Wal-Mart CEO to become regular 'associate'
Posted
Nov 24 2008, 02:28 PM
by
Anthony Mirhaydari
Rating:
Retailing behemoth Wal-Mart surprised the investing world the other day when it announced CEO H. Lee Scott Jr. would step down in February to serve a two-year stint as a "Wal-Mart associate" -- the term used for all regular employees.
Unlike door greeters or shelf stockers -- who pull down an average annual salary of $19,165 -- the Footnoted blog finds that Scott will be paid $1.1 million a year as chairman of the executive committee of the company's board of directors.
Although Wal-Mart is enjoying a resurgence as the economy slows, Scott's decision to call it quits now seems cowardly. After all, the structural issues that plagued the company before the economic winds shifted in its favor still exist: Its rural growth strategy is tapped out, it hasn't been able to crack the lucrative urban/suburban core as effectively as peers, and efforts to grow internationally have had mixed success.
Now is the time to address these issues, set the stage for long-term growth, and create a lasting legacy. Not only that, but the political landscape has changed dramatically with president-elect Obama's public support of the Employee Free Choice Act, a bill that would dramatically ease the ability of labor unions to organize workplaces.
Instead of addressing these issues, Scott will exit at the top and leave the tough decisions for successor Mike Duke, the current head of international operations that will become the company's fourth CEO.
An internal memo from Rob Walton, the eldest son of Wal-Mart founder Sam Walton, tries to paint a brighter picture. In it, he notes that the right time for a management transition is now, at a "time of strength and momentum for our company."
Disclosure: I don’t own or control shares in any of the companies mentioned. I can be contacted at anthony.mirhaydari@live.com
Related reading:
Why holiday may be 'Wal-Mart Christmas'
Recession's grim reaper can't catch Wal-Mart
Desperate times: Shoppers cut back on baby formula
Wal-Mart causing weight loss