established three aspirational sustainability goals:
(i) to create zero waste;
(ii) operate with 100% renewable energy; and
(iii) sell products that sustain resources and the environment.
We have reported our numerous initiatives and progress toward achieving these goals over the years since as early as 2007, and each of these reports is available athttp://corporate.walmart.com/global-responsibility/global-responsibility-report-archive. During this time, we have worked to increase the clarity and transparency of these reports. Our 2016 Global Responsibility Report extensively discusses how we work in the U.S. and around the world to make renewable energy work financially and sustainably, and our 2017 Global Responsibility Report will continue this tradition.
In November 2016, we announced new goals and initiatives, including an emissions-reduction plan that is in line with the December 2015 Paris agreement on climate change and is the first such plan by a retailer to have its goals approved by the Science Based Targets Initiative – a partnership between CDP (formerly known as the Carbon Disclosure Project), the U.N. Global Compact, World Resources Institute, and WWF to help companies determine how much they must cut emissions to prevent the worst impacts of climate change. The Technical Director of CDP, a non-profit that runs global disclosure systems for investors, companies, and governmental organizations to manage their environmental impacts, has heralded Walmart’s emissions-reduction plan as a “game changer” (see http://sciencebasedtargets.org/2016/11/04/walmarts-science-based-target-a-game-changer/).
For years, management has provided regular updates about our sustainability initiatives and progress to the NGC (including its predecessor board committee), which is comprised entirely of Independent Directors and has responsibility for reviewing and advising management regarding the company’s social, community, and sustainability initiatives. The NGC also has responsibility for actively seeking potential director candidates who are qualified to become Board members applying the criteria set forth in our Corporate Governance Guidelines, input from the Board evaluation process, and the expected future needs of our Board and Board committees. Ultimately, when assessing a potential candidate, the NGC and the Board consider the different viewpoints and experiences that a candidate could bring to the Board and how those viewpoints and experiences could enhance the Board’s execution of its responsibilities in providing guidance and counsel to management.
As described in more detail in the section of this proxy statement titled “Election of Directors,” the NGC engagesgenerally seeks director candidates with experience, skills, or background in a rigorous and dynamic process for identifying and evaluating potential candidates and recommending candidatesareas relevant to the successful oversight of our company’s strategy at an enterprise level, including various financial, operational, and strategic issues facing large multinational retail companies. In light of our global and complex business, our Board for nomination for election tovalues the Board.insights gained from diverse professional experiences and backgrounds in executive or director-level leadership roles with other large international organizations. In discharging its duties to identify qualified and diverse candidates for the Board,addition, the NGC regularly reviewsalso considers whether potential director candidates meet the composition ofindependence and other requirements for service on the Board and its committees as set forth in the NYSE Listed Company Rules and determines whether the addition of one orSEC’s rules. As discussed in more directors with particular experience, skills, or characteristics would make the Board and its committees more effective. To that end, the NGC may engage director candidate search consultant firms to seek out candidates who have the experience, skills, and characteristics that the NGC believes are important to support the company’s long-term strategic and governance needs. Furthermore, our Bylaws already provide shareholders an adequate means for recommending candidates for nomination to the Board whom shareholders believe have certain experience, skills, or expertise that might benefit the company and its shareholders. As described under the heading “Communicating with the Board”detail earlier in this proxy statement, shareholders may follow the described procedures to recommend candidates for nomination for election to the Board who the shareholder believes meets the qualifications for a director candidate at our company. All shareholder recommendations of potential director candidates are submitted to the NGC for its review, analysis, and consideration, and candidates who are recommended by shareholders will be evaluated by the NGC on the same basis as all other director candidates.
Our Board currently has one member with significant expertise in environmental issues. Rob Walton, retired Chairman of the Board, currently serves as the chair of the executive committee of the board of directors of Conservation International, and he is also the co-chair of the Arizona State University Global Institute of Sustainability. Therefore, for the reasons outlined above, we believe that adopting the policy described in this shareholder proposal would unduly limit the ability of the NGC and the Board to review and select potential nominees who, in their judgment, have the combination of experience,the skills and characteristicsqualifications of our director nominees demonstrates how our Board is well positioned to provide strategic advice and effective oversight to our management team.
Moreover, we value associate feedback and provide many channels for our associates to communicate their interests, concerns, and feedback to senior management including through cascaded leadership communications, company intranet, Facebook Workplace and other social media channels, semi-annual formal listening tours conducted by senior operations executives, our Associate Engagement Surveys, Open Door Policy, and our Global Ethics and Compliance Hotline. Senior leaders from our People Division regularly update the CMDC on matters regarding Walmart associates, including our culture, diversity, and inclusion initiatives. We stated in our 2019 ESG Report that we believe our engagement efforts have led to meaningful improvement in company policies. In recent years and in partnership with our Board, Walmart has made significant investments in our U.S. hourly associates. For example, we stated in our 2019 ESG Report that: | ● | we had raised our starting wages in the U.S. over the prior three years; | | ● | in fiscal year 2019, we had delivered approximately $793 million in bonuses to full- and part-time hourly associates in our Walmart U.S. stores; | | ● | we had reduced our Walmart U.S. store associate turnover; | | ● | more than 75% of our Walmart U.S. store operation management team members had started as hourly associates; | | ● | we had implemented a more flexible approach to paid-time-off; | | ● | we had introduced an education benefit allowing associates to earn a college degree for $1 per day; | | ● | we had expanded our parental leave benefits and introduced an adoption benefit; and | | ● | we had opened nearly 200 Walmart Academies in the U.S. with hundreds of thousands of associates having been trained in these academies since the inception of the program. |
Walmart offers a wide variety of career opportunities, low barriers to entry, competitive wages and benefits, and paths to advancement through on-the-job coaching, training, and education. We are proud to be a company where an associate can start in an entry-level job and turn it into a successful career. Summary Walmart remains committed to being a great place to work, and our Board believes the current nomination process properly identifies qualified director candidates with the right mix of diverse skills, backgrounds, and experiences and who can best suited to overseerepresent the company’s complex, global business operations and overseebest interests of all stakeholders. Moreover, our Board believes the company already provides many different ways for associates to provide feedback to management and its management in achieving the company’s strategic priorities and evolving business objectives.Board. Therefore, we believe the adoption of this proposal is not necessary. | AGAINST | For the above reasons, the Board recommends that the shareholders voteAGAINSTthis proposal, if properly presented at the meeting. |
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Table of Contents Shareholder Proposals PROPOSAL NO. 8
Report on Strengthening Prevention of Workplace Sexual Harassment RESOLVED:
Shareholders of Walmart Inc. (“Walmart”) urge the Board of Directors to strengthen Walmart’s prevention of workplace sexual harassment by formalizing the Board’s oversight responsibility, aligning senior executive compensation incentives, reviewing (and if necessary overseeing revision of) company policies, and reporting to shareholders by December 31, 2020 on actions taken (omitting confidential and proprietary information). WHEREAS:
This past year, workplace sexual harassment has garnered major attention from elected officials, the media and policy makers, and spurred significant public debate. In June 2019, the International Labor Organization adopted a global treaty to protect workers facing violence and harassment at work.1 In the U.S., over 100 bills related to sexual harassment were introduced in state legislatures in 2019.2 Members of Congress introduced the BE Heard Act to expand protections for vulnerable workers, especially those in low-wage jobs, where research shows sexual harassment is more pronounced.3 Workplace sexual harassment can damage companies in several ways. First, it may harm corporate reputation, which can alienate consumers. A 2018 study inHarvard Business Reviewfound that a single sexual harassment claim makes a company seem less equitable, and that sexual harassment, more than financial misconduct, is perceived as evidence of a problematic corporate culture.4 Additionally, a company whose culture tolerates sexual harassment tends to have higher turnover and less productive employees: 80 percent of women who’ve been harassed leave their jobs within two years.5 The Center for American Progress (CAP) found that the retail industry had the second highest incidence of harassment claims in the private sector, representing 13.4 percent of all claims.6 CAP found that “women—particularly women of color—are more likely to work lower-wage jobs [like retail], where power imbalances are often more pronounced and where fears of reprisals or losing their jobs can deter victims from coming forward.”7 Sexual harassment allegations can lead to declines in share value. After the firing of Steve Easterbrook, former McDonald’s CEO and former Walmart board member, for inappropriate relations with an employee, attention focused on allegations of sexual harassment8 and a workplace culture enabling such behavior.9 In November, McDonalds’ market value went down by $4 billion and shares plummeted to a new low.10 Robust board oversight is especially important at Walmart to address ongoing sexual harassment issues. In October 2019, the EEOC filed suit against Walmart stating that “from 2014 to 2018 a Walmart employee regularly made unwelcome sexual comments and advances to a female co-worker.”11 In 2018, a well-publicized article documented a female associate’s struggle to hold her manager accountable for inappropriately touching her.12 Similar harassment complaints, from employees taking inappropriate pictures to discrimination against transgender employees, have been lodged.13 As the largest corporate employer of women in the U.S., Walmart can and should be a leader in preventing sexual harassment and holding wrongdoers accountable. We urge shareholders to vote for this proposal. | 1 | https://www.hrw.org/news/2019/06/21/ilo-new-treaty-protect-workers-violence-harassment | | 2 | http://www.ncsl.org/research/about-state-legislatures/2018-legislative-sexual-harassment-legislation.aspx | | 3 | https://www.americanprogress.org/issues/women/news/2018/01/31/445669/politics-policy-turning-corner-sexual-harassment/ | | 4 | https://hbr.org/2018/06/research-how-sexual-harassment-affects-a-companys-public-image | | 5 | https://hbr.org/2017/11/the-insidious-economic-impact-of-sexual-harassment | | 6 | https://law.vanderbilt.edu/phd/faculty/joni-hersch/2015_Hersch_Sexual_Harassment_in_the_Workplace_IZAWOL_Oct15.pdf | | 7 | https://nwlc.org/wp-content/uploads/2017/08/Low-Wage-Jobs-are-Womens-Jobs.pdf | | https://www.nwlc.org/sites/default/files/pdfs/final_nwlc_vancereport2014.pdf | | http://www.jwj.org/fighting-against-sexual-harassment-in-the-workplace | | https://www.americanprogress.org/issues/women/news/2017/11/20/443139/not-just-rich-famous/ | | 8 | https://www.npr.org/2019/11/05/776305627/mcdonalds-fired-ceo-is-getting-millions-putting-spotlight-on-pay-gap | | 9 | https://www.nytimes.com/2019/11/12/business/mcdonalds-harassment-lawsuit.html | | 10 | https://www.thestreet.com/investing/stocks/mcdonalds-sheds-4-billion-in-market-value-as-ceo-steve-easterbrook-steps-down-15152719 | | 11 | https://www.natlawreview.com/article/eeoc-sues-walmart-sexual-harassment | | 12 | https://www.nytimes.com/2018/05/22/business/hollywood-times-up-harassment.html | | https://d3n8a8pro7vhmx.cloudfront.net/united4respect/pages/107/attachments/original/1526484530/Final_Sign_On_Letter_-_Ending_Harassment___Walmart__(3).pdf?1526484530 | | 13 | https://www.dailybreeze.com/2018/03/16/walmart-sued-over-explicit-photos-of-worker-at-torrance-store/ | | http://www.newnownext.com/walmart-sams-club-transgender-discrimination-eeoc/08/2017/ |
Table of Contents Shareholder Proposals • Walmart’s Statement in Opposition to Proposal No. 8
The Board believes the adoption of this proposal is unnecessary in light of the company’s policies and procedures and our corresponding associate training and education programs, the risk oversight responsibility for legal and regulatory compliance that is already formalized in the charter of the Audit Committee, and the fact that the company’s incentive compensation plans include robust clawback provisions that reinforce the company’s policies. The company’s policies prohibit sexual harassment, and the company’s training and education programs raise awareness about the policies and how to report concerns. One of the basic beliefs upon which our company was founded is “respect for the individual” – meaning every associate is responsible for creating a culture of trust and respect that promotes a positive work environment. This means treating one another with fairness and courtesy in all of our interactions in the workplace. Our policy strictly prohibits discrimination or harassment by or directed at associates, job applicants, customers, members, suppliers, or people working on Walmart’s behalf, and we believe our policies are broader than the minimum required by law. As part of the onboarding process, our associates participate in training modules about our Global Statement of Ethics, which includes a discussion about our policies prohibiting discrimination and harassment. In addition, U.S. associates are required to take a refresher training module on a regular basis. Our ongoing associate training, as well as our Global Statement of Ethics, includes a component about how to report concerns. If an associate experiences, observes, or otherwise becomes aware of any conduct that may violate our policies, the associate can report his or her concerns to any salaried member of management using our Open Door process. The associate may also report the issue confidentially or anonymously to our Global Ethics Office via email, phone, or web submission. The company takes all allegations of inappropriate conduct seriously, and we believe we have robust policies and practices in place regarding the investigation of harassment complaints of all types. In addition to the training modules and refresher courses regarding our Global Statement of Ethics, we have launched a number of additional education and awareness training programs designed to reinforce our non-discrimination and harassment policies, enhance awareness about preventing workplace sexual harassment, and remind our associates how to report concerns. Risk oversight responsibility is already formalized in the Audit Committee charter. The charter of the Audit Committee, which is reviewed and approved by the Audit Committee and the full Board on a regular basis, already refers to the Audit Committee’s role and responsibility for oversight of risks related to legal and regulatory compliance, as well as the Global Statement of Ethics. More specifically, the Audit Committee charter states that the Audit Committee shall discuss with management and advise the Board with respect to the company’s policies, processes and procedures regarding compliance with applicable laws, regulations, and our Global Statement of Ethics, and instances of non-compliance therewith. The risk oversight role of the Audit Committee has been described in our proxy materials for several years, including this year on page 29. The company’s incentive compensation plans include clawback provisions for violations of company policies. As described in this and previous proxy statements, the company’s incentive compensation plans support the company’s efforts to enforce its policies. For example, the company has already disclosed that annual cash incentive payments to the company’s senior executives may be reduced by up to 30% if they violate the company’s discrimination and harassment policies. Likewise, the company has already disclosed that awards to senior executives under our incentive compensation plans may be subject to the relevant clawback provisions of the Management Incentive Plan and the Stock Incentive Plan if the senior executive violates company policies, including our policies that prohibit workplace sexual harassment. Summary Walmart | 2017 Proxy Statement 101remains committed to being a great place to work. In light of our current policies and programs and the Audit Committee’s risk oversight function, which have already been described in our public disclosures, as well as the clawback provisions in the company’s incentive compensation plans, the Board believes the adoption of this proposal is unnecessary and would distract from the execution of other important and ongoing strategic initiatives. | | AGAINST | | For the above reasons, the Board recommends that the shareholders vote AGAINST this proposal, if properly presented at the meeting. |
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Table of Contents Stock Ownership | Equity Compensation Plan Information |
The following table provides certain information as of the end of fiscal 2020 with respect to Shares that may be issued under our company’s existing equity compensation plans. | Plan Category | | (a) Number of Securities to
Be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights | | (b) Weighted Average
Exercise Price of Outstanding
Options, Warrants and Rights
($) | | (c) Number of Securities
Remaining Available For
Future Issuance Under Equity
Compensation Plans (Excluding
Securities Reflected in Column (a)) | | Equity compensation plans approved by security holders | | 34,952,295 | (1) | | 70.21 | (2) | | 210,176,578 | (3) | | Equity compensation plans not approved by security holders | | 1,657,636 | (4) | | 0 | | | 0 | | | TOTAL | | 36,609,931 | | | 70.21 | (2) | | 210,176,578 | |
| (1) | In addition to options to purchase Shares, this amount includes 7,107,039 Shares that may be issued upon the vesting of performance equity granted under the Stock Incentive Plan, which represents the maximum number of Shares that may be issued upon the vesting of this performance equity if maximum performance goals are achieved for each performance cycle, and 21,602,632 Shares that may be issued upon the vesting of restricted stock units granted under the Stock Incentive Plan. This amount also includes 1,826,367 Shares deferred in the form of Shares by officers and Outside Directors. This amount also includes 4,396,882 Shares underlying options granted to associates at ASDA as of January 31, 2020. | | (2) | Represents the weighted average exercise price as of January 31, 2020, of options to purchase 19,375 Shares and the rights to acquire 4,396,882 Shares that may be issued under the equity compensation plans for ASDA associates described in footnote (1) above. This weighted average does not take into account Shares that may be issued upon the vesting of other forms of equity described in footnote (1) above. | | (3) | This amount includes 106,864,807 Shares available under the Associate Stock Purchase Plan. | | (4) | This amount includes 1,657,636 restricted stock units issued to Marc E. Lore, an Executive Officer of Walmart, as part of Walmart’s acquisition of Jet.com. For additional information about the restricted stock units issued to Mr. Lore, see the Related Person Transaction discussion on page 36. |
| Holdings of Major Shareholders |
The following table lists the beneficial owners of greater than 5% of the Shares outstanding as of April 9, 2020. As of April 9, 2020, there were 2,833,701,902 Shares outstanding. | | | | | Shared Voting and Investment Power | | | | | Name and
Address of
Beneficial Owner(1) | | Direct or Indirect
Ownership with
Sole Voting and
Investment Power | | Shared, Indirect
Ownership
Through Walton
Enterprises, LLC(1) | | Shared, Indirect
Ownership Through
the Walton Family
Holdings Trust(1) | | Other Indirect
Ownership with
Shared Voting and
Investment Power | | Total | | Percent
of Class | | Alice L. Walton | | 6,748,580 | | | 1,000,891,131 | (3) | | 419,155,600 | (4) | | 2,174 | (5) | | 1,426,797,485 | | 50.35% | | Jim C. Walton | | 6,351,524 | (2) | | 1,000,891,131 | (3) | | 419,155,600 | (4) | | 2,174 | (5) | | 1,426,400,429 | | 50.34% | | John T. Walton Estate Trust | | 0 | | | 1,000,891,131 | (3) | | 0 | | | 0 | | | 1,000,891,131 | | 35.32% | | S. Robson Walton | | 2,614,436 | | | 1,000,891,131 | (3) | | 419,155,600 | (4) | | 2,347 | (6) | | 1,422,663,514 | | 50.21% |
| (1) | The business address of Alice L. Walton, Jim C. Walton, the John T. Walton Estate Trust, S. Robson Walton, Walton Enterprises, LLC, and the Walton Family Holdings Trust is P.O. Box 1508, Bentonville, Arkansas, 72712. | | (2) | Jim C. Walton has pledged 4,251,488 of the Shares directly owned by him as security for a line of credit extended to a company not affiliated with Walmart. | | (3) | Walton Enterprises, LLC holds a total of 1,000,891,131 Shares. Alice L. Walton, Jim C. Walton, and S. Robson Walton share voting and dispositive power with respect to all Shares held by Walton Enterprises, LLC, individually as managing members of Walton Enterprises, LLC, and in their capacities as cotrustees of the John T. Walton Estate Trust, which is also a managing member of Walton Enterprises, LLC. The managing members of Walton Enterprises, LLC have the power to sell and vote those Shares. | | (4) | The Walton Family Holdings Trust holds a total of 419,155,600 Shares. Alice L. Walton, Jim C. Walton, and S. Robson Walton, as cotrustees, share voting and dispositive power. |
Table of Contents Stock Ownership | (5) | The number includes 2,174 Shares held by a trust as to which Jim C. Walton, Alice L. Walton, and an entity under her control, as cotrustees, share voting and dispositive power. | | (6) | This number includes 2,347 Shares held by various trusts in which S. Robson Walton, as cotrustee thereof, shares voting and dispositive power. |
| Holdings of Officers and Directors |
This table shows the number of Shares held by each director and NEO on April 9, 2020. It also shows the Shares held by all of Walmart’s directors and Executive Officers as a group on that date. As of April 9, 2020, there were 2,833,701,902 Shares outstanding. | Name of Beneficial Owner | | Direct or Indirect
with Sole Voting and
Investment Power(1) | | Indirect with
Shared Voting and
Investment Power | | Total | | Percent
of Class | | M. Brett Biggs | | 302,960 | | 0 | | 302,960 | | * | | Cesar Conde | | 2,814 | | 0 | | 2,814 | | * | | Timothy P. Flynn | | 46,757 | | 0 | | 46,757 | | * | | Sarah J. Friar | | 7,236 | | 0 | | 7,236 | | * | | John R. Furner | | 231,726 | | 0 | | 231,726 | | * | | Carla A. Harris | | 7,349 | | 0 | | 7,349 | | * | | Thomas W. Horton | | 11,934 | | 0 | | 11,934 | | * | | Suresh Kumar | | 183,448 | | 0 | | 183,448 | | * | | Marissa A. Mayer | | 29,717 | | 0 | | 29,717 | | * | | Judith J. McKenna | | 302,001 | | 34,336 | | 336,337 | | * | | Kathryn McLay | | 58,850 | | 0 | | 58,850 | | * | | C. Douglas McMillon(2) | | 1,276,543 | | 532,212 | | 1,808,755 | | * | | Gregory B. Penner | | 62,077 | | 482,878 | | 544,955 | | * | | Steven S Reinemund | | 25,578 | | 0 | | 25,578 | | * | | S. Robson Walton(3) | | 2,614,436 | | 1,420,049,078 | | 1,422,663,514 | | 50.21% | | Steuart L. Walton | | 167,061 | | 0 | | 167,061 | | * | | Directors and Executive Officers as a Group (21 persons) | | 8,054,401 | | 1,421,098,504 | | 1,429,152,905 | | 50.43% |
| * | Less than 1% | | (1) | These amounts include Shares of unvested restricted stock and restricted stock units held by certain Executive Officers and stock units deferred by certain Outside Directors and certain Executive Officers. For John R. Furner, this amount includes 4,880 deferred stock units that settle in the form of cash upon payout. These amounts also include Shares that the following persons had a right to acquire within 60 days after April 9, 2020, through vested Shares they hold in the 401(k) Plan: |
| Name | | Shares Held in the
401(k)Plan | | C. Douglas McMillon | | 1,782 | | John R. Furner | | 1,740 | | M. Brett Biggs | | 406 | | Directors and Executive Officers as a Group (21 persons) | | 3,928 |
| (2) | C. Douglas McMillon also holds 1,900 American Depository Receipts of Wal-Mart de Mexico, S.A.B. de C.V. and 1,200 American Depository Receipts of Massmart Holdings Ltd. These holdings represent less than 1% of each class of security. | | (3) | The amount shown for S. Robson Walton includes 1,000,891,131 Shares held by Walton Enterprises, LLC and 419,155,600 held by the Walton Family Holdings Trust. |
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Table of Contents Annual Meeting Information What is a proxy statement, and what is a proxy? A proxy statement is a document that SEC rules require us to provide you when we ask you to vote on certain matters yourselfat a meeting of our shareholders or when we ask you to sign a proxy designating certain individuals to vote on those matters on your behalf. A proxy is your legal designation of another person to vote the Shares you own.own at a meeting of our shareholders. If you designate someone as your proxy in a written document, that document is called a proxy or a proxy card. By signing the proxy card we provide to you, you will designate our Chairman and our CEO as your proxies to cast your vote atduring the 20172020 Annual Shareholders’ Meeting. Walmart’s Board is soliciting your proxy to vote your Shares atduring the 20172020 Annual Shareholders’ Meeting.Meeting and any adjournment or postponement thereof. Walmart pays the cost of soliciting your proxy and reimburses brokers and others for forwarding to you the proxy statement, proxy card, or voting instruction form, and Annual Report to Shareholders and, for certain shareholders, the notice of internet availability of our proxy materials. 2020 Annual Shareholders’ Meeting – Virtual Meeting |
When is the 2020 Annual Shareholders’ Meeting? AnnualThis year, our annual shareholders’ meeting will be a virtual meeting only and will be conducted via live webcast beginning promptly at 10:30 a.m. Central Time on Wednesday, June 3, 2020. There will be no physical meeting location. Although our 2020 Shareholders’ Meeting will be held online as a virtual meeting only, shareholders who held Shares as of the record date for the meeting can still participate in the virtual meeting and ask questions about matters that are relevant to the items of business included in the notice of the meeting as set forth on page 4 above.
How can I attendparticipate in the 20172020 Annual Shareholders’ Meeting? What do I need to bring? NOTICE: If you plan to attend the 2017 Annual Shareholders’ Meeting in person, you must follow the instructions below to gain admission.
Only shareholdersShareholders who owned Shares as of the close of business on April 7, 20179, 2020, are entitled to attendparticipate in the 20172020 Annual Shareholders’ Meeting. Other guests may also listen to the live audio webcast by visiting the “Investors” section of our corporate website athttp://stock.walmart.com/investors.
In order to attend, participate in, vote, ask questions, and examine the list of shareholders during the virtual meeting, shareholders who held Shares as of the close of business on the record date should visitwww.virtualshareholdermeeting.com/WMT2020and enter the 16-digit control number that was included on your notice of internet availability of the proxy materials, on your proxy card, or on the instructions that accompanied your proxy materials. You will be admittedallowed to log in as early as 30 minutes before the start time on Wednesday, June 3, 2020. The virtual meeting platform is supported across internet browsers and devices (e.g., desktops, laptops, tablets, and cell phones). If you intend to join the live webcast, you should ensure that you have a strong WiFi or internet connection from wherever you intend to join and participate in the virtual meeting. We encourage you to access the virtual meeting before it begins, and you should give yourself plenty of time to log in and ensure that you can hear streaming audio prior to the 2017 Annual Shareholders’ Meeting only ifstart of the meeting. If you present valid proof of Share ownership as described below and photo identification (such as a valid driver’s licenseencounter any difficulties accessing the virtual meeting during the check-in or passport) at an entrance to Bud Walton Arena,meeting time, please call the facility at which the 2017 Annual Shareholders’ Meeting is to be held. o | If your Shares are registered in your name and you received your proxy materials by mail, then you should bring the proxy statement you received in the mail or the proxy cardtechnical support number that you received in the mail to the 2017 Annual Shareholders’ Meeting. If you have already completed and returned your proxy card, then bring the top part of the proxy card marked “keep this portion for your records”) |
o | If your Shares are registered in your name and you received a notice of internet availability of the proxy materials in the mail, you should bring that notice of internet availability with you to the 2017 Annual Shareholders’ Meeting. | | | o | If you received an email with instructions containing a link to the website where our proxy materials are available and a link to the proxy voting website, bring that email with you to the 2017 Annual Shareholders’ Meeting. | | | o | If you are a beneficial owner of Shares and your Shares are held in street name as described above, you will be admitted to the 2017 Annual Shareholders’ Meeting only if you present either: a valid legal proxy from your bank, broker, or other nominee as to your Shares, the notice of internet availability of the proxy materials (if you received one), a voting instruction form that you received from your bank, broker, or other nominee (if you have not already completed and returned the voting instruction form), or a recent bank, brokerage, or other statement showing that you owned Shares as of the close of business on April 7, 2017. | | | o | Each shareholder may appoint only one proxy holder or representative to attend the meeting on behalf of such shareholder. |
The use of cameras, camcorders, videotaping equipment, and other recording devices will not be permitted in Bud Walton Arena. Attendees may not bring into the arena large packages or other material that could pose a safety or disruption hazard (e.g., fireworks, noisemakers, horns, confetti, etc.).
Photographs and videos taken at the 2017 Annual Shareholders’ Meeting may be used by Walmart. By attending the 2017 Annual Shareholders’ Meeting, you will be agreeing to Walmart’s use of those photographs and waive any claim or rights with respect to those photographs and videos and their use.posted on the virtual meeting login page.
If I am unable to attendparticipate at the meeting in person. Cantime of the 2020 Annual Shareholders’ Meeting, can I view the meeting via webcast?watch or listen at a later time? Yes. If you are unable to attendparticipate at the 2017 Annual Shareholders’ Meeting in person, we invite you to view a live webcasttime of the virtual meeting, athttp://stock.walmart.com. The webcastthe audio of the 20172020 Annual Shareholders’ Meeting will be available for viewing on our corporate website athttps://stock.walmart.com/investorsfor a limited time after the meeting.
Table of Contents
102Walmart | 2017 Proxy Statement • Annual Meeting Information
VotingWhat is the quorum requirement for holding the 2020 Annual Shareholders’ Meeting?
The holders of a majority of the Shares outstanding and entitled to vote as of the record date for the meeting must be present online at the scheduled time or represented by proxy for business to be transacted at the meeting. As of the close of business on April 9, 2020, the record date for the 2020 Annual Shareholders’ Meeting, Walmart had 2,833,701,902 Shares outstanding. Who may vote at the 20172020 Annual Shareholders’ Meeting? You may vote atduring the meeting2020 Annual Shareholders’ Meeting on Wednesday, June 3, 2020, if you were the holder of record of Shares at the close of business on April 7, 2017,9, 2020, the record date set by the Board for determining those shareholders who are entitled to receive notice of, and to vote on matters at, the 20172020 Annual Shareholders’ Meeting. You are entitled to one vote on each matter properly presented at the 20172020 Annual Shareholders’ Meeting for each Share you owned of record at that time. as of close of business on the record date. If your Shares are registered directly in your name with the company’s transfer agent, Computershare Trust Company, N.A., you are considered a shareholder of record with respect to suchthese Shares. Some shareholders hold Shares through a bank, broker, or other nominee, and are often said to hold suchthese shares in “street name.” These shareholders are considered “beneficial owners” of those Shares. If you held Shares as a beneficial owner in “street name” at the close of business on April 7, 2017,9, 2020, you must obtain a legal proxy, executed in your favor, from the holder of record of those Shares as of that time, to be entitled to be admitted to and participate in the meeting and to vote those Shares atduring the meeting. As of the close of business on April 7, 2017, Walmart had 3,031,556,234 Shares outstanding. How do I vote? The process for voting your Shares depends on how your Shares are held. Generally, as discussed above, you may hold Shares as a “record holder” (that is, in your own name) or in “street name” (that is, through a nominee, such as a broker or bank). As explained above, if you hold Shares in “street name,” you are considered to be the “beneficial owner” of those Shares. Voting by Record Holders.Holders. If you are a record holder, you may vote by proxy or you may vote in person atduring the 2017 Annual Shareholders’ Meeting.virtual meeting on Wednesday, June 3, 2020. If you are a record holder and would like to vote your Shares by proxy prior to the 20172020 Annual Shareholders’ Meeting, you have four ways to vote:submit your proxy:  | | call 1-800-690-6903 using a touch-tone phone (toll charges may apply for calls made from outside the United States) and follow the instructions provided on the call;provided; or | | |  | if you received a proxy card in the mail, complete, sign, date, and mail the proxy card in the return envelope provided to you. | | | | | | | | | | | |
Please note that proxies will not be accepted by telephone andor internet voting will close at(i.e., before the meeting viawww.proxyvote.com) following 11:59 p.m. Eastern timeTime on June 1, 2017.2, 2020. If you wish to submit a proxy to vote by telephone or internet before the meeting, follow the instructions on your proxy card (if you received a paper copy of the proxy materials) or in the notice of internet availability of the proxy materials. If you received a proxy card in the mail and wish to vote by completing and returning the proxy card via mail, please note that your completed proxy card must be received before the polls close for voting atduring the 20172020 Annual Shareholders’ Meeting. Meeting on Wednesday, June 3, 2020. If you plan to attendparticipate in the 20172020 Annual Shareholders’ Meeting on Wednesday, June 3, 2020, and you wish to vote in person,during such time, the virtual meeting platform will allow you will be provided a ballot atto vote your Shares during the 2017 Annual Shareholders’ Meeting.meeting. Even if you vote by proxy prior to June 2, 2017,3, 2020, you may still attendparticipate in the 20172020 Annual Shareholders’ Meeting. | 102 | | www.walmart.com |
Table of Contents Annual Meeting Information Voting by Beneficial Owners of Shares Held in “Street Name.” If your Shares are held in the name of a broker, bank, or other nominee (that is, your Shares are held in “street name”), you should receive separate instructions from the record holder of your Shares describing how to vote.vote your Shares. If your Shares are held in the name of a broker, bank, or other nominee and you want to vote in person,during the virtual meeting, you will need to obtain (and bring with you to the 2017 Annual Shareholders’ Meeting) a legalunique 16-digit control number which appears on the instructions that accompanied the notice of internet availability or the proxy from the record holder of your Shares (who must have been the record holder of your Shares as of the close of business on April 7, 2017) indicatingmaterials that you were a beneficial owner of Shares as of the close of business on April 7, 2017, as well as the number of Shares of which you were the beneficial owner on the record date, and appointing you as the record holder’s proxy to vote the Shares covered by that proxy at the 2017 Annual Shareholders’ Meeting. received. Voting of Shares Held in the 401(k) Plan or the Wal-MartWalmart Puerto Rico 401(k) Plan.If your Shares are held through the 401(k) Plan or the Wal-MartWalmart Puerto Rico 401(k) Plan, you must provide instructions on how you wish to vote your Shares held through such plans no later than 11:59 p.m. Eastern timeTime on May 30, 2017.28, 2020. If you do not provide such instructions by that time, your Shares will be voted by the Retirement Plans Committee of the respective plan in accordance with the rules of the applicable plan.
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What am I voting on, and what are my voting choices for each of the proposals to be voted on atduring the 20172020 Annual Shareholders’ Meeting? YouOn Wednesday, June 3, 2020, you are voting on the following items:
PROPOSAL NO. 1: ELECTION OF 11 DIRECTORS Voting Choices and Board Recommendation: o● | vote in favor of each nominee; | | ● | | o | vote in favor of one or more specific nominees; | | ● | | o | vote against each nominee; | | ● | | o | vote against one or more specific nominees; | | ● | | o | abstain from voting with respect to each nominee; or | | ● | | o | abstain from voting with respect to one or more specific nominees. |
The Board recommends a voteFOReach of the nominees. PROPOSAL NO. 2: NON-BINDING, ADVISORY RESOLUTION TO APPROVE THE FREQUENCY OF FUTURE ADVISORY SHAREHOLDER VOTES TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION Voting Choices and Board Recommendation:
o | vote in favor of holding such vote every 1 Year; | | | o | vote in favor of holding such vote every 2 Years; | | | o | vote in favor of holding such vote every 3 Years; or | | | o | abstain from voting on the advisory resolution. |
The Board recommends shareholders vote “1 YEAR” on this proposal.
PROPOSAL NO. 3: NON-BINDING, ADVISORY RESOLUTION TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
Voting Choices and Board Recommendation: o● | vote in favor of the advisory resolution; | | ● | | o | vote against the advisory resolution; or | | ● | | o | abstain from voting on the advisory resolution. |
The Board recommends a voteFORthe advisory resolution. PROPOSAL NO. 4:3: RATIFICATION OF EYEY’s APPOINTMENT AS INDEPENDENT ACCOUNTANTS FOR FISCAL 20182021 Voting Choices and Board Recommendation: o● | vote in favor of the ratification; | | ● | | o | vote against the ratification; or | | ● | | o | abstain from voting on the ratification. |
The Board recommends a voteFORthe ratification. PROPOSAL NO. 4: APPROVAL OF THE AMENDMENT TO THE ASDA SHARESAVE PLAN 2000 Voting Choices and Board Recommendation: | ● | vote in favor of the amendment to the ASDA Sharesave Plan 2000; | | ● | vote against the amendment to the ASDA Sharesave Plan 2000; or | | ● | abstain from voting on the amendment to the ASDA Sharesave Plan 2000. |
The Board recommends a voteFORthe amendment to the ASDA Sharesave Plan 2000.
Table of Contents Annual Meeting Information PROPOSAL NOS. 5-7:5-8: SHAREHOLDER PROPOSALS APPEARING IN THIS PROXY STATEMENT IF PROPERLY PRESENTED AT THE MEETING Voting Choices and Board Recommendation: o● | vote in favor of each shareholder proposal; | | ● | | o | vote against each shareholder proposal; | | ● | | o | vote in favor of one or more shareholder proposals; | | ● | | o | vote against one or more shareholder proposals; |
o● | abstain from voting on one or more shareholder proposals; or | | ● | | o | abstain from voting on all shareholder proposals. |
The Board recommends a voteAGAINSTeach of the shareholder proposals. Who counts the votes? Are my votes confidential? Broadridge will count the votes. The Board has appointed two employees of Broadridge as the inspectors of election. Your proxy card or ballot and voting recordsinstructions (including with respect to votesproxies cast by phone, or mobile device, or over the internet) will not be disclosed unless the law requires disclosure, you request disclosure, or your vote is cast in a contested election.election (a “contested election” is explained in more detail below). If you write comments on your proxy card or ballot, your comments will be provided to Walmart by Broadridge, but how you voted will remain confidential. What is the quorum requirement for holding the 2017 Annual Shareholders’ Meeting?
The holders of a majority of the Shares outstanding and entitled to vote as of the record date for the meeting must be present in person or represented by proxy for business to be transacted at the meeting.
What vote is required to elect a director at the 20172020 Annual Shareholders’ Meeting? To be elected in an “uncontested election” of directors, which under our Bylaws is an election in which the number of nominees for director is not greater than the number of directors to be elected, a director nominee must receive affirmative votes representing a majority of the votes cast by the holders of Shares present in personat the scheduled time or represented by proxy atduring the meeting and entitled to vote on the election of directors (a “majority vote”). To be elected in a “contested election” of directors, which our Bylaws define as an election in which the number of nominees for director is greater than the number of directors to be elected, a director nominee must receive a plurality of the votes of the holders of Shares present in personat the scheduled time or represented by proxy at the meeting and entitled to vote on the election of directors. We expect the election of directors at the 20172020 Annual Shareholders’ Meeting to be an uncontested election. What happens if a director nominee fails to receive a majority vote in an uncontested election at the 2017 AnnualShareholders’2020 Annual Shareholders’ Meeting? Any incumbent director who is a director nominee and who does not receive a majority voteof the votes cast must promptly tender his or her offer of resignation as a director for consideration by the Board. Each director standing for reelectionre-election at the 20172020 Annual Shareholders’ Meeting has agreed to resign, effective upon acceptance of such resignation by the Board, if he or she does not receive a majority
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vote. of the votes cast. The Board must accept or reject suchthe resignation within 90 days following certification of the shareholder vote in accordance with the procedures established by the Bylaws.
If a director’s resignation offer is not accepted by the Board, that director will continue to serve until our company’s next Annual Shareholders’ Meetingannual shareholders’ meeting and his or her successor is duly elected and qualified or until the director’s earlier death, resignation, or removal. Any director nominee who is not an incumbent director and who fails to receive a majority voteof the votes cast in an uncontested election will not be elected as a director, and a vacancy will be left on the Board. The Board, in its sole discretion, may either fill a vacancy resulting from a director nominee not receiving a majority voteof the votes cast pursuant to the Bylaws or decrease the size of the Board to eliminate the vacancy. What vote is required to pass the other proposals at the 20172020 Annual Shareholders’ Meeting? At any meeting at which a quorum has been established, the affirmative vote of the holders of a majority of the Shares present in personat the scheduled time or represented by proxy at the meeting and entitled to vote on the proposal at issue is required for: (i) | ● | the adoption of the non-binding, advisory resolution to approve the compensation of our NEOs (Proposal No. 2); | | ● | the ratification of the appointment of EY as Walmart’s independent accountants for fiscal 2021 (Proposal No. 3); |
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Table of the non-binding, advisory vote regarding the frequency of future advisory votes to approve compensation of our NEOs; (ii) the adoption of the non-binding, advisory resolution to approve the compensation of our NEOs; (iii) the ratification of the appointment of EY as Walmart’s independent accountants for fiscal 2017; (iv) the adoption of each of the shareholder proposals; and (v) any other matters properly presented at the meeting. For the non-binding vote regarding the frequency of future advisory votes to approve the compensation of our NEOs, if none of the four alternatives receives a majority vote of the shares present in person or represented by proxy at the meeting and entitled to vote, then the alternative receiving a plurality of the votes cast by the holders of Shares present in person or represented by proxy at the meeting and entitled to vote on the proposal will be deemed the preferred alternative of our shareholders. Contents Annual Meeting Information | ● | the approval of an amendment to the ASDA Sharesave Plan 2000 (Proposal No. 4); | | ● | the approval of each of the shareholder proposals, in each case, if properly presented at the meeting (Proposal Nos. 5-8); and | | ● | any other matters properly presented during the meeting. |
What is the effect of an “abstention” or a “broker non-vote” on the proposals to be voted on at the 20172020 Annual Shareholders’Meeting?Shareholders’ Meeting? Abstentions.A Share proxy or ballot marked “abstain” with respect to any proposal is considered as present and entitled to vote with respect to that proposal, but is not considered a vote cast with respect to that proposal. Therefore, an abstention will not have any effect on the election of directors. Because each of the other proposals requires the affirmative vote of the holders of a majority of the Shares present and entitled to vote on each such proposal, an abstention will have the effect of a vote against each of the other proposals. Broker Non-Votes.A “broker non-vote” occurs if your Shares are not registered in your name (that is, if you hold your Shares in “street name”) and you do not provide the record holder of your Shares (usually a bank, broker, or other nominee) with voting instructions on any matter as to which, under the NYSE rules for member organizations (such as brokers), a broker may not vote without instructions from you, but the broker nevertheless provides a proxy for your Shares. Shares as to which a broker non-vote occurs are considered present for purposes of determining whether a quorum exists, but are not considered “votes cast” or Shares “entitled to vote” with respect to a voting matter. Therefore, a broker non-vote will not have any effect on the outcome of the proposals. Under the NYSE rules for member organizations: (i) the election of directors; (ii) the non-binding, advisory vote regarding the frequency of future advisory votes to approve the compensation; (iii) the non-binding, advisory vote to approve the compensation of our NEOs; and (iv) each of the shareholder proposals described in this proxy statement are notorganizations, matters on which a broker may not vote without your instructions. instructions are: | ● | the election of directors; | | ● | the non-binding, advisory vote to approve the compensation of our NEOs; | | ● | the approval of the amendment to the ASDA Sharesave Plan 2000; and | | ● | each of the shareholder proposals described in this proxy statement. |
Therefore, if your Shares are not registered in your name and you do not provide instructions to the record holder of your Shares regarding these proposals,Proposal Nos. 1, 2, 4, and 5-8, a broker non-vote as to your Shares will result with respect to these proposals. The ratification of the appointment of independent accountants is a routine item under the NYSE rules for member organizations. As a result, brokers who do not receive instructions from you as to how to vote on that matterProposal No. 3 generally may vote your Shares on that matter in their discretion. If your Shares are held of record by a bank, broker, or other nominee, we urge you to give instructions to your bank, broker, or other nominee as to how you wish your Shares to be voted so you may participate in the shareholder voting on these important matters. What if I do not specify a choice for a proposal when returning a proxy or a voting instruction form? We urge all shareholders to express their choices on each voting matter described on the proxy card or the voting instruction form, (whichwhich you will receive from your broker, bank, or other nominee, if your Shares are held in “street name”). Shares Owned by Record Holders.If you are a record owner of Shares and you sign and return a proxy card, unless you indicate otherwise, the persons named as proxies on the proxy card will vote your Shares: (i)FORthe election of each of the nominees for director named in this proxy statement; (ii) to hold future advisory votes to approve the compensation of our NEOs every1 YEARFOR; (iii)FORthe non-binding advisory resolution to approve the compensation of our NEOs; (iv)(iii)FORthe ratification of the appointment of EY as Walmart’s independent accountants for fiscal 2018;2021; (iv)FORthe amendment to the ASDA Sharesave Plan 2000; and (v)AGAINSTeach of the shareholder proposals appearing in this proxy statement.statement, in each case, if properly presented at the meeting. For any other business
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or matters properly presented at the 20172020 Annual Shareholders’ Meeting, the persons named as proxies on the proxy card shall vote in their discretion.
Table of Contents Annual Meeting Information Shares Held in “Street Name” by Beneficial Owners.If you are a beneficial owner of Shares held in “street name” and you sign and return a voting instruction form to your bank, broker, or other nominee (in accordance with the voting instructions provided by such bank, broker, or other nominee), but do not provide instructions regarding how you wish your Shares to be voted on each of the voting matters described in this proxy statement, as more specifically discussed in the answer to the immediately preceding question above,then a “broker non-vote” will result with respect to your Shares regarding the election of each of the nominees for director named in this proxy statement; the non-binding, advisory vote on the frequency of future advisory votes to approve the compensation of our NEOs; the non-binding, advisory resolution to approve the compensation of our NEOs; each of the shareholder proposals appearing in this proxy statement; and any other matters properly presented at the meeting. regarding: | ● | the election of each of the nominees for director named in this proxy statement; | | ● | the non-binding, advisory resolution to approve the compensation of our NEOs; | | ● | the amendment to the ASDA Sharesave Plan 2000; | | ● | each of the shareholder proposals appearing in this proxy statement; and | | ● | any other matters properly presented at the meeting. |
Banks, brokers, and other nominees who do not receive instructions from you regarding the ratification of the appointment of independent accountants may generally vote on that matter in their discretion. I completed and returned my proxy card, but I have changed my mind about how I want to vote. Can I revoke my proxy and change my vote? Yes, if you are a record holder, you may revoke a previously submitted proxy and change your vote by: o● | delivering a written notice of revocation to Walmart’s Corporate Secretary at 702 Southwest 8thStreet, Bentonville, AR 72716-0215 before the polls close for voting atduring the 20172020 Annual Shareholders’ Meeting; |
o● | signing a proxy bearing a later date than the proxy being revoked and delivering it to Walmart’s Corporate Secretary at the address provided in the Notice of 20172020 Annual Shareholders’ Meeting included in this proxy statement before the polls close for voting atduring the 20172020 Annual Shareholders’ Meeting; | | ● | submitting a proxy bearing a later date via the internet (i.e., before the meeting viawww.proxyvote.com) or by telephone not later than 11:59 p.m. Eastern Time on June 2, 2020; or |
o● | voting your Shares while logged in person atand participating in the 20172020 Annual Shareholders’ Meeting. |
If your Shares are held in street name through a broker, bank, or other nominee, you should contact the record holder of your Shares regarding how to revoke your voting instructions. Proxy Materials
Why did I receive a notice regarding the internet availability of the proxy materials instead of a paper copy of the proxy materials? Important Notice Regarding the Availability of Proxy Materials for the 20172020 Annual Shareholders’ Meeting to be held on Wednesday, June 2, 2017.3, 2020.This year, we are again taking advantage of the SEC’s rules of the SEC that allow us to furnish our proxy materials over the internet. As a result, we are mailing to many of our shareholders a notice of internet availability of the proxy materials, on the internet, rather than a full paper set of the proxy materials, to many of our shareholders. materials. This notice of internet availability includes instructions on how to access our proxy materials on the internet, as well as instructions on how shareholders may obtain a paper copy of the proxy materials by mail or a printable copy electronically. Shareholders who have affirmatively requested electronic delivery of our proxy materials will receive instructions via email regarding how to access these materials electronically. All other shareholders, including shareholders who have previously requested to receive a paper copy of the materials, will receive a full paper set of the proxy materials by mail. This distribution process will contribute to our sustainability efforts and will reduce the costs of printing and distributing our proxy materials. How can I access the proxy materials over the internet? Can I elect to receive proxy materials for future annual meetings electronically? How can I request a paper copy of the proxy materials? Accessing the Proxy Materials on the Internet.You can access the proxy statement and the Annual Report to Shareholders in the “Investors” section of Walmart’s corporate website athttp://stock.walmart.com/annual-reports. In accordance with the SEC’s rules, of the SEC, we do not use software that identifies visitors accessing our proxy materials on our website. | 106 | | www.walmart.com |
Table of Contents Annual Meeting Information Electing to Receive Proxy Materials for Future Annual Shareholders’ Meetings Electronically.If you wish to join in Walmart’s sustainability efforts, you can instruct Walmart to deliver its proxy materials for future annual shareholders’ meetings to you electronically by email. If you choose to access future proxy materials electronically, you will receive an email with instructions containing a link to the website where those materials are available and a link to the proxy voting website. Your election to access proxy materials electronically will remain in effect until you terminate it. You may choose this method of delivery in the “Investors” section of Walmart’s corporate website athttp://stock.walmart.com/annual-reports.
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Obtaining a Paper Copy of the Proxy Materials.If you received a notice regarding the internet availability of the proxy materials, then you will find instructions about how to obtain a paper copy of the proxy materials and the Annual Report to Shareholders in your notice. If you received an email notification as to the availability of the proxy materials, then you will find instructions about how to obtain a paper copy of the proxy materials and the Annual Report to Shareholders as part of that email notification. We will mail a paper copy of the proxy materials and the Annual Report to Shareholders to all shareholders to whom we do not send a notice of availability or an email notification regarding the internet availability of the proxy materials. What should I do if I receive more than one notice of, or email notification about, the internet availability of the proxy materials or more than one paper copy of the proxy materials? Some shareholders may receive more than one notice of internet availability, more than one email notification, or more than one paper copy of the proxy materials, including multiple proxy cards. For example, if you hold your Shares in more than one brokerage account, then you may receive a separate notice of internet availability, a separate email notification, or a separate voting instruction form for each brokerage account in which you hold Shares. If you are a shareholder of record and your Shares are registered in more than one name, then you may receive a separate notice of internet availability, a separate email notification, or a separate set of paper proxy materials and proxy card for each name in which you hold Shares. To vote all of your Shares, you must complete, sign, date, and return each proxy card you receive or submit a proxy to vote the Shares to which each proxy card relates by telephone, internet, or mobile device as described above, or vote online and while logged in personduring as described above. If you have Shares held in one or more “street names,” then you must complete, sign, date, and return to each bank, broker, or other nominee through which you hold Shares each voting instruction form received from that bank, broker, or other nominee (or obtain a proxy from each such nominee holder if you wish to vote in person at the 20172020 Annual Shareholders’ Meeting). What is householding, and how can I opt-outenroll or enroll? opt-out? If you are a beneficial owner of Shares, your bank, broker, or other nominee may deliver a single set of proxy materials to any household at which two or more shareholders reside unless contrary instructions have been received from you. This procedure, referred to as householding, reduces the volume of duplicate materials shareholders receive and reduces mailing expenses. Shareholders may revoke their consent to future householding mailings or enroll in householding by contacting their bank, broker, or other nominee. Alternatively, if you wish to receive a separate set of proxy materials for the 20172020 Annual Shareholders’ Meeting or future shareholders’ meetings, we will deliver them promptly upon request made by contacting the Global Investor Relations team by any of the means described on page 3431 above. When will the company announce the voting results? We will announce the outcome of each proposal voted on at the 2017 Annual Shareholders’ Meeting at the conclusion of that meeting. We willexpect to report the preliminary voting results in a press release on or beforethe afternoon of June 5, 2017,3, 2020, which will be available on our corporate website, and wewebsite. We will report the official voting results in a filing with the SEC on or before June 8, 2017.9, 2020.
Table of Contents Submission of Shareholder Proposals for the 2018 Annual Shareholders’ Meeting Information
| Shareholder Submissions for the 2021 Annual Shareholders’ Meeting |
If you wish to submit a shareholder proposal or nomination for possible inclusion in our proxy statement relating to our 20182021 Annual Shareholders’ Meeting, send the proposal or nomination, by registered, certified, or express mail to: Gordon Y. Allison,
Senior Vice President, Office of the Corporate Secretary, Chief Counsel for Finance and General Counsel,
Corporate DivisionGovernance
Wal-Mart Stores,Walmart Inc.
702 Southwest 8thStreet
Bentonville, Arkansas 72716-0215 Shareholder proposals intended for inclusion in our proxy statement for the 2018 Annual Shareholders’ Meeting must be received by the company no later than the close of business on December 21, 2017. Any shareholder proposal, other business, or nomination received by the company after thatthe applicable date will not be included in the company’s proxy statement or on the agenda relating to the 2018 Annual Shareholders’ Meeting. Further, all proposals submitted for inclusion in the company’s proxy statement relating to the 2018 Annual Shareholders’ Meeting must comply with all of the requirements of SEC Rule 14a-8.
Shareholders who wish to bring business before Walmart’s 2018 Annual Shareholders’ Meeting, other than through a shareholder proposal under SEC rules, or nominate a person for election as a director, must notify the Corporate Secretary of our
Annual Meeting Information • Walmart | 2017 Proxy Statement107such annual shareholders’ meeting.
Submissions for inclusion in our 2021 proxy materials
relating to our 2021 Annual Shareholders’ Meeting* | Must be delivered to or mailed and received at the
company’s principal executive offices: | | Nomination of one or more director nominees submitted under the proxy access provision of our Bylaws | no earlier than close of business on November 24, 2020** and no later than close of business on December 24, 2020** | | Shareholder proposals submitted under applicable SEC rules | no later than close of business on December 24, 2020 |
| * | Shareholder proposals submitted for inclusion in the company’s proxy statement relating to an annual shareholders’ meeting must comply with all requirements of SEC Rule 14a-8. Nomination of a director nominee to be included in the company’s proxy statement under the proxy access provision of our Bylaws must comply with all of the requirements of our Bylaws. | | ** | Assumes this proxy statement is first released to shareholders on April 23, 2020. Under our Bylaws, if the date of the 2021 Annual Shareholders’ Meeting is more than 30 days before, or more than 60 days after June 3, 2021, then notice must be delivered to or mailed and received at Walmart’s principal executive offices not more than 150 days prior to the date of the 2021 Annual Shareholders’ Meeting nor less than the later of: (i) 120 days prior to the date of the 2021 Annual Shareholders’ Meeting; or (ii) the tenth day following the day on which a public announcement of the 2021 Annual Shareholders’ Meeting is made. |
Other business or nominations to be considered at our
2021 Annual Shareholders’ Meeting* | Must be delivered to or mailed and received at the
company’s principal executive offices: | | Any other nomination or other business submitted for consideration at our 2021 Annual Shareholders’ Meeting but not submitted for inclusion in our proxy materials under our Bylaws or applicable SEC rules | no earlier than close of business on February 3, 2021** and no later than close of business on March 5, 2021** |
| * | Each such submission or nomination must comply with the requirements of the applicable provisions of our Bylaws. | | ** | Assumes the 2020 Annual Shareholders’ Meeting is held on June 3, 2020. Under our Bylaws, if the date of the 2021 Annual Shareholders’ Meeting is held more than 30 days before, or more than 60 days after June 3, 2021, then notice must be delivered to or mailed and received at Walmart’s principal executive offices not more than 120 days prior to the date of the 2021 Annual Shareholders’ Meeting nor less than the later of: (i) 90 days prior to the date of the 2021 Annual Shareholders’ Meeting; or (ii) the tenth day following the day on which a public announcement of the 2021 Annual Shareholders’ Meeting is made. |
company in writing and provideTo review the information required by the provision of our Bylaws dealing with business at annual and special meetings.
Under our Bylaws, theapplicable notice must be delivered to or mailed and received at Walmart’s principal executive offices not less than 90 nor more than 120 days prior to the one-year anniversary of the 2017 Annual Shareholders’ Meeting. If the 2017 Annual Shareholders’ Meeting is held on June 2, 2017, then such notice must be received no later than March 4, 2018, and no earlier than February 2, 2018. If the date of the 2018 Annual Shareholders’ Meeting is more than 30 days before, or more than 60 days after the anniversary date, then notice must be received at Walmart’s principal executive offices not more than 120 days prior to the date of the 2018 Annual Shareholders’ Meeting nor less than the later of 90 days prior to the date of the 2018 Annual Shareholders’ Meeting or the tenth day following the day on which a public announcement of the 2018 Annual Shareholders’ Meeting is made.
The notice requirements are contained in our Bylaws, a copy of which can be found onvisit our corporate website athttp://stock.walmart.com/investors/corporate-governance/governance-documents. The Board periodically reviews the Bylaws and approves amendments as it deems appropriate. Any amendments to the Bylaws will be reported in a filing with the SEC, as required by Form 8-K, and the amended Bylaws will be filed as an exhibit to an SEC filing and posted on our corporate website at the web address above.
Other Matters
There are no otherOur company is not aware of any matters the Board intends to present for actionthat will be considered at the 2017 Annual Shareholders’ Meeting. However, the company has been notified that a shareholder intends to present a proposal at the 20172020 Annual Shareholders’ Meeting concerning annual reporting of certain additional demographic information about our full- and part-time associatesother than the matters described in Walmart U.S. If this proposal is properly presented at the 2017 Annual Shareholders‘ Meeting, the persons named as proxies in the accompanying form of proxy have informed the company that they intend to exercise their discretionary authority to vote against the proposal.statement. If any other matter is properly presented at the 20172020 Annual Shareholders’ Meeting, the persons named in the form of proxy will vote on such matters in accordance in their discretion. The proxies also have discretionary authority to vote to adjourn the 20172020 Annual Shareholders‘Shareholders’ Meeting, including for the purpose of soliciting votes in accordance with our Board’s recommendations.
108Walmart | 2017 Proxy Statement • Annual Meeting Information
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Table of Contents Table of Abbreviations The following abbreviations are used for certain terms that appear in this proxy statement: statement (except in Annex B where such defined terms have the meanings ascribed to them in Annex B): 2016 ASPP or Associate StockPurchase Plan | the Wal-Mart Stores, Inc. 2016 Associate Stock Purchase Plan, as amended and restated effective April 1,2016 and approved by shareholders on June 3, 2016 | | 401(k) Plan | | the Walmart 401(k) Plan | | Annual Report to Shareholders | | Walmart’s Annual Report to Shareholders for fiscal 20172020 | | Associate or associate | | an employee of Walmart or one of its consolidated subsidiaries | | Associate Stock Purchase Plan | | the Walmart Inc. 2016 Associate Stock Purchase Plan, as amended effective February 1, 2018 | | Audit Committee | | the Audit Committee of the Board | | Board | | the Board of Directors of Walmart | | Board committees | | the Audit Committee, the CMDC, the Executive Committee, the Global Compensation Committee, theNGC, the SPFC, and the TeCC | | Broadridge | | Broadridge Financial Solutions, Inc., representatives of which will serve as the inspectors of election atthe 20172020 Annual Shareholders’ Meeting | | Bylaws | | the amended and restated Bylaws of Walmart, effective as of June 5, 2014July 23, 2019 | | CD&A | | the Compensation Discussion and Analysis included in this proxy statement | | CEO | | the Chief Executive Officer of a company | | CFO | | the Chief Financial Officer of a company | | CMDC | | the Compensation and Management Development Committee of the Board | | Deferred Compensation Matching Planor DCMP | | the Wal-Mart Stores,Walmart Inc. Deferred Compensation Matching Plan, as adoptedamended effective as of February 1, 2012,2019, and which replaced the Officer Deferred Compensation Plan | | Director Compensation Deferral Plan | | the Wal-Mart Stores,Walmart Inc. Director Compensation Deferral Plan, as amended effective June 4, 2010as of February 1, 2018 | | EPS | | Diluted earnings per share from continuing operations attributable to Walmart | | Exchange Act | | the Securities Exchange Act of 1934, as amended | | Executive Committee | | the Executive Committee of the Board | | Executive Officers | | those senior officers of our company determined by the Board to be executive officers (as defined byRule 3b-7 under the Exchange Act) as to whom Walmart has certain disclosure obligations and who mustreportmust report certain transactions in equity securities of our company under Section 16 | | EY | | Ernst & Young LLP, an independent registered public accounting firm | | FCPA | | the Foreign Corrupt Practices Act | | Fiscal or fiscal [year] | | Walmart’s fiscal year ending January 31st | | GAAP | | generally accepted accounting principles in effect in the United States | Global Compensation Committee or GCC | the Global Compensation Committee of the Board |
Table of Abbreviations • Walmart | 2017 Proxy Statement 109
| Independent Directors | This | this applies to Walmart directors whom the Board has affirmatively determined have no materialrelationships with our company pursuant to NYSE Listed Company Rules. This also applies to AuditCommitteeAudit Committee members who meet the requirements of Section 10A of the Exchange Act and Rule 10A-3under10A-3 under the Exchange Act. Additionally, CMDC members who meet the requirements of Section 10C oftheof the Exchange Act, Rule 10C-1 under the Exchange Act and the heightened independence requirementsunderrequirements under the NYSE Listed Company Rules for compensation committee members are consideredindependent.considered independent. | | Internal Revenue Code | | the Internal Revenue Code of 1986, as amended | | Jet.com | | Jet.com, Inc., which was acquired by the company on September 19, 2016 | | Management Incentive Plan or MIP | | the Wal-Mart Stores,Walmart Inc. Management Incentive Plan, as amended effective February 1, 20132018 |
Table of Contents Table of Abbreviations | Named Executive Officer or NEO | | Walmart’s President and CEO, Walmart’s CFO, and the next three most highly compensated Executive Officers otherthan our CEO and CFO, and the Executive Vice President, President and CEO, Walmart U.S., whom Walmart is voluntarily including as an NEO in this proxy statement | | NGC | | the Nominating and Governance Committee of the Board | | NYSE | | the New York Stock Exchange | | NYSE Listed Company Rules | | the NYSE’s rules for companies with securities listed for trading on the NYSE, including the continuallisting requirements and rules and policies on matters such as corporate governance, shareholdercommunication,shareholder communication, and shareholder approval | | Officer Deferred Compensation Plan orODCP | | the Wal-Mart Stores, Inc. Officer Deferred Compensation Plan, amended and restated effectiveJanuary 1, 2009, and which was replaced by the Deferred Compensation Matching Plan, effective on February 1, 2012 with the Deferred CompensationMatching Plan | | Outside Directors or Non-ManagementDirectors | | the members of the Board who are not employed by Walmart or a consolidated subsidiary of Walmart | | PCAOB | | the Public Company Accounting Oversight Board | | Return on Investment or ROI | | our return on investment, calculated as described in Annex A to this proxy statement | | SEC | | the United States Securities and Exchange Commission | | Section 16 | | Section 16 of the Exchange Act | | SERP | | the Wal-Mart Stores, Inc. Supplemental Executive Retirement Plan, as amended and restated effectiveJanuary 1, 2009, which was replaced by the Deferred Compensation Matching Plan, effective February 1, 2012 with the Deferred CompensationMatching Plan | | Share or Shares | | a share or shares of Walmart common stock, $0.10 par value per share | | SOX | | the Sarbanes-Oxley Act of 2002 | | SPFC | | the Strategic Planning and Finance Committee of the Board | | Stock Incentive Plan | | the Wal-Mart Stores,Walmart Inc. Stock Incentive Plan of 2015, as amended and restated in certain immaterialrespects effective as of February 1, 2017, by action of the Board2018 | | TeCC | | the Technology and eCommerce Committee of the Board | | TSR | | total shareholder return | | Walmart, our company, the company, we,our, or us | Wal-Mart Stores, | Walmart Inc., a Delaware corporation (formerly Wal-Mart Stores, Inc.) and, where the context requires, its consolidatedsubsidiaries |
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110Walmart | 2017 Proxy Statement • Table of AbbreviationsContents
Annex A | Non-GAAP Financial Measures |
Annex A
Information Regarding Certain Non-GAAP Financial Measures
Certain financial measures discussed inunder the captions “Fiscal 2020 Highlights—Strategy and Performance and Executive Compensation—Compensation Discussion and Analysis—Executive Summary section ofAnalysis” in this proxy statement are considered non-GAAP financial measures under the SEC’s rules because they are calculated by excluding or including amounts that would beare included or excluded in the calculation of comparable measures calculated and presented in accordance with GAAP. Below (except as otherwise noted), we identify: | ● | ○ | thoseeach non-GAAP financial measures (themeasure discussed in this proxy statement (collectively, the “Non-GAAP Measures”) and tell you briefly describe how we compute them;calculate such Non-GAAP Measure; |
| ○● | the financial measure calculated and presented in accordance with GAAP or using only measures calculated and presented in accordance with GAAP that we believe is the most directly comparable such financial measure to each Non-GAAP Measure (each, a “Comparable GAAP Measure”); |
| ● | ○ | the reasons why we think theeach Non-GAAP Measures provideMeasure provides our shareholders with useful information about our financial condition and results of operations; and |
| ○● | a reconciliation of each Non-GAAP Measure with its Comparable GAAP Measure. |
When we refer below to a financial measure as being a “reported” financial measure, we are referring to a GAAP financial measure that was presentedcalculated in accordance with GAAP and reflected in our consolidated statement of income for fiscal 2017.2020. Adjusted EPS Our diluted earnings per share from continuing operations attributable to Walmart (which we refer to as our “EPS”) areis calculated and presented in accordance with GAAP and areis based on our consolidated net income from continuing operations attributable to Walmart. At times, the company may believe thatWalmart as reflected in our EPS for a period does not reflect our core performance, typically becauseconsolidated statement of certain expenses or benefits that the company incurs in that period. Our EPS for fiscal 2017 was such an instance, and we calculated an adjusted diluted earnings per share amount for fiscal 2016. income. Non-GAAP Measure:Measure: The company’s adjusted diluted earnings per share from continuing operations attributable to WalmartEPS (which we refer to as “Adjusted EPS”) for fiscal 20172020 was calculated by adjusting the EPS for fiscal 2017 for2020 by the amount of the per share dilutivenet impact of: (1) the gain on the sale of Yihaodian in China that was recognized and reported in the fiscal quarter ended July 31, 2016 (the “Yihaodian Gain); and (2) expenses incurred in connection with discontinued real estate projects in the United States and severance for fiscal 2017 (the “U.S. Real Estate Items”). Comparable GAAP Measure:The company’sour EPS for fiscal 20172020 of: (1) unrealized gains and losses on the company’s equity investment in JD.com; (2) a tax benefit on the revaluation of deferred tax liabilities as reported.
a result of an income tax rate reduction in India; (3) certain income tax matters; and (4) certain business restructuring charges which primarily includes non-cash impairment charges on certain trade names and other long-lived assets. Comparable GAAP Measure: The company’s reported EPS for fiscal 2020. Why the Non-GAAP Measure is Useful Information:Information: Management believes that the Adjusted EPS for fiscal 20172020, which adjusts EPS for the items described above, is a meaningful metric to share with shareholders because that metric, which adjusts EPSit best allows investors to compare core earnings performance for fiscal 20172020 with our earnings performance for the items described above, is the metric thatprior comparable periods. In addition, Adjusted EPS affords investors a view of what management considers the company’s core earnings performance for fiscal 20172020 and also affords investors the ability to make a more informed assessment of such core earnings performance. performance with that of the prior year. Reconciliations:Reconciliation: Reconciliation of the company’s EPS for fiscal 2020 to the company’s Adjusted EPS for fiscal 2017 to the company’s EPS for fiscal 2017.2020.
Table of Contents Annex A • Walmart | 2017 Proxy Statement111
Adjusted EPS - Fiscal 2017 2020 | | Fiscal Year Ended January 31, 20172020 | Reported EPS for Fiscal 20172020 | | $5.19 |
| Adjustments: | | Pre-Tax
Impact | | Tax
Impact(1),(5) | | NCI
Impact(2) | | Net
Impact | | Unrealized (gains) and losses on JD.com investment | | $ | (0.65 | ) | | $ | 0.14 | | | — | | | $ | (0.51 | ) | | Business restructuring charges(4) | | | 0.30 | | | | (0.08 | ) | | (0.01 | ) | | | 0.21 | | | Tax benefit from income tax rate reduction in India | | | — | | | | (0.14 | ) | | 0.03 | | | | (0.11 | ) | | Certain income tax matters(3) | | | 0.01 | | | | 0.14 | | | — | | | | 0.15 | | | Net Adjustments | | | | | | | | | | | | | $ | (0.26 | ) | | Adjusted EPS for Fiscal 2020 | | | | | | | | | | | | | $ | 4.93 | |
| (1) | $Calculated based on nature of item, including any realizable deductions, and statutory rate in effect for relevant jurisdiction. | 4.38(2) | Calculated based on the ownership percentages of our noncontrolling interests. | | (3) | Represents a charge related to certain income tax matters and accrued interest unrelated to current period operations. | | (4) | Business restructuring charges primarily consists of non-cash impairment charges for certain trade names, acquired developed technology, and property and equipment due to decisions that resulted in the write-off of certain assets in Walmart U.S. and Walmart International, including non-cash impairment charges on the Jabong.com trade name during the three months ended October 31, 2019. | | (5) | The reported effective tax rate was 24.4% for the fiscal year ended January 31, 2020. When adjusted for the above items, the effective tax rate was 24.7% for the fiscal year ended January 31, 2020. |
| | | Pre-Tax Impact | | Tax Impact of | | Net Adjustment for such Item | | | | of Item on EPS | | Item on EPS | | to Calculate Adjusted EPS | | Adjustments: | | for Fiscal 2017 | | for Fiscal 2017 | | for Fiscal 2017 | | Yihaodian Gain | | $0.17 | | ($0.03) | | ($0.14) | | U.S. Real Estate Items | | (0.12) | | 0.04 | | 0.08 | | Net Adjustments | | | | | | ($0.06) | | Adjusted EPS for Fiscal 2017 | | | | | | $4.32 |
Growth of Total Company Sales on a Constant Currency MeasuresBasis We useThe growth of total company sales on a constant currency exchange ratesbasis in effect during a period to convert that period’s operating resultsfiscal 2020 over fiscal 2019 reflects growth in our total net sales for allfiscal 2020 calculated by translating into U.S. dollars the net sales of the countries wherein which the functional currency is not the U.S. dollar (a “Foreign Currency”) into U.S. dollarsor for financial reporting purposes. A constant currency measure is onecountries experiencing hyperinflation. We calculate the effect of changes in which we calculate a financial measure, such as revenue or operating income, for a period by translating that period’s activity in a Foreign Currency into U.S. dollars by using the currency exchange rates we had used to translateas the prior year comparable
period’sdifference between current period activity in a Foreign Currency into U.S. dollars rather than bytranslated using the current period’s currency exchange rates to make that translation. A reconciliation of each of thoseand the comparable prior year period’s currency exchange rates. Additionally, no currency exchange rate fluctuations are calculated for non-U.S. dollar acquisitions until owned for 12 months.
Non-GAAP Measures: The percentage growth in total company sales for fiscal 2020 calculated and presented on a constant currency financial measures to its basis for fiscal 2020 over total company sales for fiscal 2019 (calculated and presented in accordance with GAAP). Comparable GAAP Measures: The percentage growth in total company sales for fiscal 2020 over total company sales for fiscal 2019, in each case, calculated and presented in accordance with GAAP. Why the Non-GAAP Measure appearsIs Useful Information: Management believes that the percentage growth in total company sales on a constant currency basis for fiscal 2020 over fiscal 2019 calculated and presented in accordance with GAAP allows shareholders to better understand Walmart’s underlying year-over-year sales growth without the effects of currency exchange rate fluctuations. Reconciliation: Reconciliation of the percentage increase in our earnings releaseconsolidated net sales for the fourth quarterfiscal 2020 (as reported) from our consolidated net sales for fiscal 2019 (as reported) to our constant currency consolidated net sales for fiscal 2020 from our consolidated net sales for fiscal 2019 (as reported). | | Fiscal Year Ended
January 31, 2020 | | | (in millions) | | Percent
Change(1) | | Consolidated net sales (as reported) | | $519,926 | | 1.9% | | Currency exchange rate fluctuations | | $4,137 | | | | Constant currency consolidated net sales | | $524,063 | | 2.7% |
| (1) | Calculated versus fiscal 2019 consolidated net sales (as reported) |
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Table of fiscal 2017, which is available on our website athttp://stock.walmart.com and on the SEC’s EDGAR system at www.sec.gov.
Contents
Annex A Other Non-GAAP Financial Measures The company usesused the following performance metrics to determine whether it will make payments under the awards outstanding under its annual cash incentive plan and the amount of any such payments and whether payouts will be made under itsthe outstanding long-term performance equity incentive planheld by our NEOs and the amount of any payouts.such payouts to our NEOs. The following performance metrics, in each case as calculated for incentive plan purposes, are considered non-GAAP financial measures: Non-GAAP Measures (collectively, the “Non-GAAP Performance Metrics”): | ● | ○ | our return on investment (which we refer to as our “ROI”); |
| ○ | our constant currency total company operating income;income (excluding certain items); |
| ● | ○operating income of our Walmart U.S. segment (excluding certain items); | | ● | operating income of our Sam’s Club segment (excluding certain items); | | ● | constant currency operating income of our Walmart International operating income;segment (excluding certain items); |
| ● | ○ | our constant currency total company sales (excluding fuel)certain items); and |
| ● | ○sales of our Walmart U.S. segment (excluding certain items); | | ● | sales of our Sam’s Club segment (excluding certain items); | | ● | constant currency sales of our Walmart International salessegment (excluding fuel).certain items); and | | ● | our adjusted ROI. |
Each of these non-GAAP financial measuresthe Non-GAAP Performance Metrics is adjusted by excluding certain items from the calculation of such Non-GAAP Performance Metric, as described under the caption“Executive “Executive Compensation—Compensation Discussion and Analysis—Incentive Goal Setting PhilosophyFiscal 2020 Performance Goals and Process”Performance” in thethis proxy statement.statement (the “Excluded Items”). As permitted by the SEC’s rules and guidance, with respect to the Non-GAAP Performance Metrics, we do not: | ○ | disclose the financial measures calculated and presented in accordance with GAAP that are most directly comparable to such non-GAAP financial measures; |
| ○ | disclose why we believe those non-GAAP financial measures are important information for our shareholders to have; or |
| ○ | provide a reconciliation of each of those non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP. |
not disclose: the financial measures calculated and presented in accordance with GAAP that are most directly comparable to each Non-GAAP Performance Metric; why we believe each Non-GAAP Performance Metric is important information for our shareholders to have; or provide a reconciliation of each Non-GAAP Performance Metric to the most directly comparable financial measure calculated and presented in accordance with GAAP. However, we believe it is important for our shareholders to understand how we calculated each of the non-GAAP measuresNon-GAAP Performance Metrics described above. We calculatedconstant currency total company operating income and constant currency International operating income as described abovefor incentive plan purposes by translating the as reported operating income for fiscal 20172020 of the countries in which the activity was in a Foreign Currency intofunctional currency is not the U.S. dollarsdollar or countries experiencing hyperinflation by using the currency exchange rates we had used to translate our fiscal 20162019 operating income in those countries into U.S. dollars for financial reporting purposes rather than by using the current period’s currency exchange rates to make that translation.translation and adjusting such operating income by excluding the Excluded Items. We calculated the constant currency total company sales (excluding fuel)operating income of our Walmart International segmentfor incentive plan purposes by addingtranslating the Walmart U.S. net sales as reported to the sum of (a) the constant currency International net sales (excluding fuel) calculated as described below and (b) the Sam’s Club net sales (excluding fuel)operating income for fiscal 2017, which we calculated by deducting Sam’s Club fuel sales in fiscal 2017 from Sam’s Club’s reported net sales in fiscal 2017. We calculated2020 of the constant currencycountries within our Walmart International sales (excluding fuel) by excluding all of International’s fuel sales from its reported net sales and translating the remaining balance of those sales in those countries
112Walmart | 2017 Proxy Statement • Annex A
segment in which the activity was in a Foreign Currency intofunctional currency is not the U.S. dollarsdollar or countries experiencing hyperinflation by using the currency exchange rates we had used to translate our fiscal 20162019 operating income in those countries into U.S. dollars for financial reporting purposes rather than by using the current period’s currency exchange rates to make that translation and adjusting such operating income by excluding the Excluded Items. We calculatedconstant currency total company salesfor incentive plan purposes by adding our Walmart U.S. net sales and Sam’s Club net sales to the constant currency net sales of our Walmart International segment, in each case for fiscal 2020, and adjusting the total of those net sales by excluding the Excluded Items. We calculatedconstant currency Walmart International salesby translating the net sales for fiscal 2020 of those countries within our Walmart International segment in which the functional currency is not the U.S. dollar or countries experiencing hyperinflation by using the currency exchange rates we had used to translate our fiscal 2019 net sales in those countries into U.S. dollars for financial reporting purposes rather than by using the current period’s currency exchange rates to make that translation. The other adjustments discussed undertranslation and adjusting such net sales by excluding the caption“Executive Compensation—Compensation Discussion and Analysis—Incentive Goal Setting Philosophy and Process” were also made as a part of the calculation of each non-GAAP financial measure under “—Other Non-GAAP Financial Measures.”Excluded Items. We calculatedour adjusted ROI for fiscal 20172020as adjustedour operating income (operating incomefor fiscal 2020 plus our interest income, depreciation and amortization, and rent expense)expense for fiscal 20172020 divided by average invested capital for fiscal 2017.2020. We considered average
Table of Contents Annex A invested capital for fiscal 20172020 to be the average of our beginning and ending total assets for fiscal 2017,2020, plus average accumulated depreciation and average accumulated amortization, less average accounts payable and average accrued liabilities for fiscal 2017, plus a2020. For fiscal 2020, lease related assets and associated accumulated amortization are included in the denominator at their carrying amount as of the current balance sheet date, rather than averaged, because they are no longer directly comparable to the prior year calculation which included rent factor equal to rent expense for fiscal 2017the trailing 12 months multiplied by a factor of eight.8. Further, beginning prospectively in fiscal 2020, rent expense in the numerator excludes short-term and variable lease costs as these costs are not included in the operating lease right of use asset balance. In computing the adjusted operating income component of ROI, we also made the same adjustments we made to calculate the constant currency total company operating income for purposes of our annual cash incentive calculations as described underROI, we adjusted by excluding from such components the caption “Executive Compensation—Compensation Discussion and Analysis—Incentive Goal Setting Philosophy and Process” and also made certain balance sheet adjustments when calculating our average assets and average liabilities as described under that caption.Excluded Items. Although return on investment is a standard financial measure, our calculation of ROI may differ from other companies’ calculations of their return on investment.
We calculated theoperating income and the sales (excluding certain items)of each of our Walmart U.S. segment and our Sam’s Club segment by excluding the Excluded Items.
We calculated theoperating income and the sales (excluding certain items)of our Sam’s Club segment by excluding from the operating income and net sales of our Sam’s Club segment (in each case, as reported) the Excluded Items for fiscal 2020 as appropriate for our Sam’s Club segment. We calculatedfiscal 2020 total company operating income changeby dividing our consolidated operating income for fiscal 2020 (excluding the Excluded Items) by our consolidated operating income for fiscal 2019 (excluding the Excluded Items) and subtracting 1 from the result of that division, with the remainder expressed as a percentage. We calculatedfiscal 2020 total company sales changeby dividing our consolidated net sales for fiscal 2020 (excluding the Excluded Items) by our consolidated net sales for fiscal 2019 (excluding the Excluded Items) and subtracting 1 from the result of that division, with the remainder expressed as a percentage. | A-4 | | www.walmart.com |
Table of Contents Annex A B The Rules of the ASDA Sharesave Plan 2000 |
• (incorporating amendments approved by the Board on 13 April 2004 and
approved by HMRC under Schedule 3 to ITEPA)
Original amendment to overall limit approved with effect from 5 June 2005 As amended by the Board on 29 November 2009 (to make the
term of the Sharesave Plan indefinite) and approved by
the shareholders of Walmart | 2017 Proxy Statementat an AGM on 4 June 2010
(confirmation that the Sharesave Plan remains approved under
Schedule 3 to ITEPA received from HMRC on 14 December 2009) 113As amended by the Board on 28 June 2010
(further amendment to overall limit on Shares) and approved by
the shareholders of Walmart at an AGM on 4 June 2010
(confirmation that the Sharesave Plan remains approved under
Schedule 3 to ITEPA received from HMRC on 29 July 2010)
As amended by the Board on 20 March 2015 (for general updating and to take account of
Finance Act 2013 and Finance Act 2014 changes) As amended by the Board on 5 February 2019 (for an amendment to exchange rate
provisions when calculating the Option Price, to reflect a change of Walmart’s name,
to include a cross reference at Rule 7.2(C), and to take account of changes in data protection regulations) As amended by the Board on [INSERT DATE] 2020
(further amendment to overall limit on Shares) and approved by
the shareholders of Walmart at an AGM on [3 June] 2020 HMRC were notified of this Sharesave Plan on 25 June 2015 and it is a Schedule 3 SAYE
Option Scheme with effect from and including 6 April 2014
Table of Contents Annex B Rules of the ASDA Sharesave Plan 2000 |
Contents | | Page | | 1.Definitions | | B-3 | | 2. Timing of Offers | | B-6 | | 3. Restrictions on the Grant of Options | | B-7 | | 4. Scaling Down | | B-7 | | 5. Grant of Options | | B-7 | | 6. Option Certificates | | B-7 | | 7. Rights to Exercise Options | | B-8 | | 8. Take-overs or a disposal of the Company | | B-9 | | 9. Grant of New Options | | B-10 | | 10. Exercise of Options | | B-10 | | 11. Variation of Capital | | B-11 | | 12. Winding Up | | B-11 | | 13. Administration | | B-12 | | 14. General | | B-12 | | 15. Alterations to the Sharesave Plan | | B-13 | | 16. Data Protection | | B-13 |
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Table of Contents Annex B | Rules of the ASDA Sharesave Plan 2000 |
| 1. | Definitions | | | | | | 1.1 | In these Rules the following words and expressions shall have the meaning specified against them unless the context requires otherwise | | |
| “Acquiring Company” | means a company which obtains Control of Walmart in the circumstances set out in Rule 8, | | | | | “Adoption Date” | means the date of adoption of the Sharesave Plan by the Company at a board meeting, | | | | | “Announcement Date” | means any date on which the quarterly announcement of Walmart’s results is made, | | | | | “Appropriate Authority” | means such body or bodies as are approved by the Board for the provision of SAYE Contracts under the Sharesave Plan, | | | | | “Associated Company” | means any company which, in relation to the Company or Walmart (as appropriate in the context), is an associated company as that term is defined in paragraph 47 of Schedule 3, | | | | | “Auditors” | means the auditors for the time being of the Company or if there are joint auditors, such one as the Board shall select (in each case acting as experts and not as arbitrators), | | | | | “Board” | means the Board of Directors for the time being of the Company present at a duly convened meeting of the Directors, or an appropriate committee thereof, at which a quorum is present, | | | | | “Bonus Date” | means the repayment date for an SAYE Contract in relation to a Three Year Option or a Five Year Option (as the case may be) and the “relevant Bonus Date” shall be construed accordingly, | | | | | “Business Day” | means a day on which the New York Stock Exchange is open for business, | | | | | “Company” | means ASDA Group Limited (Number 1396513), | | | | | “Control” | has the meaning set out in section 719 of ITEPA, | | | | | “Date of Grant” | means, in relation to the commencement of any SAYE Contract, the date (specified pursuant to Rule 5.1) on which an Option is granted to an Eligible Employee, | | | | | “Director” | means a Director of any member of the Group, | | | | | “Eligible Employee” | means any Employee of a Participating Company who at the Date of Grant | | | |
| | (a) | (i) | has earnings in respect of his office or employment with the Participating Company which are (or would be if there were any) general earnings to which section 15 of ITEPA applies; and | | | | | | | | | (ii) | has been an Employee for a continuous period of at least six months or such longer period not exceeding five years as the Board may specify ending on or before the Date of Grant, or | | | | | | | | (b) | is any other Employee of a Participating Company who is nominated by the Board in its discretion to participate in the Sharesave Plan, | | | | | | | and in both cases participation in the Sharesave Plan shall not be permitted by any Employee who is excluded from participation by paragraph 10 of Schedule 31, | | | |
| “Employee” | means an employee (including a full-time Director holding salaried employment or office who normally devotes to his duties 25 hours or more a week) of any member of the Group, | | | | | “Exercise Notice” | means the notice by which an Option is exercised in accordance with Rule 10.1, |
| 1 | Before 17/7/13, Eligible Employees with a “material interest” in a close company were prohibited from participating. |
Table of Contents Annex B | “Five Year Option” | means an Option linked to a five year SAYE Contract, | | | | | “Group” | means the Company and its Subsidiaries for the time being or, where the context so requires, any one or more of them, | | | | | “HMRC” | means Her Majesty’s Revenue & Customs, | | | | | “Issue or Variation” | means, in relation to Walmart, the issue of shares by way of capitalisation of profits or reserves or by way of rights issue, sub-division, consolidation of shares or reduction of share capital, | | | | | “ITEPA” | means the Income Tax (Earnings and Pensions) Act 2003, | | | | | “Key Feature” | means a provision of this Sharesave Plan which is necessary in order for the requirements of Parts 2 to 7 of Schedule 3 to be met in relation to this Sharesave Plan, | | | | | “Market Value” | has the meaning set out in Part VIII of the Taxation of Chargeable Gains Act 1992, | | | | | “Maximum Monthly Savings Contribution” | means the maximum permitted aggregate monthly savings contribution, as specified in paragraph 25 of Schedule 3 (currently £500 a month, or such other maximum amount specified from time to time in paragraph 25 of Schedule 3) or, if less, such sum (being a multiple of £1 and not less than £5) as the Board decides shall apply to every Eligible Employee in respect of any SAYE Contract entered into pursuant to an Offer, | | | | | “Minimum Monthly Savings Contribution” | means the minimum permitted monthly savings contribution, as specified in paragraph 25 of Schedule 3 (currently £5 a month, or such other minimum amount specified from time to time in paragraph 25 of Schedule 3), or such other sum as the Board decides in accordance with that paragraph in respect of any SAYE Contract entered into pursuant to an Offer, | | | | | “New Company” | means a company being either the Acquiring Company or some other company falling within paragraphs 18(b) or (c) of Schedule 3, | | | | | “New Option” | means an option granted over New Shares under Rule 9, | | | | “New Shares” | means shares in the New Company in respect of which New Options are granted by the New Company under Rule 9 and which comply with paragraphs 18 to 20 and 22 (inclusive) of Schedule 3, | | | | | “New York Stock Exchange” | means the New York Stock Exchange Inc., | | | | | “Offer” | means an invitation to apply for an Option, | | | | | “Offer Date” | means the date on which an Offer is made to an Eligible Employee in accordance with Rule 2.1, | | | | | “Offer Period” | means the period commencing on the 5th day and ending on the 28th day after an Announcement Date or such period in the event of exceptional circumstances as the Board may determine, | | | | | “Old Option” | means an Option released in exchange for a New Option under Rule 9, | | | | | “Option” | means a right to acquire (by purchase or subscription) Shares granted to an Eligible Employee in pursuance of the Sharesave Plan and for the time being subsisting or, where the context so requires, a right so to be granted, | | | | | “Option Holder” | means a person holding an Option, or, if that person has died and where the context requires, his Personal Representatives, | | | | | “Option Period” | means the period of 6 months after the relevant Bonus Date, |
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Table of Contents Annex B | “Option Price” | means, in relation to an Option, a price per Share determined by the Board being not less than the higher of - | | | |
| | (i) | the par value of a Share, and | | | | | | | (ii) | the average closing sales price for a Share on the New York Stock Exchange as published in the Wall Street Journal, for the 3 dealing days immediately preceding the Business Day before the Offer Date, or, if the Board so determines, a price no lower than 80 per cent of the average closing sales price, | | | | | | | PROVIDED THAT:- | | | | | | (i) | the price is calculated using a rate of exchange for US Dollar to Pounds Sterling for the relevant days as derived from a reputable source, | | | | | | | (ii) | the price is calculated to 4 decimal places and then rounded up, and | | | | | | | (iii) | if the Shares are subject to a Restriction, their value is to be determined as if they were not subject to the Restriction, | | | | |
| “Participating Company” | means any member of the Group nominated by the Board to participate in the Sharesave Plan in accordance with Rule 2.7, | | | | | “Personal Representatives” | means the legal personal representatives of an Option Holder, being either:- |
| | (a) | the executors of his will; or | | | | | | | (b) | if he dies intestate, the duly appointed administrator(s) of his estate, | | | | | | | who have produced to the Company evidence of their appointment as such, | | | | |
| “Receipt Date” | means the date on which an Exercise Notice for an Option is received under Rule 10.3, | | | | | “Redundancy” | has the meaning set out in the Employment Rights Act 1996, | | | | | “Release Date” | means the date upon which an Old Option is released under Rule 9.1, | | | | | “Restriction” | has the same meaning as in paragraph 48(3) of Schedule 3, | | | | | “SAYE Contract” | means a contract under an SAYE Scheme, | | | | | “SAYE Scheme” | means a certified SAYE savings arrangement (within the meaning of section 703 of the Income Tax (Trading and Other Income) Act 2005), | | | | | “Schedule 3” | means Schedule 3 to ITEPA, | | | | | “Schedule 3 SAYE Option Scheme” | means a scheme which is taken to be a Schedule 3 SAYE option scheme for the purposes of the SAYE Code (as defined in section 516(3) of ITEPA), | | | | | “Shares” | means fully paid shares of $0.10 par value in the common stock of Walmart for the time being which comply with paragraphs 18 to 20 and 22 (inclusive) of Schedule 3 or, for the purposes of Rule 8.2, means fully paid shares of $0.10 par value in the common stock of Walmart for the time being which no longer comply with paragraphs 18 to 20 and 22 (inclusive) of Schedule 3, | | | | | “Sharesave Plan” | means the ASDA Sharesave Plan 2000 established by these Rules in its present form or as from time to time amended in accordance with these Rules, | | | | | “Subsidiary” | means any company which is for the time being under the Control of the Company and which is also a subsidiary of the Company within the meaning of section 1159 of the Companies Act 2006, | | | | | “Three Year Option” | means an Option linked to a three year SAYE Contract, | | | | | “US or USA” | means United States of America, and | | | | | “Walmart” | means Walmart Inc., registered in Delaware, USA |
Table of Contents Annex B | 1.2 | References to any statute or statutory provision (including ITEPA) shall include any subordinate legislation made under it, any provision which it has superseded or re-enacted (whether with or without modification), any provision superseding or re-enacting it (whether with or without modification). | | | | 1.3 | Unless the context requires otherwise, references to the singular only shall include the plural and vice versa, references to the masculine gender shall include the feminine and vice versa and references to actual persons shall include corporations. | | | | 1.4 | References to Rules are to rules of the Sharesave Plan. | | | | 1.5 | The headings of these Rules shall not affect their construction or interpretation. | | | | 2. | Timing of Offers | | | | 2.1 | Subject to Rules 2.2, 2.3 and 3, the Board may make an Offer to an Eligible Employee to participate in the Sharesave Plan within 21 days after any of - | | |
| (A) | the Adoption Date, and | | | | | (B) | receipt of notification of approval of the Sharesave Plan by HMRC2; | | | | | and, thereafter, within an Offer Period. | | |
| 2.2 | If under any statute or applicable directors’ dealing code or any similar provisions the Board is prevented from making an Offer within any Offer Period the Board may make such Offer within the period of 21 days, or such longer period as the Board considers appropriate, after such provisions cease to apply. | | | | 2.3 | Invitations under Rule 2.1 shall be issued on no more than two dates in each calendar year and shall be issued to all Eligible Employees at that date. | | | | 2.4 | Each Offer shall be in writing (and may be in electronic form) and shall specify - | | |
| (A) | the Option Price of the Shares subject to the Option, | | | | | (B) | the Maximum Monthly Savings Contribution, | | | | | (C) | the Minimum Monthly Savings Contribution, | | | | | (D) | the date (which is between 14 and 21 days after the Offer Date) by which an application for an Option must be made by the Eligible Employee and on which the Offer shall lapse, and | | | | | (E) | that the Board has authority to reduce an Eligible Employee’s monthly savings contribution as may be determined under Rule 4, to an amount not exceeding the maximum stated in the application pursuant to Rule 2.5(A). | | | |
| 2.5 | Each Offer shall give details as to how Eligible Employees can apply for an SAYE Contract and an Option. Each such application (which may be in electronic form) must state:- | | |
| (A) | the maximum amount which the Eligible Employee wishes to save each month under the SAYE Contract, and | | | | | (B) | whether the Eligible Employee is applying for a Five Year Option or Three Year Option (unless the Board shall have decided that only Three Year Options shall be available in respect of that Offer). | | | |
| 2.6 | Each application pursuant to Rule 2.5 shall be deemed to be an application for the maximum whole number of Shares for which the aggregate Option Price would as nearly as possible equal (but not exceed) the total repayment due to the Option Holder at the relevant Bonus Date under the SAYE Contract. | | | | 2.7 | The Board may from time to time nominate any member of the Group which it intends to participate in the Sharesave Plan (a “Participating Company”). |
| 2 | Following Finance Act 2014, HMRC no longer formally approves plans such as this Sharesave Plan. |
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Table of Contents Annex B | 3. | Restrictions on the Grant of Options | | | | 3.1 | The number of Shares which may be acquired pursuant to Options granted on or after June 3, 2020 under the Sharesave Plan shall not exceed the sum of 10 million Shares plus any remaining Shares available under the Sharesave Plan in place on June 5, 2004, and June 4, 2010,PROVIDED THAT this limit may be reviewed or increased from time to time with the approval of shareholders of Walmart in a general meeting. | | | | 3.2 | The Board may, before making an Offer, determine the maximum number of Shares which are to be made available in respect of the grant of Options pursuant to that Offer. | | | | 3.3 | Any payment made by an Option Holder under an SAYE Contract shall be not less than the Minimum Monthly Savings Contribution or, when added to the Eligible Employee’s monthly savings contribution at that time under any other SAYE Scheme, more than the Maximum Monthly Savings Contribution. | | | | 4. | Scaling Down | | | | 4.1 | If the Board receives valid applications for Options over a number of Shares which would result in the limits set out in Rule 3.1 or determined by the Board under Rule 3.2 to be exceeded the following steps shall be carried out successively to the extent necessary to eliminate the excess over the limits - |
| | | | (A) | the excess over £5 (or such other Minimum Monthly Savings Contribution as is specified in the Offer) of the monthly savings contribution specified in each application shall be reduced pro rata, | | | | | (B) | each election for a Five Year Option shall be deemed to be an election for a Three Year Option, | | | | | (C) | each election for a Five Year Option or a Three Year Option shall be deemed to exclude any bonus that would otherwise be due on the relevant Bonus Date. |
| | | 4.2 | The amount of the reduced monthly savings contribution determined in accordance with Rule 4.1 shall not be lower than the Minimum Monthly Savings Contribution. | | | | 5. | Grant of Options | | | | 5.1 | Subject to Rule 5.2, the Board shall grant or procure the grant of Options in respect of the applications made under Rule 2.5 no later than a date (the “Date of Grant”) 30 days (or, if Rule 4.1 applies, 42 days) after the earliest date with reference to which the Option Price was determined. | | | | 5.2 | No Option shall be granted to any person who is not at the Date of Grant an Eligible Employee. | | | | 5.3 | Payments under an SAYE Contract shall be made by arrangement with the Participating Company of which the Option Holder is an Employee and such payments shall be passed forthwith to the Appropriate Authority. | | | | 5.4 | Subject to the rights of the Personal Representatives of an Option Holder, each grant of an Option shall be personal to the Eligible Employee to whom it is made and will not be transferable or assignable. An Option shall not be charged, pledged or otherwise encumbered. Any breach or attempted or purported breach of the provisions of this Rule 5.4 shall render the relevant Option void and, unless the Board determines otherwise, an Option shall lapse upon the bankruptcy of the Option Holder. | | | | 6. | Option Certificates | | | | The Company or the administrator shall in due course issue in respect of each Option granted an Option certificate evidencing the Option. Option certificates shall be in such form as the Board may from time to time determine, which may be electronic. Each Option certificate shall state whether or not the Shares are subject to a Restriction and, if so, set out details of the Restriction3. |
| 3 | This requirement only applies for Options granted on/after 17/7/13. |
Table of Contents Annex B | 7. | Rights to Exercise Options | | | | 7.1 | Subject to the provisions of this Rule 7 an Option may be exercised in accordance with the procedure set out in Rule 10 by the Option Holder following the earliest of the following events | | | | | (A) | the relevant Bonus Date, | | | | | (B) | the Option Holder ceasing to be an Employee of a Participating Company by reason of his retirement4, injury, disability or Redundancy, | | | | | (C) | the Option Holder ceasing to be an Employee of a Participating Company more than 3 years after the Date of Grant other than by reason of his retirement, injury, disability or Redundancy or by reason of gross misconduct, | | | | | (D) | the Option Holder ceasing to be an Employee of a Participating Company by reason of a business or part of a business of a Participating Company being transferred to a person who is not an Associated Company of the Company, where the transfer is not a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006,5 | | | | | (E) | the occurrence of any of the circumstances set out in Rules 8 and 12, and in each case before the earliest of the events set out in Rule 7.2, | | | | | (F) | the Option Holder ceasing to be an Employee of a Participating Company by reason of a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006, or | | | | | (G) | if the Option Holder holds office or is employed in a company which is an associated company (as defined in paragraph 35(4) of Schedule 3) of the Company, the Option Holder ceasing to be an Employee of a Participating Company by reason of that company ceasing to be such an associated company by reason of a change of control (as determined in accordance with sections 450 and 451 of the Corporation Taxes Act 2010). | | | | | 7.2 | Subject to Rules 7.3, 7.5, 7.7 and 7.8 an Option shall lapse immediately on the earliest of the following events - | | | | (A) | the expiry of the Option Period, | | | | | (B) | save where Rule 7.1 (B), (C), (D), (E), (F) or (G) or Rules 7.3, 7.4 or 7.8 applies, the Option Holder ceasing to be an Employee, | | | | | (C) | where an Option becomes exercisable by virtue of Rule 7.1 (B), (C), (D), (E), (F) or (G), 6 months after the date on which the Option became so exercisable, | | | | | (D) | the Option Holder ceasing to be an Employee by reason of gross misconduct, | | | | | (E) | the occurrence of either of the events set out in Rule 7.11, | | | | | (F) | the Option Holder being adjudicated bankrupt, | | | | | (G) | unless its release has been effected under Rule 9, the day immediately following the date of expiry of the six month period referred to in Rule 8.1, and | | | | | (H) | the day immediately following the date of expiry of the 20 day period referred to in Rule 8.2, unless its release is effected under Rule 9. | | | | | 7.3 | For Options granted on/after 6 April 2014, notwithstanding any other provision set out in these Rules, except Rules 7.10, 10.5 and 12, if an Option Holder dies before exercising his Option he may exercise that Option until the first anniversary of the Option Holder’s death or, where the death occurred during an Option Period, the first anniversary of the Bonus Date. |
| 4 | Before Finance Act 2013, retirement under the Sharesave Plan applied at or after age 60 or at any other age at which the Option Holder was bound to retire in accordance with the terms of his contract of employment. | | 5 | For employment ceasing before 6/4/2014, this rule 7.1(D) applied if the Participating Company or the business or part of the business of the Participating Company by which the Option Holder was employed ceased to be in the control of the Company, any subsidiary or any Associated Company of the Company. |
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Table of Contents Annex B | 7.4 | For Options granted before 6 April 2014, the list of events in Rule 7.1 shall be read as including “the death of the Option Holder”, the list of events in Rule 7.2 shall be read as including “the first anniversary of the date of the Option Holder’s death or, where the death occurred during the Option Period, the first anniversary of the relevant Bonus Date” and Rule 7.2(A) shall be read as being subject to this. | | | | 7.5 | For Options granted before 17/7/13, if before the relevant Bonus Date the Option Holder reaches age 60 but continues to be employed by the Group, the Option may be exercised within the period of 6 months after such event. Thereafter, to the extent unexercised, the Option may only be exercised after the earliest of the events set out in Rule 7.1. | | | | 7.6 | An Option Holder who decides not to exercise an Option in accordance with these Rules may withdraw the aggregate amount accumulated under the relevant SAYE Contract. | | | | 7.7 | For the purpose of the Rules, an Option Holder shall not be treated as ceasing to be an Employee of a Participating Company until he ceases to hold any office or employment with the Company or any associated company (as that term is defined in paragraph 35(4) of Schedule 3). | | | | 7.8 | If at the Bonus Date an Option Holder holds an office or employment in a company which is not a Participating Company but which is an Associated Company of the Company then his Option may be exercised within six months of the Bonus Date. | | | | 7.9 | An Option Holder may only exercise any Option to the extent that the aggregate Option Price paid for the Shares on such exercise will not exceed the aggregate amount (including any interest and/or the relevant bonus) of his savings under the SAYE Contract at the relevant date. | | | | 7.10 | No Option may be exercised by an Option Holder if the Option Holder is (or immediately before his death was) excluded from participation in the Sharesave Plan by virtue of paragraph 10 of Schedule 3. | | | | 7.11 | An Option shall lapse in the event that the Option Holder - | | | | | (A) | ceases to make monthly savings contributions under the relevant SAYE Contract or under the terms of the SAYE Contract is deemed to have given notice of his intention to cease to make monthly savings contributions under the relevant SAYE Contract, or | | | | | (B) | unless in connection with the exercise of an Option under this Sharesave Plan, requests repayment of his monthly savings contributions from the relevant SAYE Contract from the Appropriate Authority. | | | | | 8. | Take-overs or a disposal of the Company | | | | 8.1 | Subject to the Option not having lapsed under Rule 7.2, the Option may be exercised during the period of 6 calendar months following | | |
| (i) | the acquisition of Control of Walmart by a person pursuant to a general offer | | | | | | | (a) | to acquire the whole of the issued ordinary shares of Walmart not already held by that person or a person connected to that person, such offer having been made on a condition such that, if it was met, that person would obtain Control of Walmart, or | | | | | | | (b) | to acquire all the shares in Walmart of the same class as the Shares (not already held by that person or a person connected to that person) | | | | | | | provided that any condition subject to which the offer is made has been satisfied; or | | | | | (ii) | the sale of more than half of the issued share capital of the Company or the undertaking of the business of the Company to any company which is not an Associated Company of Walmart. |
| | | 8.2 | Subject to the Option not having lapsed under Rule 7.2, if, in consequence of Walmart coming under the Control of another person as set out in paragraph 37(6C)(a) of Schedule 3, the shares in Walmart to which an Option relates no longer meet the requirements of Part 4 of Schedule 3, the Option may be exercised no later than 20 days after the day on which such person obtains such Control, notwithstanding that the shares no longer meet those requirements (and see Rule 7.2(H) regarding time of lapsing). |
Table of Contents Annex B | 8.3 | In addition to Rules 8.1 and 8.2, an Option which is exercised no earlier than 20 days before the relevant date for the purposes of paragraph 37(2) of Schedule 3 is to be treated as if it had been exercised in accordance with Rule 8.1(i)PROVIDED THAT any such exercise in anticipation shall be treated as having had no effect if the relevant date for the purposes of paragraph 37(2) of Schedule 3 does not fall within the period of 20 days beginning with the date on which the Option is exercised6. | | | | 8.4 | For the purposes of Rule 8 | | | | | (A) | “connected” has the meaning given in section 718 ITEPA; and | | | | | (B) | a person is to be treated as obtaining Control of a company if that person and others acting in concert together obtain Control of it. | | | | | 8.5 | For the purposes of Rule 8.1(i), it does not matter if the general offer is made to different shareholders by different means. | | | | 9. | Grant of New Options | | | | 9.1 | If an Acquiring Company obtains Control of Walmart or acquires the shares or business of the Company in the circumstances set out in Rule 8.1 the Option Holder may at any time within the six month period beginning with the date referred to in Rule 8.1 by agreement with the Acquiring Company release any unexercised Option (“Old Option”) then held by him in consideration for the grant to him of a New Option. | | | | 9.2 | A New Option shall be - | | | | (A) | for such a number of New Shares as shall have substantially the same total Market Value immediately after the Release Date as the total Market Value of the Shares which were the subject of the Old Option immediately before the Release DatePROVIDED THAT if the Shares are subject to a Restriction, the Market Value for these purposes shall be determined as if they were not subject to the Restriction, | | | | | (B) | exercisable in the same manner as the Old Option, | | | | | (C) | deemed to have been granted on the Date of Grant of the corresponding Old Option, and | | | | | (D) | subject to the provisions of the Sharesave Plan as it had effect immediately before the Release Date but so that (save and except for Rules 2, 3, 4, 5, 6, 14.4 and 15) references to the “Company” and “Walmart” shall be construed as references to the “New Company” and references to “Options” shall be construed as references to “New Options.” | | | | | 9.3 | The total amount payable by an Option Holder upon the exercise of the New Option shall be substantially the same as the total amount that would have been payable by him upon the exercise of the Old Option. | | | | 9.4 | For the purposes of this Rule 9, the Market Value of any shares shall be determined using a methodology agreed by HMRC. | | | | 10. | Exercise of Options | | | | 10.1 | In order to exercise an Option in whole or in part the Option Holder must:- | | | | (A) | Give notice (which may be in electronic form) to the Company Secretary (or the person appointed by the Board for the purpose), in such manner as the Company may from time to time require and notify to Option Holders. | | | | | (B) | The notice must be accompanied by payment in full of the Option Price or must authorise the Appropriate Authority to make such payment on behalf of the Option Holder. | | | | | 10.2 | An Option may be exercised in whole or in part provided that partial exercise shall be of not less than 10 per cent of the Shares comprised in the Option. |
| 6 | Current HMRC guidance indicates that Rule 8.3 will only apply to Options granted on/after 20 March 2015, the date the rules were amended. |
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Table of Contents Annex B | 10.3 | The date the Exercise Notice is received in accordance with Rule 10.1 shall constitute for all purposes the Receipt Date of such Option. The Company will ensure that the Option is exercised within 30 Business Days of the Receipt Date. | | | | 10.4 | If the Option becomes exercisable before the relevant Bonus Date it shall be exercisable over not more than the number of Shares the aggregate Option Price of which is as nearly as possible equal to but not more than the total repayment due on the Receipt Date and the Option shall not be exercisable over any Shares in excess of that number. | | | | 10.5 | All allotments and issues or transfers of Shares (as the case may be) will be made within 30 Business Days of the Receipt Date and will be subject to all (if any) necessary consents of any governmental or other authorities under enactments or regulations for the time being in force. It shall be the responsibility of the Option Holder to comply with any requirements to be fulfilled in order to obtain or obviate the necessity for any such consent. A share certificate or such other form of acknowledgement of shareholding as is then prescribed in respect of such Shares so issued or transferred shall be sent to the person exercising the Option at his risk. | | | | 10.6 | If under the terms of an announcement made by Walmart a dividend is to be or is proposed to be paid to the holders of Shares, the Shares to be issued on the exercise of an Option after the date of such announcement will not rank for such dividend and the Shares to be transferred on the exercise of an Option after the date of such announcement will be transferred without the right to receive any such dividend and any such right to that dividend will be retained by the transferor. Subject as aforesaid the Shares so to be issued shall be identical and rank pari passu in all respects with the fully paid registered Shares in issue on the Receipt Date. | | | | 10.7 | Where the Shares are listed on the New York Stock Exchange or any other market or recognised investment exchange as defined in section 285 of the Financial Services and Markets Act 2000, the Board shall as soon as practicable apply to the New York Stock Exchange for admission of such Shares to the New York Stock Exchange or such other market or recognised investment exchange (as appropriate). | | | | 11. | Variation of Capital | | | | 11.1 | Upon the occurrence of an Issue or Variation the restriction on the number of Shares available for the offer of Options set out in Rule 3.1 and the number or nominal amount of Shares comprised in each Option and the Option Price may be adjusted in such manner as the Board may determine7PROVIDED THAT:- |
| | | | (A) | other than in the event of a capitalisation issue, written confirmation of the Auditors is obtained that in their opinion the adjustments are fair and reasonable, | | | | | (B) | the total Market Value of the Shares over which an Option subsists is substantially the same immediately before and immediately after the adjustment, | | | | | (C) | the total amount payable on the exercise of an Option in full is substantially the same immediately before and immediately after the adjustment, and | | | | | (D) | if it is intended that this Sharesave Plan shall continue to be a Schedule 3 SAYE Option Scheme, no adjustment shall be made which would result in the requirements of Schedule 3 not being met in relation to an Option. | | | |
| 11.2 | For the purposes of this paragraph, if the Shares are subject to a Restriction, the Market Value shall be determined as if they were not subject to the Restriction. | | | | 11.3 | Notice of any such adjustment shall be given to the Option Holder by the Board, which may be in electronic form and may call in Option certificates for endorsement or replacement. | | | | 12. | Winding Up | | | | Subject to the Option not having lapsed under Rule 7.2, if the Company convenes a general meeting for the purpose of considering a resolution for voluntary winding up, the Board shall notify Option Holders of the date of such meeting and Options may be exercised within 28 days of the passing of the resolution. To the extent unexercised, Options shall lapse upon the passing of the resolution. In the event that the resolution is not passed, any purported exercise of Options shall be invalid. |
| 7 | Finance Act 2014 removed the requirement for HMRC to approve adjustments in these circumstances, however HMRC guidance (ESSUM 35160) still states that: “where there is a variation in the share capital of the company, the agreement of HMRC’s Shares & Assets Valuation must be secured.” |
| 2020 Proxy Statement B-11 |
Table of Contents Annex B | 13. | Administration | | | | 13.1 | Except as otherwise provided in the Sharesave Plan, any notice or document required to be given in accordance or in connection with the Sharesave Plan to any Eligible Employee or Option Holder may be given by hand (including through the Company’s internal delivery system) or sent by post to that person’s work or home postal address (as last known to the Company to be that person’s postal address), or given electronically. Subject to Rule 13.4 any notice or document given in accordance with this Rule 13.1 shall be deemed to have been given:- | | |
| (A) | upon delivery if delivered by hand; | | | | | (B) | after 24 hours, if sent by post; or | | | | | (C) | at the time of transmission if sent electronically. | | | |
| 13.2 | Any notice or document so sent to an Eligible Employee or Option Holder shall be deemed to have been duly given notwithstanding that such Eligible Employee or Option Holder is then deceased (and whether or not the Company has notice of his death) except where his Personal Representatives have established their title to the satisfaction of the Company and supplied to the Company an alternative address to which documents are to be sent. | | | | 13.3 | Any notice in writing or document to be submitted or given to the Company or administrator in accordance or in connection with the Sharesave Plan may be given by hand or sent by post, facsimile transmission or electronically but shall not in any event be duly given unless it is in the form specified and actually received (or, in the case of an e-mail opened) by the secretary of the Company or such other person as may from time to time be nominated by the Company. | | | | 13.4 | For the purposes of the Sharesave Plan, an e-mail shall be treated as not having been duly sent or received if the recipient of such e-mail notifies the sender that it has not been opened because it contains, or is accompanied by a warning or caution that it could contain or be subject to, a virus or other computer programme which could alter, damage or interfere with any computer software or e-mail. | | | | 13.5 | References in these Rules to notices or documents being given electronically include those:- | | |
| (A) | made by SMS text message (to the telephone number last known to the Company to be the Eligible Employee’s or Option Holder’s telephone number or the telephone number as specified to the Eligible Employee or Option Holder); | | | | | (B) | made by e-mail (to the address last known to the Company to be the Eligible Employee’s or Option Holder’s e-mail address or the e-mail address as specified to the Eligible Employee or Option Holder); and | | | | | (C) | posted on an internal/external portal to which the Eligible Employee or Option Holder has access. | | | |
| 13.6 | The Board shall have power from time to time to make or vary regulations for the administration and operation of the Sharesave Plan provided that the same are not inconsistent with the Rules of the Sharesave Plan. | | | 14. | General8 | | | 14.1 | This Sharesave Plan shall provide, in accordance with Schedule 3, benefits for Employees of Participating Companies in the form of share options and shall not provide benefits to such Employees otherwise than in accordance with Schedule 3. | | | 14.2 | Whilst it is intended that this Sharesave Plan shall continue to be a Schedule 3 SAYE Option Scheme, the Rules set out in this Sharesave Plan shall be interpreted in a manner so as to be consistent with Schedule 3. | | | | 14.3 | The decision of the Board in any dispute or question concerning the construction or effect of the Sharesave Plan or any other question in connection with the Sharesave Plan (including the calculation of the Option Price in any particular case and the effect of an Issue or Variation) shall be conclusive subject to the concurrence of the Auditors whenever required under the provisions of the Sharesave Plan. |
| 8 | Rules 14.6 to 14.8 inclusive shall only apply to Options granted on/after 20 March 2015, the date the rules were amended. |
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Table of Contents Annex B | 14.4 | The Company or the Board may at any time resolve to suspend or terminate the Sharesave Plan, in which event no further Options shall be granted but the Sharesave Plan shall continue in full force and effect in relation to Options and New Options then subsisting. | | | | 14.5 | Participation in the Sharesave Plan by an Eligible Employee is a matter entirely separate from any pension right or entitlement pursuant to his terms and conditions of employment. | | | | 14.6 | The rights and obligations of an Option Holder under the terms of his contract of employment with the Company, any present or past member of the Group, Participating Company or Associated Company shall not be affected by the grant of an Option or his participation in the Sharesave Plan. | | | | 14.7 | The rights or opportunity granted to an Option Holder on the making of an Option shall not give the Option Holder any rights or additional rights to compensation or damages in consequence of either:- | | | | (A) | the Option Holder giving or receiving notice of termination of his office or employment; or | | | | | (B) | the loss or termination of his office or employment with the Company, any present or past member of the Group, Participating Company or Associated Company for any reason whatsoever, | | | | | whether or not the termination (and/or giving of notice) is ultimately held to be wrongful or unfair. | | | 14.8 | An Option Holder shall not be entitled to any compensation or damages for any loss or potential loss which he may suffer by reason of being unable to acquire or retain Shares, or any interest in Shares, pursuant to the exercise of an Option in consequence of:- | | | | (A) | the Option Holder giving or receiving notice of termination of his office or employment (whether or not the termination (and/or giving of notice) is ultimately held to be wrongful or unfair); | | | | | (B) | the loss or termination of his office or employment with the Company, any present or past member of the Group, Participating Company or Associated Company for any reason whatsoever (whether or not the termination is ultimately held to be wrongful or unfair); or | | | | | (C) | any other reason. | | | 14.9 | The Board shall procure that at all times there are available a sufficient number of authorised and unissued Shares and/or ensure that it has made arrangements to procure the transfer of sufficient issued Shares to meet the subsisting rights of Option Holders under the Sharesave Plan. | | | | 14.10 | The Sharesave Plan and any Option shall be governed by English law. | | | 15. | Alterations to the Sharesave Plan | | | | The Board may at any time resolve to alter the Sharesave Plan in any manner subject to the following provisions of this Rule 15PROVIDED THAT:- | | | (A) | if it is intended that this Sharesave Plan shall continue to be a Schedule 3 SAYE Option Scheme, no alteration to any Key Feature shall take effect which would result in the requirements of Parts 2 to 7 of Schedule 3 not being met in relation to an Option, and | | | | | (B) | no alteration shall be effective to abrogate or alter adversely any of the subsisting rights of the Option Holders except with such consent or sanction on the part of the Option Holders as would be required under the provisions of the Company’s Articles of Association if the Shares the subject of the Options constituted a single class of shares. | | | | | 16. | Data Protection | | | Any data protection policy (or policies) and/or data privacy notice(s) of the Group that are applicable to an Eligible Employee or Option Holder will apply to their personal data. |
| 2020 Proxy Statement B-13 |
Table of Contents | Notice of 2020 Annual Shareholders’ Meeting |
| Wednesday, June 3, 2020 | | Access the virtual meeting atwww.virtualshareholdermeeting.com/WMT2020 | | at 10:30 a.m. Central Time | |
Who We Are
Wal-Mart Stores, Inc.
The work we do to help people live better extends far beyond the wallsTable of our stores. We’re committed to making a real difference by working to create economic opportunity, enhance the sustainability of our operations as well as the systems we operate in, and strengthen local communities. From supporting the development of our associates, suppliers and women entrepreneurs to pursuing a more affordable, secure food supply chain to building resiliency in the face of disasters, Walmart is using our strengths to promote the well-being of people and our planet.
We understand not only what our customers want and need,
but also where they want it and how they want to experience it.
A Snapshot of Walmart
Provided support for 2.4 billion meals to people in need since 2014 More than $700M in cash bonuses paid to hourly associates (FYE 17) $250 billion commitment to buy products supporting American jobs by 2023 More than 200,000 associates in the U.S. promoted to jobs with higher pay and more responsibility More than 150,000 veterans hired since 2013 1.2 million associate volunteer hours (FYE17) $100M invested to strengthen local communities 200 Walmart training academies open by the end of the year $6.8 million invested in disaster preparedness and relief
2017 Annual Shareholders’ Meeting
Place:Bud Walton Arena, University of Arkansas Campus, Fayetteville, Arkansas
Date and Time:June 2, 2017, 8:00 a.m., Central time
2017 Annual Shareholders’ Meeting Admission Requirements
In order to be admitted to the 2017 Annual Shareholders’ Meeting, you must bring photo ID AND one of the following:
| ○ | The proxy statement or proxy card you received in the mail |
| ○ | The notice of internet availability you received in the mail |
| ○ | The email you received with a link to our proxy materials; |
| ○ | Other proof of share ownership, such as a valid legal proxy from your bank, broker, or other nominee who holds your shares, a voting instruction form that you received from your bank, broker, or other nominee, or a recent bank, brokerage or other statement demonstrating that you owned shares as of the close of business on April 7, 2017. |
Please see page 102 of this proxy statement for more information regarding admission requirements.WALMART INC.
Casual dress is recommended. Doors open at 7:00 a.m., Central time. Please note that due to on-campus construction, parking may be limited. Photographs taken at the meeting may be used by Walmart. By attending, you waive any claim or rights to these photographs and their use.
Photographs taken at the meeting may be used by Walmart.
By attending, you waive any claim or rights to these photographs and their use.
The use of cameras, camcorders, videotaping equipment, and other recording devices will not be permitted in Bud Walton Arena. Attendees may not bring into the arena large packages or other material that could pose a safety or disruption hazard (e.g., fireworks, noisemakers, horns, confetti, etc.).
4 4 7 4 3 Hwy 264 Razorback Road Meadow Leroy Pond Road Hwy 264 NW Arkansas Regional Airport (XNA) Hwy 412 Hwy 62 I-49 (formerly I-540) 4 6 2 5 VTo Fort Smith V Hwy 71 Business To Rogers and Bentonville
1. Bud WaltonArena
2. Disabled Parking
(Lot No. 55)
| | 3. NW ArkansasRegional Airport(XNA)
4. Parking Lots No.
44, 56, 72 & 73
| | 5. Razorback Stadium
6. Track
7. Indoor Tennis Center(overflow seating)
|
WAL-MART STORES, INC.
C/O PROXY SERVICES
P.O. BOX 9163
FARMINGDALE, NY 11735
VOTE BY INTERNET BEFORE THE MEETING -www.proxyvote.com
Use the Internet to vote by proxy up until 11:59 P.M. Eastern Time on June 1, 2017.2, 2020. If you participate in the Walmart 401(k) Plan or the Wal-MartWalmart Puerto Rico 401(k) Plan, you must vote these shares no later than 11:59 P.M. Eastern Time on May 30, 2017.28, 2020. Have your proxy card in hand when you access the website and then follow the instructions to obtain your records and to create an electronic proxy. VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 2, 2020. If you participate in the Walmart 401(k) Plan or the Walmart Puerto Rico 401(k) Plan, you must vote these shares no later than 11:59 P.M. Eastern Time on May 28, 2020. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL
Mark, sign, and date this proxy card and promptly return it in the postage-paid envelope we have provided to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. VOTE BY INTERNET DURING THE MEETING
You may attend the meeting via the Internet and vote during the meeting by going to www.virtualshareholdermeeting.com/WMT2020. Have the information that is printed in the box marked by the arrow available and follow the instructions. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. You may also agree to receive or access proxy materials electronically in future years on Walmart’sWalmart's corporate website athttp://stock.walmart.com/annual-reports.VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 1, 2017. If you participate in the Walmart 401(k) Plan or the Wal-Mart Puerto Rico 401(k) Plan, you must vote these shares no later than 11:59 P.M. Eastern Time on May 30, 2017. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign, and date this proxy card and promptly return it in the postage-paid envelope we have provided to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E25810-P91282-Z69786 KEEP THIS PORTION FOR YOUR RECORDS
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | D10321-P36708-Z76609 | KEEP THIS PORTION FOR YOUR RECORDS | | DETACH AND RETURN THIS PORTION ONLY | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
WAL-MART STORES, INC.
The Board of Directors recommends a vote “FOR” each of the nominees listed in Proposal 1,
“1 YEAR” on Proposal 2, “FOR” Proposals 3 and 4, and “AGAINST” Proposals 5 through 7.
| | | | | | The Board of Directors recommends a vote "FOR" each of the nominees listed in Proposal 1, "FOR" Proposals 2 through 4, and "AGAINST" Proposals 5 through 8. | | 1. | Election of Directors | | | | | | Nominees: | For | Against | | | | Abstain | | 1a. | Nominees:Cesar Conde | ☐ | For ☐ | Against | Abstain☐ | | | | | | | | | | | 1a. | James I. Cash, Jr. | | o | o | o | | | | | | | | | | | 1b. | Timothy P. Flynn | ☐ | o☐ | o | o☐ | | 1c. | Sarah J. Friar | ☐ | ☐ | | | ☐ | | | 1c.1d. | Carla A. Harris | ☐ | o☐ | o | o☐ | | | | | | | | | | | 1d.1e. | Thomas W. Horton | ☐ | o☐ | o | o☐ | | | | | | | | | | | 1e.1f. | Marissa A. Mayer | ☐ | o☐ | o | o☐ | | | | | | | | | | | 1f.1g. | C. Douglas McMillon | ☐ | o☐ | o | o☐ | | | | | | | | | | | 1g.1h. | Gregory B. Penner | ☐ | o☐ | o | o☐ | | | | | | | | | | | 1h.1i. | Steven S Reinemund | ☐ | o☐ | o | o☐ | | | | | | | | | | | 1i. | Kevin Y. Systrom | | o | o | o | | | | | | | | | | | 1j. | S. Robson Walton | ☐ | o☐ | o | o☐ | | | | | | | | | | | 1k. | Steuart L. Walton | ☐ | o☐ | o | o☐ |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Company Proposals: | | 1 YEAR | | 2 YEARS | | 3 YEARS | | Abstain | | | | | | | | | | | 2. | Advisory Vote on the Frequency of Future Shareholder Advisory Votes to Approve Named Executive Officer Compensation | | o | | o | | o | | o | | | | | For | | Against | | Abstain | | | | | | | | | | | 3. | Advisory Vote to Approve Named Executive Officer Compensation | | o | | o | | o | | | | | | | | | 4. | Ratification of Ernst & Young LLP as Independent Accountants | | o | | o | | o | | | | | | | | | | | Shareholder Proposals: | | | | | | | | | | | | | | | | | | 5. | Request to Adopt an Independent Chairman Policy | | o | | o | | o | | | | | | | | | 6. | Shareholder Proxy Access | | o | | o | | o | | | | | | | | | 7. | Request for Independent Director with Environmental Expertise | | o | | o | | o | | | | | | | | | | | NOTE: Such other business as may properly come before the meeting or any adjournment thereof will be voted on by the proxy holders in their discretion. | | | | | | | | | | | | | |
If this proxy is signed, dated, and promptly returned, it will be voted in accordance with your instructions shown above. Please sign exactly as your name appearsname(s) appear(s) hereon. Joint owners should each sign. If signing as attorney-in-fact, executor, administrator, trustee, guardian, fiduciary or in another capacity, please indicate full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer(s), and specify the title(s) of such officer(s). |  | | | | | | | | | | | | | Company Proposals: | For | Against | Abstain | | 2. | Advisory Vote to Approve Named Executive Officer Compensation | ☐ | ☐ | ☐ | | 3. | Ratification of Ernst & Young LLP as Independent Accountants | ☐ | ☐ | ☐ | | 4. | Approval of the Amendment to the ASDA Sharesave Plan 2000 | ☐ | ☐ | ☐ | | Shareholder Proposals, in each case, if properly presented at the meeting: | | | | | 5. | Report on Impacts of Single-Use Plastic Bags | ☐ | ☐ | ☐ | | 6. | Report on Supplier Antibiotics Use Standards | ☐ | ☐ | ☐ | | 7. | Policy to Include Hourly Associates as Director Candidates | ☐ | ☐ | ☐ | | 8. | Report on Strengthening Prevention of Workplace Sexual Harassment | ☐ | ☐ | ☐ | | NOTE: Such other business as may properly come before the meeting or any adjournment thereof will be voted on by the proxy holders in their discretion. |
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| | | | | | Signature [PLEASE SIGN WITHIN BOX] | Date | | Signature (Joint Owners) | Date |
V.1.1
Table of Contents
Annual Shareholders’Shareholders' Meeting
June 2, 20173, 2020 at 8:0010:30 A.M., Central Time
www.virtualshareholdermeeting.com/WMT2020
Bud Walton Arena, University of Arkansas
Fayetteville, Arkansas 72701
Important Notice Regarding the Availability of Proxy Materials for the Annual Shareholders’Shareholders' Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. E25811-P91282-Z69786
WAL-MART STORES,WALMART INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL SHAREHOLDERS’ MEETING OF WAL-MART STORES,WALMART INC.
TO BE HELD VIRTUALLY AT WWW.VIRTUALSHAREHOLDERMEETING.COM/WMT2020 ON JUNE 2, 20173, 2020 I have received the Notice of 20172020 Annual Shareholders’Shareholders' Meeting (the “Meeting”"Meeting") to be held on June 2, 2017,3, 2020, and the related Proxy Statement furnished by Wal-Mart Stores,Walmart Inc.’s (“Walmart”'s ("Walmart") Board of Directors. I appoint GREGORY B. PENNER and C. DOUGLAS MCMILLON, and each of them, as my proxies and attorneys-in-fact, with full power of substitution, to represent me and to vote all shares of Walmart common stock that I am entitled to vote at the Meeting or any adjournments or postponements thereof in the manner shown on this form as to the matters shown on the reverse side of this form and in their discretion on any other matters that properly come before the Meeting or any adjournments or postponements thereof. If I participate in the Walmart 401(k) Plan or the Wal-MartWalmart Puerto Rico 401(k) Plan and I have a portion of my interest invested in Walmart stock, I also direct the Retirement Plans Committee of the respective plan to take such actions necessary to vote the stock which is attributable to my interest in the manner shown on this form as to the matters shown on the reverse side of this form at the Meeting, and in its discretion on any other matters that properly come before the Meeting or any adjournments or postponements thereof. You are encouraged to specify your choices by marking the appropriate boxes on the reverse side, but you need not mark any box if you wish to vote in accordance with the Board of Directors’ recommendations. The proxy holders cannot vote the shares unless you sign, date and return this card, vote by Internet, or vote by telephone. If you do not specify how the proxy should be voted, it will be voted “FOR” each of the nominees listed in Proposal 1, “1 YEAR” for Proposal 2, “FOR” Proposals 3 and 4, and “AGAINST” Proposals 5 through 7.
side. If this proxy is signed, dated, and promptly returned, it will be voted in accordance with your instructions shown on the reverse side. side; however, if you do not provide instructions, this proxy will be voted "FOR" each director nominee listed in Proposal 1, "FOR" Proposals 2 through 4, "AGAINST" Proposals 5 through 8, and in their discretion on any other matters that are properly presented at the Meeting or any adjournments or postponements thereof. Please sign exactly as your name appears hereon. Joint owners should each sign. If signing as attorney-in-fact, executor, administrator, trustee, guardian, fiduciary or in another capacity, please indicate full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer(s), and specify the title(s) of such officer(s). V.1.1
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