Lee Scott to Retire from Wal-Mart Board -- Update

By Shelly Banjo 

Former Wal-Mart Stores Inc. Chief Executive Lee Scott and investment banker Christopher Williams, chair of the board's audit committee, will retire from the company's board of directors, Wal-Mart said in a securities filing Wednesday.

Mr. Scott has served on the board since 1999 and received $244,660 in compensation last year. Mr. Williams, chairman of Williams Capital Group LP, joined the board in 2004 and received $384,821 in compensation last year.

Spokesman Randy Hargrove said directors on Wal-Mart's board stand for re-election every year and typically rotate off the board every 10. In Mr. Scott's case, his decision was tied to the ascension of Doug McMillon as Wal-Mart's CEO in February, Mr. Hargrove said. Mike Duke, who stepped down as CEO in February, will remain on the board.

Mr. Williams has been chairman of Wal-Mart's audit committee, which has overseen an internal investigation into potential violations of the Foreign Corrupt Practices Act, including allegations Wal-Mart violated U.S. antibribery laws to speed store openings in Mexico last decade. Wal-Mart has said it is under investigation by the Justice Department and Securities and Exchange Commission over alleged FCPA violations and is cooperating with those inquiries.

Wal-Mart said its audit committee conducted 13 additional meetings related to the investigations and compliance matters. For this reason, members of the audit committee received an additional $75,000 in compensation, with the chair of the audit committee receiving $100,000.

For the first time, Wal-Mart said it tied part of its executives' pay to the overhaul of its compliance program, including the development of enhanced compliance procedures and hiring of compliance professionals.

The company didn't give details, but said its executives made "adequate progress" on these objectives, so they didn't lose out on any cash awards.

Executive payouts based on company performance were below target levels, as Wal-Mart missed sales and other financial targets. Mr. Duke lost out on $1.6 million in performance pay as a result.

"Each of our operating segments fell short of its target sales goals, and our total company and our Sam's Club segment fell short of their threshold sales goals under this program," the company said in its proxy filing. "As a result, the fiscal 2014 performance for each of our executive officers was significantly less than target, and were at the lowest levels of the last several years."

Meanwhile, Mr. McMillon was awarded $25.6 million in total compensation, the bulk of which comes from $23 million in stock awards that are tied to financial performance over three years.

Also in January, Wal-Mart's board approved a special performance-based cash award for the chief executive of Wal-Mart's U.S. division, Bill Simon. The $2.5 million award is contingent on the sales performance of Wal-Mart's Neighborhood Markets, a smaller-format grocery store in the U.S.

"The purpose of this award is for retention purposes and to emphasize our smaller-format growth strategy in the U.S.," the company said in the filing.

Write to Shelly Banjo at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires