NW ARKANSAS Focus : Scott: Wal-Mart will stay out front

BY LYNDA EDWARDS

Posted on Saturday, June 3, 2006

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FAYETTEVILLE — Chief Executive Officer H. Lee Scott told the 15, 000 shareholders meeting attendees that Wal-Mart’s new mantra is “Wal-Mart Out In Front,” invoking founder Sam Walton’s advice to stay in front of trends and customers’ changing needs rather than follow them.

Performances by singer Beyonce Knowles and American Idol winner Taylor Hicks were greeted by 4, 000 wildly cheering employees from around the globe at the company’s annual meeting Friday.

Scott told the crowd packed into Bud Walton Arena at the University of Arkansas at Fayetteville that India is Wal-Mart’s next logical target for expansion. In the past, Scott said India is a $ 250 billion market, growing more than 7 percent annually and barely touched by modern retailing methods.

Scott had just returned from taking the month of May for vacation, the first time he has ever taken off four consecutive weeks.

Chief Financial Officer Tom Schoewe said initial resistance from investors to the Bentonville-based chain’s plan to open 550 stores worldwide in the coming year has been “completely overcome.” Then he gestured to the jumbo screen that displayed Wal-Mart Stores Inc. ’s sales for the past 10 years: $ 1. 96 trillion.

The meeting opened with an hour-long musical about a young, slightly subversive Wal-Mart worker and his gung-ho boss. Between numbers with acrobatic dancers leaping over shopping carts, Wal-Mart employees laughed and clapped when the slacker complained about tedious tasks. An actor in a blue suit dotted with silver stars helps the boss become less pompous and the worker more focused as they move into the future.

Barbara Aires of the Sisters of Charity, a member of the Interfaith Center on Corporate Responsibility, praised the world’s biggest retailer. Aires is a perennial presenter of a motion seeking the public release of Wal-Mart’s Equal Employment Opportunity Commission reports that assess women and minorities’ progress in the corporation.

“I am glad to announce the company has shared that data with us and has set a benchmark for itself and corporations around the world. As the largest corporation in the world, it is important to set the example,” she said.

She urged the company not to be complacent.

“I know there is much more to come, in pay and in health benefits. Everyone needs to know this is a fair company,” she said.

WakeUpWal-Mart. com, a union-backed Washington, D. C., group, published a full-page advertisement Friday in the Arkansas Democrat-Gazette imploring shareholders to improve Wal-Mart workers’ benefits, pay and working conditions. The ad quoted No. 2 of Sam Walton’s 10 Rules for Success; “Share your profits with your associates, and treat them as partners.”

Wal-Mart calls its employees “associates.”

WakeUpWal-Mart. com spokesman Chris Kofinis said his group handed out 2, 000 leaflets to shareholders.

Two organizations staged a demonstration that included a march near Bud Walton Arena after the meeting.

The area chapter of Service Employees International Union and the Little Rock chapter of the Association of Community Organizations for Reform Now dressed in hazardous materials cleanup suits and carried warning signs claiming Wal-Mart is toxic to communities and responsible for a global epidemic of commercialism.

Joshua Thompson of the union said Wal-Mart should be quarantined from infecting communities with sprawl and exploiting employees.

“If you peel the ‘smiley’ off, what we find is a really awful company, as bad as General Motors was in the 1930 s,” he said.

Hattie Daniels, treasurer for the Little Rock chapter of ACORN and a member of its state board, said the company depends on the taxpayer to foot the bill for employees’ health care while asking for tax breaks to build new stores.

“We knew we would not be allowed into the meeting. We just wanted shareholders to get the message that they are not treating employees fair,” Daniels said.

Inside the arena, Wal-Mart de Mexico President Eduardo Solorzano introduced a video of a Wal-Mart store in a remote village. The employees were from a Mexican tribe and performed the Wal-Mart cheer in its language every morning.

Wal-Mart executives proclaimed attendees from Sam’s Clubs, Wal-Mart’s warehouse division, the loudest cheering section of the day. They roared whenever “Sam’s Club” was uttered, even when it appeared to fluster some executives. The workers even cheered the sight of Sam’s Club chairs onstage.

One of the shareholder proposals also brought an outburst of cheering and applause from employees.

David Rosan with the Interfaith Center on Corporate Responsibility read a proposal to narrow the gap between Scott’s $ 17. 54 million salary and other compensation for 2006 and his workers’ average pay.

Scott and Executive Vice President Susan Chambers, who heads Wal-Mart’s People or human resources division, sat silently, hands in their laps.

“Wal-Mart associates are a major reason for Wal-Mart’s success, so they should be rewarded with excellent wages and benefits,” Rosan said.

Wal-Mart argued Scott’s package was fair. The proposal was rejected.

Shareholders rejected all six resolutions, including one that would require Wal-Mart to disclose its contributions to political action committees and interest groups.

An International Brotherhood of Teamsters representative introduced that proposal, asking what business purpose was served by Wal-Mart’s donation to Progress for America, a group advocating the privatization of Social Security. He said Texas Instruments and Motorola already had adopted donation disclosure policies.

People for the Ethical Treatment of Animals, a national animal-welfare group, owns 66 shares of Wal-Mart stock.

PETA’s resolution asked Wal-Mart to report its progress in implementing a method of poultry slaughter that gases chickens rather than killing the chickens with electric shocks or boiling them alive.

To contact this reporter: ledwards@arkansasonline. com Information for this article was contributed by Stacey Roberts of the Arkansas Democrat-Gazette.

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