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Wal-Mart shrinks board to 12, founder's son to retire
[CHICAGO] Wal-Mart Stores Inc said on Wednesday it will shrink its board by three members to 12, bringing it closer to US corporate norms in a move the largest US retailer hopes would allow it to respond more nimbly to rapid market changes.
The change will take place after Wal-Mart's annual shareholders' meeting on June 3, it said in a statement.
The revamp includes the retirement of Jim Walton, 67, the youngest son of late Wal-Mart founder Sam Walton, after 11 years on the board, the retailer said. His son Steuart, 34, has been nominated for a board seat.
Also departing are Aida Alvarez, a former member of US President Bill Clinton's cabinet, retail industry veteran Roger Corbett, and Mike Duke, who was Wal-Mart's chief executive from 2009 to 2014.
Wal-Mart, which posted a double-digit profit decline last year as the US dollar appreciated and costs rose as it hiked entry-level wages, said a smaller board would lead to better and faster decision-making.
The average board size for companies in the Standard & Poor's 500 index was 10.8 last year, according to the Spencer Stuart board index.
"The changes we are making are designed to maximize our effectiveness as we adapt to ever-evolving customer requirements," James Cash, lead independent director, said in the statement.
Both Alvarez, 66, a member of the auditing committee, and Mr Corbett, 73, the former CEO of Australian retailer Woolworths Ltd, had been on the board for a decade, the normal tenure for independent directors, Wal-Mart said.
Mr Duke's departure two years after leaving the CEO post is also in line with historical standards, it said.
Wal-Mart also said Wednesday that current CEO Doug McMillon's total compensation, including cash and stock, was valued at US$19.8 million in the year ending Jan 31, up from US$19.4 million in 2014.
Last year, Wal-Mart's operating income fell 11 per cent to US$24.1 billion and sales dropped 0.7 per cent to US$482 billion, reflecting a US$1 billion outlay to raise wages and the firmer US dollar, which cut the value of overseas sales.
Excluding currency impacts, Wal-Mart's sales rose 2.8 per cent to US$499.4 billion.
Its core US operations have shown some improvement, with sales at existing stores rising one per cent last year, excluding fuel. Greg Foran, head of the US business, saw his compensation fall to US$11.5 million from US$19.5 million, as his stock awards were lower after a big allocation last year due to his promotion.