Wal-Mart

Remarks of Scott Klinger at Wal-Mart Annual Meeting

Fayetteville, Arkansas, June 4, 2004

Good Morning. My name is Scott Klinger and I am here to present this  proposal on behalf of shareholder NorthStar Asset Management and other members of Responsible Wealth, who are also Wal-Mart shareholders. Responsible Wealth is a national network of affluent Americans who are concerned about widening economic inequality in America.

This resolution calls upon Wal-Mart to report on the race and gender of those receiving stock awards from the Company. Wal-Mart’s compensation policies have come under increasing scrutiny and criticism, creating risks to our company’s reputation and potential large financial liabilities for shareholders.  A California judge is presently considering certification of a class action suit involving 1.5 million current and former female employees of Wal-Mart. The Institute of Southern Studies reports that taxpayers subsidize the average Wal-Mart  store $420,000 to pay for welfare programs used by our company’s low-wage workers. Our resolution seeks to examine how much of the stock option wealth of Wal-Mart is going to the people who created that wealth. All we know from the proxy statement is that the top five officers – all white men, received 13% of the company’s stock options last year. Five people out of 1.5 million employees received 13%  of the wealth coming from stock options.

It has been 35 years since Martin Luther King was assassinated and yet the racial wealth divide in America persists. In 2001 the average net worth of African American families was just $19,000 compared to $121,000 for white families. And in 2003 a black college graduate continues to earn $500,000 less over their lifetime than their white college classmates. What role do corporate compensation policies play in these disparities? Is the stock award wealth imparted by corporations flowing beyond its historical concentration in the hands of white men? These are the diversity questions of today and of the future.

Stock awards are the most valuable player awards given by the company. The distribution of stock options reveals where real power and responsibility lie within our corporation. Wal-Mart has a public commitment to building a diverse workforce. We believe workplace diversity and workplace equity must go together.

Stock awards represent a powerful way of distributing the wealth of the corporation, wealth we believe that is created not simply by executive officers, but by all employees working together to create shareholder value. It is often said, that no one got rich off of a paycheck, and while this is perhaps less true for senior executives of America’s corporations, few would argue with the contention that it is stock awards that convey significant wealth.

The question we ask is easily answered. Perhaps Wal-Mart already knows the answer. But to publicly disclose this answer requires an act of courage and leadership that our company is not yet prepared to make. Please support this resolution and send a message of encouragement and concern to Wal-Mart’s board and management.

Thank you.

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