The hits keep coming for Wal-Mart (wmt) -- after posting disappointing earnings earlier this month, the big-box retailer was dealt news that advisory firms like ISS and CTW Investment Group are advising shareholders to vote against the company's executive compensation package and -- in the case of ISS -- support a resolution that would oust Chairman S. Robson Walton -- first-born son of founder Sam Walton -- and elect an independent director.
Because the Walton family controls the majority of shares in Wal-Mart and because shareholder votes on executive pay are non-binding, it's unlikely that these calls will lead to any meaningful changes at the company. But these events do symbolize growing dissatisfaction with the firm after years of lackluster sales growth.
With all the hype surrounding these moves, it may be sour labor relations that ultimately hobbles Wal-Mart going forward. Next week, activists associated with the labor-backed group OUR Walmart will stage strikes and protests at both the shareholders meeting in Bentonville, Ark. and at Rob Walton's home in Arizona. Workers will be demanding regular schedules that give them a steady 40 hours of work per week and annual pay of at least $25,000.
One group that plans to protest Wal-Mart's labor practices next week is Walmart Moms, composed of mothers struggling to make ends meet as Wal-Mart associates. Linda Haluska, a 52-year-old Wal-Mart employee told reporters on a telephone press conference Thursday about her struggles trying to make living. Haluska has worked at a Walmart store in Glenwood, Ill. for eight-and-a-half years. She makes $13.25 per hour, and while she has secured for herself a regular night-shift, she says that it is difficult to arrange her schedule so that she can spend time with her kids and that what she makes is simply not enough to support a family.
Haluska said her son recently decided not to attend his prom because she couldn't afford a tuxedo rental. "That's no conversation any mother, especially one who works for a company as successful as Wal-Mart, should have with their child," she says.
Another Wal-Mart mom, Lashanda Myrick of Denver, Colo, has worked at the company for about a year. She says she takes home an average of $375 every two weeks after working the 28 to 32 hours per week her store regularly gives her. At that salary, she must rely on public assistance regularly and chooses between providing her son or daughter with the clothes they need.
Wal-Mart, however, maintains that there are plenty of opportunities for workers like Myrick and Haluska to advance and earn the pay they deserve. "When you sit down and look at the facts, you'll find that Wal-Mart provides its associates with more opportunities for career growth and economic security for their families than most other companies in America," says Kory Lundberg, a spokesperson for the company. Lundberg says Wal-Mart gives full and part-time associates access to a retirement plan, health benefits, and educational opportunities. Wal-Mart also boasts that it promoted 170,000 people last year and that 75% of its management team started as hourly associates.
It's difficult to judge what effects these strikes are having on Wal-Mart. While same-store sales have declined in the U.S., that could easily be the result of competition from dollar stores and online retailers like Amazon. Just the same, these conflicts could lead to a bigger headache for Wal-Mart in the wake of changes at the National Labor Relations Board -- the independent agency that presides over labor disputes.
President Obama was able to finally appoint his desired choices for the NLRB in 2013, after years of Republican opposition prevented him from installing more labor-friendly appointees. In January, the new board filed a complaint against Wal-Mart for firing 19 workers after they staged short-term strikes and protests against the company, demanding higher wages and better working conditions.
Wal-Mart responded that these strikes were not part of a protected, organized union effort to protest working conditions, but sporadic, short-term incidents of absenteeism instead. Such strikes are generally less costly to workers because the workers return to work without missing much in pay and without giving the company time to hire replacement workers.
Work stoppages haven't been formally sanctioned by the NLRB before, and if the NLRB and federal courts begin to recognize these sorts of strikes as protected, it could motivate more workers to get involved with OUR Walmart. That certainly would make the executives down in Bentonville frown.