Press Release from Responsible Wealth
For immediate release - May 28, 2004
Contact: Betsy Leondar-Wright, (617) 423-2148 x113

Shareholders Ask: Does Wal-Mart Widen the Wealth Gap?

CEO Makes 897 Times Pay of Average Wal-Mart Worker

BOSTON — “Who’s sharing in Wal-Mart’s success?” Shareholders will ask the company that question at the Wal-Mart annual meeting on June 4 in Fayetteville, Arkansas.

A resolution filed by members of Responsible Wealth asks Wal-Mart to report on the distribution of stock options awards by gender and race.

According to the 2004 proxy statement, Wal-Mart distributed nearly 14 million options to employees in 2003, with 13% going to the five highest paid officers, who are 0.00033% of the company’s employees. All five are men.

Margaret Covert, Shareholder Action Coordinator of NorthStar Asset Management, lead filer of the proposal, says, “Wal-Mart puts forth an advertising image of improving the lives of all its employees. Our resolution simply asks them to explain how much or how little of their tremendous stock option wealth ends up in the pockets of women and employees of color.”

Wal-Mart, the biggest private employer in the U.S. with over a million employees, could be credited with single-handedly widening the national wealth gap.

• Wal-Mart employees average only $8.23 an hour in wages ($329 for a 40-hour week). By contrast, CEO Lee Scott received $295,530 a week in 2003. More than 62% of his $15.3 million in compensation was in the form of stock options or restricted stock.

• Wal-Mart is facing one of the largest gender discrimination suits in history, potentially representing 1.6 million former and current women employees. The suit alleges that women were paid about 5% less than men doing similar jobs.

• Wal-Mart currently faces 30 other lawsuits over overtime pay and other labor law violations. In 2001 the company paid a reported $50 million to settle a suit over “off-the-clock” work, according to the Associated Press.

• In 2000, Wal-Mart’s own auditors found 1,371 violations of child-labor laws and 60,767 instances of workers lacking required breaks, according to the New York Times.

• Wal-Mart workers pay double the share of health costs as the average Fortune 500 company (40% compared with 20%), according to the Institute for Southern Studies, who also found that taxpayers spend an average of $420,750 to subsidize the average Wal-Mart store through welfare programs used by employees.

• State and local governments have given Wal-Mart more than $1 billion in economic development studies, according to a recent study by Good Jobs First.

• Five of the wealthiest ten Americans are Sam Walton’s heirs, with over $20 billion each.

Scott Klinger, co-director of Responsible Wealth, says, “The map of stock option distribution will reveal an important view of who holds the real power within Wal-Mart and whom the company values.”

Last month, Responsible Wealth presented a similar proposal to Coca-Cola shareholders; the proposal was supported by 6% of shareholders. Ten percent of Verizon shareholders and 7% of Exxon-Mobil shareholders supported a similar resolution with those companies. Responsible Wealth also filed resolutions this year with Wells Fargo and American International Group which seek to link CEO pay with predatory lending practices.

Responsible Wealth (www.responsiblewealth.org) is a national network of affluent Americans who are concerned about deepening economic inequality and advocate widespread prosperity.

Responsible Wealth, 29 Winter Street, 2nd Floor, Boston, MA 02108.
Voice: 617/423-2148 Fax: 617/423-0191.
© 2004 Responsible Wealth. All rights reserved.