I wonder what the genius in the White House, who organized the president’s celebration of Wal-Mart this past week, will say now. Or was it the president who thought, “gee, Wal-Mart, now there’s a model to hold up”. Just to aid anyone who had any doubts about the kind of company the Beast of Bentonville really is, Wal-Mart is happy to effectively lie to make sure its executives get their huge bonuses.
Gretchen Morgenson has the story under the very subtle but, after you read the story, devastating headline, “Making Ends Meet at Walmart”:
In fact, the company cited a sluggish economy and cuts in federal food stamps for its weak sales increase of 1.6 percent in fiscal 2014. (Growth was 5 percent the previous year.) When you stop buying food, you know things are bad.But Walmart executives aren’t feeling the same pain. While the company’s malaise is clearly laid out in financial tables — numbers don’t lie, after all — when it comes to figuring the performance pay of top executives, let’s just say the numbers can be made to fib.[emphasis added]
What Wal-Mart did (and, certainly, other companies do) was make “adjustments” to its proxy statement:
Consider the case of William S. Simon, president and C.E.O. of Walmart’s United States unit. Under Walmart’s pay plan, he would receive some incentive pay if sales grew more than 2 percent.The trouble was, Walmart’s United States sales rose only 1.8 percent in fiscal 2014. That meant Mr. Simon would miss his threshold.
Enter the adjustments.
After adjusting for certain items relating to the company’s sales, the Walmart unit eked out a growth rate of 2.03 percent in 2014. On the strength of that “adjusted” performance, Mr. Simon received $1.5 million, the proxy noted. His total compensation was $13 million last year.
What adjustments helped Mr. Simon clear the bar? One action that the company took was to eliminate the decline in its United States sales that occurred after the government cut food stamp benefits — formally known as the Supplemental Nutrition and Assistance Program, or SNAP — by 5 percent last November.
That reduction in benefits hurt Walmart’s sales, the company acknowledged, because many customers use food stamps in its stores.[emphasis added]
Note that amazing point. Wal-Mart which bets its entire profit strategy on the poverty of its workers, who get paid shit wages, and the poverty of people in the surrounding communities, eliminated any negative effect on its balance sheet that came from increased poverty–from the cutting of food stamp benefits–in order to pay its executive more.Read that over and over again.
There’s more. When figuring cash incentive pay, the company requires performance to exceed another threshold relating to its operating income. The bar is low — the company’s total operating income could decline by 1.5 percent, the proxy said, and executives would still earn a minimum cash incentive payout.Again, the adjustments provided a crucial lift. According to the company’s annual financial filing, its actual operating income fell by 3.1 percent. But after making its adjustments — presto chango — the growth rate became a positive 1 percent.
Six of Walmart’s top executives received a total of $8.42 million in cash incentive payments for 2014, the proxy said. Mr. Tovar declined to specify how much of that was generated by the adjustments.
Regular workers get that same help, right. Yeah, right–their pay is going down as Wal-Mart cuts hours:
Mary Pat Tifft, who lives in Kenosha, Wis., is a longtime Walmart shareholder as well as an employee — an associate, in Walmart parlance — of more than 20 years. She thinks these adjustments are the equivalent of an athlete moving the goal posts. “Walmart associates are having their hours cut because of declining sales but executives are still getting their bonuses,” she said. “It’s ridiculous that they can keep receiving their compensation because they keep moving the numbers around.”The average full-time hourly Walmart employee makes about $27,000 a year.
Last point by Morgenson makes the point clearly:
Stockholders and employees are certainly entitled to share in the benefits of a well-run company. But the way Walmart adjusts its results on behalf of executives indicates pretty clearly who comes first.[emphasis added]
This is the company that the president bestowed a wet-kiss on the other day, a green-washing company that perpetually breaks the law and has no shame shoveling wealth to a few of the elite, including the multi-billionaire Waltons, while screwing its workforce.This is no secret. These people have a long, long history of breaking the law and violating peoples’ rights.
This “adjustment” of Wal-Mart’s statements to benefit CEOs is nothing new–it did it back in 2011 as well, as I wrote here.
The company is a persistent violator of work rights.
It does not care about the body count in countries like Bangladesh where its products are made and refused to sign a new internationally-accepted safety code.
On and on and on…
And, somehow, the White House is so blind to this long history of deceit, corruption and preying on the people who makes its profits that is rolls out the president to give it a stamp of approval. Pathetic. And, worse, stupid politics.