(Bloomberg) -- Walmart Inc. told shareholders last year that it would cut cash bonuses by 25 percent for top managers including Chief Executive Officer Doug McMillon in favor of more stock awards. That didn’t happen.
The world’s largest retailer didn’t use the reduced target amounts when calculating the latest bonuses for McMillon and three other executives, according to a Bloomberg Pay Index analysis of the firm’s proxy statements, including its most recent one on Friday. The discrepancy resulted in payments of $3.12 million in excess of what was stated in the most recent proxies.
“A transition component for the program was inadvertently not reflected in the 2017 proxy statement, however we do not believe this was material to the overall description of our executive compensation program,” Randy Hargrove, a spokesman for the Bentonville, Arkansas-based company, said Wednesday in an emailed statement.
“The company’s proxy statements accurately reflect the total compensation paid to our executive officers for fiscal years 2017 and 2018,” he said. “The proxy statements also accurately describe the material components of the company’s executive compensation program.”
Keeping a tight lid on costs is part of Walmart’s DNA, going back to the days when founder Sam Walton made executives share hotel rooms on business trips. That frugality continues today, as the company has pared its corporate staff and even shortened the length of store receipts. In response to criticism over its treatment of employees, the retailer boosted its minimum wage three times since 2015 and expanded benefits such as parental leave. It’s the biggest private employer in the U.S. with about 1.5 million workers.
The board’s compensation committee awarded McMillon a $4.74 million bonus for the fiscal year ended in January, or 116.4 percent of the target, according to its latest proxy filing on Friday. The problem is that it used a target of $4.07 million to calculate the CEO’s fiscal 2018 bonus instead of the $3.05 million target that Walmart provided in last year’s proxy statement, representing a 25 percent cut from the fiscal 2017 target.
Chief Financial Officer Brett Biggs, Executive Vice President Greg Foran and U.S. eCommerce head Marc Lore received bonuses of $2.03 million, $2.92 million and $2.79 million, respectively. These were all about 33 percent more than what they would have received using last year’s target bonuses.
The compensation committee, which was reorganized in the past year, is led by former PepsiCo Inc. CEO Steve Reinemund. Its other members are former Yahoo! Inc. CEO Marissa Mayer, Instagram CEO Kevin Systrom and Carla Harris, vice chair of wealth management at Morgan Stanley.
McMillon, 51, was paid a total of $33.2 million for his work in the last fiscal year, according to the Bloomberg Pay Index. In addition to the bonus, the compensation package included a $1.28 million salary and $26.1 million of stock awards, most of it tied to performance goals.
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