Wal-Mart Tries to Stop Shareholder Discussion of ObamaCare, Cap and Trade
Suddenly at odds with public opinion on Barack Obama’s proposals on health care and global warming, Wal-Mart is seeking to exclude from its proxy our shareholder proposal that asks for a report on the company’s lobbying priorities. As we noted in the supporting statement, Wal-Mart favors these proposals that will dramatically raise the cost of living for its customers, at the same time it has taken a lower profile on issues like tort reform that would benefit its customers, not to mention the company and its shareholders.
As we documented in our Special Report titled Wal-Mart Embraces Controversial Causes: Bid to Appease Liberal Interest Groups Will Likely Fail, Hurt Business, the company’s management has steered the company to the political Left under the guidance of Edelman public relations firm. With the public now turning against the very ideas that Edelman counseled Wal-Mart to embrace, it is no surprise that the company would seek to limit our ability to communicate with other shareholders.
In a request filed with the Securities and Exchange Commission (SEC) on January 29, Wal-Mart seeks a “no-action” letter, meaning that the SEC will take no action against Wal-Mart should it exclude our resolution from consideration. If successful, Wal-Mart could omit our proposal from its proxy and prevent me from speaking in its support at the annual meeting to take place in early June. NLPC has countered that the SEC staff has already ruled that a similar proposal, filed by a JPMorgan Chase shareholder in 2008, could not be excluded. The SEC staff generally honors its own precedents.
Our “Lobbying Priorities Report” proposal reads:
Wal-Mart’s primary responsibility is to create shareholder value. The Company should pursue legal and ethical means to achieve that goal, including identifying and advocating legislative and regulatory public policies that would advance Company interests and shareholder value in a transparent and lawful manner.
Resolved: The shareholders request the Board of Directors, at reasonable cost and excluding confidential information, report to shareholders on the Company’s process for identifying and prioritizing legislative and regulatory public policy advocacy activities. The report may:
1. Describe the process by which the Company identifies, evaluates and prioritizes public policy issues of interest to the Company;
2. Describe the process by which the Company enters into alliances, coalitions and trade associations for the purpose of affecting public policy;
3. Identify and describe public policy issues of interest to the Company;
4. Prioritize the issues by importance to creating shareholder value; and
5. Explain the business rationale for prioritization.
Our supporting statement reads:
The Company’s public policy positions and related advocacy activities should be developed and prioritized based on market and fact-based analyses and not on pressure from politicians, union bosses, or anti-business activists who are hostile to Wal-Mart and its business model.
In a June 30, 2009 letter to Barack Obama, the Wal-Mart CEO endorsed an employer mandate on business for health care coverage. The U.S. Chamber of Commerce, the National Federation of Independent Business and the National Retail Federation all oppose such an employer mandate.
The Wal-Mart letter was co-signed by Andrew Stern, President of the Service Employees International Union (SEIU) and John Podesta, President of the Center for American Progress (CAP).
SEIU funds Wal-Mart Watch, a vociferous Wal-Mart critic. SEIU has a long relationship with the scandal-plagued Association of Community Organizations for Reform Now (ACORN). Both SEIU and CAP promote “card check.” CAP is funded in part by the foundation of billionaire George Soros.
According to the Wal-Mart 2009 Sustainability Report:
"Currently, we are…supporting legislation in the U.S. to reduce greenhouse gas emissions — including the enactment of a well-designed cap-and-trade system."
Cap and trade would raise costs for all businesses. A 2009 Heritage Foundation study estimated that the Waxman-Markey cap-and-trade bill, for instance, would destroy over 1.1 million jobs, hike electricity rates 90 percent, and reduce U.S. gross domestic product by nearly $10 trillion over the next 25 years.
At the same time, Wal-Mart has had a far lower profile on issues like tort liability reform, corporate taxation, capital gains tax increase, double taxation of dividends, and other issues of importance to the Company and its shareholders.
Embracing public policy positions that are contrary to the economic interests of consumers who buy Company products, or the preservation of the free-enterprise system as a whole, harms shareholder value.
Absent a system of reporting, shareholders cannot properly evaluate the Company’s process by which it takes, prioritizes and promotes its public policy positions.
Ironically, while anti-business activists are now coddled and funded by Wal-Mart, free-market advocates, who defend the company’s right to pursue its business model, are treated with hostility by CEO Mike Duke and Wal-Mart's management. This antagonism is so complete that Wal-Mart actually had to apologize to NLPC in 2007 for planning “surveillance” on us after we filed a shareholder proposal asking Wal-Mart to disclose its giving to interest groups.
Since we filed our resolution in late 2009, public opposition to Obama’s health care takeover has reached overwhelming levels despite Wal-Mart’s much ballyhooed support. Cap and trade is thought to be dead on Capitol Hill, while the “science” that undergirds global warming, seems to be falling apart. Today’s Wall Street Journal has an interesting editorial on this score. In 2005, then-CEO Lee Scott drank so much of the Edelman Kool-Aid that he claimed global warming was causing hurricanes, an area way outside his expertise.
Is Wal-Mart Too Liberal? (Newsweek)