A person bearing the “Walton” surname will no longer be chairman of Wal-Mart Stores (WMT) for the first time in the company’s history.
But that doesn’t mean the world’s largest retailer isn’t keeping the role in the family.
At Walmart’s annual shareholder meeting on Friday in Fayetteville, Ark., before a crowd of 14,000 people, the company announced that Rob Walton, the 70-year-old chairman and son of founder Sam Walton, would step down after 23 years, ceding his place to his son-in-law Greg Penner, effective after the meeting ends later today.
Rob Walton, who succeeded his father as chairman, will stay on as a director, and be one of three Waltons on the board, along with his brother Jim, and son-in-law Penner, a former Goldman Sachs (GS) analyst who later took on top jobs at walmart.com. Penner, 45, is married to Rob’s daughter Carrie.
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The announcement comes despite pressure from some investors clamoring for an independent chairman, arguing that a chairman who is not a member of the family would improve corporate governance at the largest company in the world, according to the Fortune 500, a particularly important consideration as Walmart deals with a U.S. probe into allegations it violated anti-bribery laws overseas.
But given that Walton family owns 50.9% of company shares, any outside proposals opposed by the clan have virtually no chance of getting through.
According to a Reuters report, Walmart has tried to quash the push for an independent chairman coming from about 25% of shareholders. Similar proposals were submitted to a shareholder vote in the last two years but this year, Walmart asked the Securities and Exchange Commission to exclude the proposal, and was turned down.
The company in any case dismisses that idea that its board lacks independence: its lead director is independent, as are 11 of 15 members (one director, former Coke CEO Doug Daft, is not standing for re-election, shrinking the board size by one slot from 16 after the meeting), said Walmart spokesman Randy Hargrove. What’s more, Walmart separates the roles of chairman and CEO.
The nomination of Penner continues a changing of the guard at Walmart: last year, Doug McMillon, 48, was named as CEO. The board has in recent years added Yahoo (YHOO) CEO Marissa Mayer and Instagram CEO Kevin Systrom to shore up its tech credentials as it develops its e-commerce muscle. (For a profile of McMillon, please read this Fortune piece.)
“This demonstration demonstrates Walmart’s commitment to long-term succession planning,” said Rob Walton.
Walmart’s U.S. comparable sales growth has resumed, albeit modestly, and its e-commerce is growing, though at a more modest pace than McMillon wants. At the company’s annual powwow in Arkansas this week, with thousands of stores works in from around the world, the company has announced a slew of initiatives to motivate employees and improve its overall performance.