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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

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

Comments

 

I shop at Wal-Mart because I can't afford to shop any where else. I don't have a problem with them or their items cause I know you get what you pay for. I do have a problem with CEO's and owners of large companies that pay themselves enormous salaries but when the business starts to suffer they do not cut their pay but instead lower the pay of the regular workers. Then if the business fails the government steps in and pays off their bills and creditors. I think that if you run a company and it gets in finacial trouble the people in charge who made all the bad decisions should take a pay cut to try and fix what they messed up in the first place not run to the government in order to keep their multiple houses and exotic cars. There is nothing holding these CEOs resposible for their actions.

Wal Mart has succeeded in becoming the largest retailer in the world and they have also succeeded in putting more small businesses out of business than any corp. in the world.  What started as MADE IN AMERICA now has become MADE IN CHINA.  Sam would roll over in his grave.  Helen has died now and none of the kids are worth a damn.  The little store that you go to thats gonna save you money has cost more jobs and hurt more people than even the government.  Americans still want to work, and will do a good job, but all our large corps. have followed the wal mart path and went off shore.

Rae --

In 20 years of working with employers around the country, I have never seen an employer "lower pay" of workers.  I've seen a handful create two tier wage systems in which new employees are on a lower salary scale than more senior ones -- a measure necessary often because of competition and the fact that, in good times, the business was frankly too generous.  But lower pay?  Sorry, doesn't happen.

And no one "gives" CEOs their jobs ... any more than star athletes, entertainers, surgeons, or other high priced talent.  And once the business falters, often through no fault of the CEO, but from circumstances beyond his or her control or the failings of subordinates, they are out of a job -- and typically never get a similar one.  Lee Scott worked his way up through the company, as did David Glass before him.  And Sam Walton ... he built the company from nothing.

Hey, you "Made in America" folks ...

Does that mean that WMT shouldn't have stores in every major country on the planet, and send the profits home to American shareholders ... and, by the way, if you have a retirement savings plan and invest in an index fund, a big cap fund, or any number of funds -- you own WMT.

Rae i can shop at macy's, dillard's and any other department store and get clothing cheaper than at walmart the difference is i shop sale items. As for lowering wages it does not happen unless you are demoted or take adifferent job within that company.And lastly where is reported that the Scott did something wrong that would warrant a paycut for running a successful business. If walmart was in trouble like the auto workers then you have the right to assume that.

What is lost on the anti-union crowd is the most basic principal of organizing. If there wasnt bad mangement there would be NO NEED for a Union. If the anti- union crowd blames the UAW to what has happened to the auto industry they did not come with guns to the negotiation tables.

If the lies of corporate boys like the chamber of commerce have spent 200 million to propagandize the country to believe the Unions as socialist gangsterthen you have bought into the class warfare. Where by the lower class argues with the middle class over table scrapes provided by the wall street. Mean while wall street continues to collect million dollar bonus and are never held accountable for selling off our jobs and country..

I have seen what happens when a Wal-Mart moves into a new area. Comparative business' fold up and the standard of living goes to crap because they only pay nominal wages (unless your the management team for that store, who can make 6 digit yearly bonuses (excluding their regular salary which can be 6 digits if you are the general manager of a large super center).  I am the store manager for a regional grocery store chain and we have lost a lot of stores over the last few years due to a Wal-Mart.  My company is also unionized.  I believe that unions have their place.   I know that a few years ago employees in a Wal-Mart attempted to organize.  The company threatened to close the store if employees attempted to organize.  The employees pressed the issue and Wal-Mart came in and told them they had 90 days as this was their last and final notice. This store was very profitable for them, but they decided to forfeit a good store instead of the good for the employees.  Wal-Mart employees may get so-so health care benefits, but did you know that they make their employees take classes on how to work the state welfare system, how wrong is that!!!!, This is our hard earned taxes being spend on this, just so a company get away with not paying for better health care.  It all comes down to the all might dollar and how much more important that dollar is over the rights of your common everyday hourly employee.  I have lost quite a few good employees to Wal-Mart over the years, they promise the world to them with better wages, more hours, full time status, benefits, vacation. The only thing is almost half of them came back to work for me or my company after only receiving empty promises. I rarely shop at my local Wal-Marts (thats right Wal-Marts), where I live there is one  every 15 - 20 miles apart in 3 different directions.  There products are cheap and the food that they sell is poor quality as well.  Any one can sell a box of corn flakes or a can of corn. Many american families base their meals on meats and produce.  First of all, Wal-Mart does not employ any instore meat cutters.  The product that they sell is prepacked. Meaning that you slap a tag and place it in the sales case.  Ever look at the label and question why it is packaged with up to 18% solution? That is how you can sell ground meat up to 14 days.  I sell ground beef in my store and it gets a 24 hour self life, freshness is the key.  They may sell an item for $.40 less per pound than the competitive grocery store, but you may spend as much a $3.00 for salt water solution.  Read the labels and figure it out, they don't want to see the numeric value on the label, they spell it out  (Ex Eighteen Percent Solution in the product label) Americans need to get smarter and start spending their money in local companies to keep the local economies going instead of sending it across the pond to China and other counties.  Save money and live better...Walmart  I say what money did you save while your standard of living goes to crap while Wal-Mart is LAUGHING ALL THE WAY TO THE BANK!!!!!

I have seen what happens when a Wal-Mart moves into a new area. Comparative business' fold up and the standard of living goes to crap because they only pay nominal wages (unless your the management team for that store, who can make 6 digit yearly bonuses (excluding their regular salary which can be 6 digits if you are the general manager of a large super center).  I am the store manager for a regional grocery store chain and we have lost a lot of stores over the last few years due to a Wal-Mart.  My company is also unionized.  I believe that unions have their place.   I know that a few years ago employees in a Wal-Mart attempted to organize.  The company threatened to close the store if employees attempted to organize.  The employees pressed the issue and Wal-Mart came in and told them they had 90 days as this was their last and final notice. This store was very profitable for them, but they decided to forfeit a good store instead of the good for the employees.  Wal-Mart employees may get so-so health care benefits, but did you know that they make their employees take classes on how to work the state welfare system, how wrong is that!!!!, This is our hard earned taxes being spend on this, just so a company get away with not paying for better health care.  It all comes down to the all might dollar and how much more important that dollar is over the rights of your common everyday hourly employee.  I have lost quite a few good employees to Wal-Mart over the years, they promise the world to them with better wages, more hours, full time status, benefits, vacation. The only thing is almost half of them came back to work for me or my company after only receiving empty promises. I rarely shop at my local Wal-Marts (thats right Wal-Marts), where I live there is one  every 15 - 20 miles apart in 3 different directions.  There products are cheap and the food that they sell is poor quality as well.  Any one can sell a box of corn flakes or a can of corn. Many american families base their meals on meats and produce.  First of all, Wal-Mart does not employ any instore meat cutters.  The product that they sell is prepacked. Meaning that you slap a tag and place it in the sales case.  Ever look at the label and question why it is packaged with up to 18% solution? That is how you can sell ground meat up to 14 days.  I sell ground beef in my store and it gets a 24 hour self life, freshness is the key.  They may sell an item for $.40 less per pound than the competitive grocery store, but you may spend as much a $3.00 for salt water solution.  Read the labels and figure it out, they don't want to see the numeric value on the label, they spell it out  (Ex Eighteen Percent Solution in the product label) Americans need to get smarter and start spending their money in local companies to keep the local economies going instead of sending it across the pond to China and other counties.  Save money and live better...Walmart  I say what money did you save while your standard of living goes to crap while Wal-Mart is LAUGHING ALL THE WAY TO THE BANK!!!!!

unflooled --

If you hate your "Wal-Marts," why do you shop there?  Same reason as the rest of us.

And get your facts right.  Wal-mart has never shut a store in the US that was unionized.  A meat and seafood department in a Texas store unionized right before Wal-Mart (like Kmart SuperCenters and Target SuperCenters) went to pre-packaged meat.  Wal-Mart (as they did with all stores) got rid of the meatcutters (just as they would have without a union).  Union's have no ability to change business decisions such as that.

But Wal-Mart is not "evil" for operating there business in such an attractive way that even you -- a hater and direct competitor -- still shops there to do what is best for your family.  The rest of us have the same right.

unflooled consumer-you are right!  50% of my state's funded health care system  are employees of Wal-Mart.   I have nothing against Wal-Mart employees (my brother works there), and Wal-Mart is not breaking any laws.    Bottom line, taxpayers are paying for their health care that I feel the 2nd largest employer should.

   My company sells product to Wal-Mart and they really know their cost and are great business people.   They actually tell you what they will pay for your product.   Take it or leave it is their stance.   In my town now, they are it.   So we make product for Wal-Mart and sell it to them below our cost to cover overhead and get tonnage.   Of course, the product we make for them is our lowest quality.

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