The Securities and Exchange Commission (SEC) will not allow Wal-Mart to exclude from consideration an NLPC-sponsored shareholder proposal asking for a report on the company’s lobbying priorities. Wal-Mart suddenly finds itself on the opposite side of public opinion on ObamaCare and cap and trade, after having embraced both last year.
On January 9, Wal-Mart sought to preclude a shareholder discussion of these issues by asking the SEC if it could exclude our resolution on the grounds that it “does not focus on, or implicate, a significant social policy.” Oh, really?
The SEC disagreed. Our resolution must now appear in the Wal-Mart proxy, and I will have the right to speak at the annual meeting in early June. Even after losing at the SEC, Wal-Mart still refuses to address the issues raised by the resolution. In its statement of opposition, it can’t even bring itself to mention ObamaCare or cap and trade.
Wal-Mart does claim that that producing a report on its lobbying priorities would be “complex and expensive undertaking.” But the company has already paid tens of millions to the Edelman public relations firm to reorder public perceptions of its priorities, as we document in our Special Report titled Wal-Mart Embraces Controversial Causes: Bid to Appease Liberal Interest Groups Will Likely Fail, Hurt Business.
Wal-Mart’s Edelman-guided shift to the Left began under former CEO H. Lee Scott, and has accelerated under current CEO Mike Duke. (in photo). On February 25, Duke announced more mandates on its suppliers to cut carbon emissions, seemingly oblivious to the shaky ground on which global warming “science” now rests. (How far has the company founded by Sam Walton strayed from it roots? Scott has just been nominated for a seat on the Goldman Sachs board.)
Here is the full text of our “Lobbying Priorities Report” resolution and supporting statement:
Whereas: 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.
Statement of Support:
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.
Don’t waste your time reading all of this mush, but here is Wal-Mart statement of opposition:
As with most large, global companies, a wide range of public policies and legislative initiatives affect our company, our operations, our financial performance and the value of our stock. Those policies and initiatives relate to such varied matters as income tax rates, tariffs on goods, product safety, environmental regulation, renewable energy, and interstate trucking, and encompass many other laws, rules, and regulations impacting our company’s business operations. Walmart addresses such public policy issues when and in a manner the Board and our management decide are appropriate and in the best interests of our company.
The Board believes that for Walmart to pursue most effectively its own legislative and public policy initiatives and to preserve Walmart’s competitiveness in the marketplace, the public policy issues of interest to Walmart, the priorities Walmart gives to such issues, the rationales for such prioritization, if, when and how Walmart chooses to address those issues and how Walmart determines to enter alliances and associations should not, as a general rule, be widely publicized. The adoption and implementation of the proposal would result in public disclosure of such matters. Most, if not all, of Walmart’s competitors in the retail industry do not issue a report similar to the one the proposal requests. If Walmart were to issue such a report, any strategic advantage, as well as our ability to pursue our public policy initiatives effectively and without counterproductive or untimely publicity regarding our company’s efforts, could be negatively affected. Such effects of the requested report would not be in the best interests of our shareholders.
Producing a report on such matters would be a complex and expensive undertaking, an expense that, in the opinion of the Board, would far outweigh any benefit to our shareholders. Further, the policy issues affecting Walmart’s business operations often prove to be extraordinarily complex. Properly addressing such policy issues requires a detailed understanding of a complex set of facts. The content of pending legislation can change swiftly and dramatically and may sometimes necessitate a change in our company’s position on a particular piece of legislation. Because of the speed and urgency with which Walmart may need to respond to public policy issues, Walmart cannot wait for the next shareholders’ meeting to seek guidance from its shareholders on whether or how to address such issues. Moreover, which public policy issues are of interest to Walmart and how those issues are identified and prioritized may change frequently in response to changing circumstances. In sum, the report requested by the proposal not only would impose an impediment to the effective conduct of Walmart’s public policy efforts, but would also require an expenditure of Walmart’s resources and management’s time that ultimately would not be in our shareholders’ best interests.
For the above reasons, the Board recommends that the shareholders vote AGAINST the proposal.
Is Wal-Mart Too Liberal? (Newsweek)