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Wal-Mart CEO to become regular 'associate'

Posted Nov 24 2008, 02:28 PM by Anthony Mirhaydari
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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

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Comments

 

These big business execs are real pieces of work. And Rob Walton, "the right time for a management transition is now, at a time of strength and momentum for our company", how short-sighted can you be? Apparently, Mr. Walton, you believe it's smooth sailing ahead?? Do you think H. Lee Scott Jr. (call me "Stockboy", no pun intended) bailing out is good timing? For who? What kind of "golden parchute" is H. Lee Scott Jr. receiving? For $1.1 million a year you'd think he would see these times through. By the way, what's the pay for a "chairman of the executive committee of the board of directors/regular associate nowadays?

If the "motion" to consider the "motion" to consider the Employee Free Choice Act bill in the Senate would pass in their 110th U.S Congress, wich is highly unlikely, still Walmart Co. would find a way to squeeze their employees for that extra cent the CEO-to-Z's need to fly their private jets. And those of you naive enough to think any government is going to address the peasant needs, good luck. Meanwhile stay away from Walmart and stop whining.

i do not work for wal mart however their employees recieve the say competitive pay the that other employees recieve in thier area check with your local mom and pop grocery store what does the cashier make? check with the other super stores what do they make i would be willing to bet the pay is the same and almost certainly more than mom and pops. as far as warehouse work check your local businesses i'm again almost certain that both walmart and the other business pays the same. if glad manufacturing is paying starting wage of 13.00 so is walmart otherwise why would walmart still be in the business of one stop service

As usual the people have spoken...but no of them make sense.  The issues at hand...you better believe the time to bail is now, with Obama in office you can bet that unions will grab a foothold of a lot of companies, driving their cost to do business beyond reality.  Although, the saving grace right now is that he has chosen a very conservative group to lead his staff instead of a very left wing change team as was promised during his election, already i have heard hard core liberals are up in arms over these appointments!!!!  But it will be wait and see with the Unions and the Employee Free Choice Act.

We all know the catch 22 with Walmart, they can provide goods at a very inexpensive price, why....their labor costs are very low, so they can drop cheap prices to the public...in this economy bring it on.  I have said this over and over and over, we need to go back to good business fundamentals, competitive pricing, cost control and excellent customer service, BUT we need a shift from the service sector to the manufacturing sector, remember the service sector is built on consumers spending, well that being said how do you expect a WalMart employee to spend, spend, spend on $8.00 per hr as a PT associate, with no medical benefits????  I must have missed that class when i went to college!!!

And so it goes and so it goes where it will land no one knows.

walmart does offer insurance 80/20 and sick time, profit sharing and other benefits this is for f/t employees  if you check with your work place what is the difference in benefits. if a p.t. associatate is making $8.00 that is more than alot of other companies pay. wal mart will never become union and . there probally is not one person in bentonville that wants an union let alone the state of arkansas

nor do i very seldom shop at walmart. their clothing is cheaply made the meat that they sell is more than the other grocery places. the point is they are keeping people employeed and the unemployment rate for the arkansas is 5.4 with nwa only 3.4 i agree if you don't like walmart don't shop there but don't whine there are no jobs when they are still doing better than evertone else right now.

I think I would rather pay a higher price for a product made by one of my fellow Americans, than a cheaper price for a product made by a virtual slave in China.

Thats how it used to be before all the good paying Jobs were taken out of this country by greedy Businesses.

I have been a stock holder with Wal-Mart for 27 years. I have watched all the ceo's starting with Mr. Sam. All I have to say is good ridance regardless of the timing for Lee(Winnie Fuzz) Scott to step down.He lacked compassion for the regular hourly employee but favored his higher management by increasing their yearly bonuses and compensation packages while cutting the hourly employees. He should remember that "what goes around comes around" will be applied to him some day.I have talked to many hourly employees over the years in many stores about this.I stand by this comment.

then i guess walmart must be an o.k. place to work if you've been there 27 years. if i did not like what they are or how they run their business  i would find a different job. i agree higher management gets more than the employee which is o.k. as long as it is within reason. after all most company's allow their employees to work up the ladder it's all about what you want to do. and if you decided you didn't want to be an 8-5 employee and wanted to bust your butt to get somewhere shouldn't you get rewarded for it i would also pay extra for american except americans have gotten lazy and won't work unless they make more than they think they are worth. i'm sure you are happy with your stock right now mine is worth nothing. isn't it great some one at walmart knew what they were doing

Wal-Mart the megastore people love to hate. Like it or not the old tightwad did it. In the early days, men and women slept in the same NY hotel room to save money on buying trips. Times change, they get different rooms now in Beijing. You want to Unionize them..fine do it for 100% of the people in this country..let the UAW represent all of us, pay all of us up to $83 an hour in wages and benefits plus Viagra. Then in two years see what all that money will buy you if you are lucky enough to still be working because now you are living in a socialist system. I have worked in both and with a union you have people who are doing less complaining about how much they have to do and in general being much more unhappy.

The wages at WalMart are no different than a similar position in a different store.  As for benefits, they're really not something to turn your nose down on.  Yeah, it took a while for them to come around, but even p/t associates become eligible for benefits after a, albeit longer, waiting period.  But tell me a company that is willing to pay a good chunk of insurance costs for an employee that works just a few days a week?  People, I think, are so stuck with the stigma of "Walmart is evil" or whatever, that they fail to see the larger picture:  employment of a LOT of people who would otherwise be on welfare, working to the best of their abilities and capabilities to better themselves.  Yes, I did drink the KoolAid (which I am proud to admit to) and can honestly say that I am proud of my company.  How many people can HONESTLY say that?

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