Company Name: Wal-Mart Stores, Inc..
Public Availability Date: March 28, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
January 24, 2007
OVERNIGHT DELIVERY VIA FEDERAL EXPRESS
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Notice of Intent to Omit from Proxy Materials Shareholder Proposal of the
American Federal of Labor and Congress of Industrial Organizations
Ladies and Gentlemen:
Wal-Mart Stores, Inc., a Delaware corporation ("Wal-Mart," or the "Company"),
files this letter under Rule 14a-8(j) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), to notify the Securities and Exchange
Commission (the "Commission") of Wal-Mart's intention to exclude a shareholder
proposal (the "Proposal") from the proxy materials relating to the solicitation
of proxies in connection with Wal-Mart's 2007 Annual Shareholders Meeting (the
"2007 Proxy Materials"). The Proposal was submitted by the American Federal of
Labor and Congress of Industrial Organizations (the "Proponent"). Wal-Mart asks
that the staff of the Division of Corporation Finance of the Commission (the
"Staff") not recommend to the Commission that any enforcement action be taken if
Wal-Mart excludes the Proposal from its 2007 Proxy Materials for the reasons
described below. A copy of the Proposal and related correspondence is attached
to this letter as Exhibit A. In accordance with Rule 14a-8(j), six copies of
this letter and its attachments are enclosed.
Wal-Mart intends to commence the printing of the 2007 Proxy Materials on or
about April 12, 2007, so that it may begin mailing the 2007 Proxy Materials no
later than April 16, 2007. Accordingly, we would appreciate the Staff's prompt
advice with respect to this matter.
I. The Proposal
The Proposal urges the Company's Board of Directors (the "Board") to disclose in
a separate report to the Company's shareholders the Company's relationships with
its executive compensation consultants or firms. The Proposal specifies that,
for each consultant or firm retained by the Company, the Board or a committee of
the Board, to advise on executive compensation policies or plans (each, a
"Consultant"), the report should disclose: (i) the entity that retained the
Consultant and whether any member of the Company's senior management
participated in the process of selecting or retaining the Consultant; (ii)
whether the Consultant or one of its affiliates has provided, at any time during
the last five years, non-compensation related services to the Company or one of
its affiliates, and (iii) the Company's policies and procedures regarding
non-compensation-related services provided by the Consultant.
II. Communications with the Proponent.
The Company received the Proposal from the Proponent on December 12, 2006. In
telephone discussions with the Proponent after that date, the Company has
explained to the Proponent that, in view of the requirements of Item 407(e) of
Regulation S-K of the Commission ("Item 407(e)") and the disclosures that the
Company intends to make in its 2007 Proxy Materials in response to those
requirements, the Company will provide information to its shareholders that
substantially implements the Proposal. The Company informed the Proponent that
it would comply with the disclosure requirements of Item 407(e). Therefore, the
Company requested that the Proposal be withdrawn by the Proponent. In addition,
the Company sent to the Proponent a letter dated January 15, 2007, a copy of
which is attached hereto as Exhibit B, in which the Company offered to include
the following disclosure in the 2007 Proxy Statement, if the Proponent were to
withdraw the Proposal:
the name of each Consultant that advised the Company and that was available to
advise the Compensation, Nominating and Governance Committee of the Board (which
sets the compensation of the Company's senior executives) (the "CNGC") during
the fiscal year to end January 31, 2007;
the position of the Associate (the Company's designation for one of its
employees) who engaged such Consultant and that manages the Company's
relationship with such Consultant;
the nature and scope of the assignments of each of the Consultants; and
the material elements of the Company's instructions to each of those
Consultants in connection with any engagements.
The Company also advised the Proponent that its Consultants do not generally
provide any "non-compensation-related services" to the Company and, as a result,
the Company does not have any policies or procedures to disclose regarding
"non-compensation-related services" provided by a Consultant. In addition, the
Company advised the Proponent that it is aware of an organizational design
project on which one Consultant worked for an international operating subsidiary
of the Company in the last five years, but that the fees for that work were
insignificant in amount both to the Company and the Consultant. In this regard,
the Company indicated that it would disclose in the 2007 Proxy Materials that
Consultants generally only advise the Company on compensation matters but have
been and, in the future, may be engaged to assist the Company with
"non-compensation-related services." In view of these matters, the Company
requested that the Proponent withdraw the Proposal.
On January 17, 2007, the Proponent, via its representative Heather Slavkin,
advised the Company that it was refusing to withdraw the Proposal.
III. Ground for Exclusion
The Company seeks to omit the Proposal from its 2007 Proxy Materials on the
ground that the Proposal has been substantially implemented and is thus
excludable from the 2007 Proxy Materials under Rule 14a-8(i)(10).
A. The Company has Agreed to Fully Implement the Proposal.
The Company requests that the Staff confirm that it will not recommend any
enforcement action if Wal-Mart excludes the Proposal from the 2007 Proxy
Materials after complying with the Company's offer in the letter of January 15,
2007, a copy of which is attached hereto as Exhibit B. With respect to the first
requirement of the Proposal's resolution, the Proponent requires that the
Company report who engaged each Consultant and whether any member of the
Company's senior management participated in the process of engaging or retaining
such Consultant. In accordance with subparagraph (3)(iii) of Item 407(e), in the
2007 Proxy Materials, the Company will: (i) identify each Consultant, and (ii)
state whether such Consultant was engaged directly by the CNGC, the Company, the
Board, or another person. As a part of this disclosure, the Company expects to
disclose the position with the Company of the person who engaged or retained any
of the Consultants on behalf of the Company. As a result of these obligations
and undertakings, the Proposal's first specific information requirement will be
completely satisfied.
With respect to the second requirement of the Proposal's resolution, the
Proponent requires that the Company disclose, as to each Consultant, whether
that Consultant or an affiliate thereof has provided "non-compensation-related
services" to the Company or one of its affiliates within the last five years.
This requirement does not ask for a list of the services rendered, but only a
statement as to whether or not the Consultant has engaged in
"non-compensation-related services." As such, the Company agreed to disclose in
the 2007 Proxy Materials that the Consultants "generally only advise the Company
on compensation matters but have been and, in the future, may be engaged to
assist the Company with `non-compensation-related services.'" The Company
believes that such statement would fully implement the second requirement of the
resolution, while remaining consistent with the principles-based disclosure
concept of Item 407(e).
With respect to the third requirement of the Proposal's resolution, the
Proponent requires that the Company disclose its policies and procedures
regarding "non-compensation-related services" provided by Consultants. This
requirement does not purport to require disclosure of whether or not the Company
has such policies, it only requires disclosure of such policies and procedures
as the Company has in place. The Company has indicated to the Proponent that it
currently has no such policies and procedures, and as a result has nothing to
report under such requirement.
Based on the foregoing, it is clear that the Company has agreed to fully
implement the Proposal, and as such, the Proponent, in good faith, should have
withdrawn its Proposal. As stated above, the Company requests that the Staff
confirm that it will not recommend any enforcement action if Wal-Mart excludes
the Proposal from the 2007 Proxy Materials after complying with the Company's
offer in the letter of January 15, 2007.
B. Based on the Company's Circumstances the Proposal will be Substantially
Implemented by Virtue of Item 407(e) of Regulation S-K
Regardless of the Company's offer to fully implement the Proposal, under Rule
14a-8(i)(10), a shareholder proposal is excludable from a company's proxy
materials if "the company has already substantially implemented the proposal."
Additionally, as the Staff of the Commission has noted, a proposal need not be
specifically implemented to be excluded under the principles of Rule
14a-8(i)(10). See Release No. 34-20091 (August 16, 1983) (which stated that a
company need not have "fully" implemented a proposal to avail itself of an
exclusion under the provision of the precursor of the current version of Rule
14a-8). Pursuant to its 1983 interpretation, the Commission has stated that a
determination that a company has substantially implemented the proposal will
depend upon whether its particular policies, practices and procedures compare
favorably with the guidelines of the proposal. See Texaco Inc. (available March
29, 1991). As amended in 1998, Rule 14a-8 reflects the view of the 1983
interpretation by adopting the current language of Rule 14a-8(i)(10).
In addition, in responding to no-action requests, the Staff has concurred in the
past that a company need not comply with every particular of a proposal in order
for the proposal to be substantially implemented. For example, the Staff has
permitted exclusion of a proposal under the principle of substantial
implementation where the company had implemented a number, but not all, of the
parts of a multi-part proposal. See Columbia/HCA Healthcare Corp. (available
February 19, 1998), wherein the Staff concurred that a proposal could be
excluded where the company had implemented three of four actions requested by
the Proposal.
The Company further asserts that under its circumstances, if the Company meets
the disclosure requirements of Item 407(e), the Company will have substantially
implemented the Proposal. As a result, by the time the shareholders would first
see the Proposal were it included in the 2007 Proxy Materials, the Proposal
would be rendered completely moot by the disclosure contained in those proxy
materials.
Under Item 407(e), the Company will disclose the identity of the Consultant and
the position of the Associate who engaged the Consultant (meeting the first
requirement of the Proposal's resolution) and the nature and scope of the
Consultant's assignment, as well as the material elements of the instruction or
directions given to the Consultant with respect to the performance of its duties
under the engagement. Furthermore, because the Company does not have any
material or significant "non-compensation-related services" provided by any
Consultant during the last five years to disclose, the Company asserts that it
has substantially met the second requirement of the Proposal's resolution.
Lastly, because the Company does not have policies regarding
"non-compensation-related services," the third requirement of the Proposal's
resolution is moot.
In view of the foregoing, the Company submits that, as a result of the
disclosure the Company must include in its 2007 Proxy Materials to comply with
the disclosure requirements of Item 407(e), the Proposal is substantially
implemented and the Company may exclude the Proposal, in whatever form it was
submitted, from the 2007 Proxy Materials in reliance on Rule 14a-8(i)(10).
IV. Conclusion
Based on the foregoing representations, Wal-Mart hereby requests that the Staff
confirm that it will not recommend any enforcement action if Wal-Mart excludes
the Proposal from the 2007 Proxy Materials, in whatever form it is submitted.
Should you disagree with the conclusions set forth herein, we would appreciate
the opportunity to confer with you prior to the issuance of the Staff's
response. Moreover, Wal-Mart reserves the right to submit to the Staff
additional bases upon which the Proposal may properly be excluded from the 2007
Proxy Materials.
By copy of this letter, the Proponent is being notified of Wal-Mart's intention
to omit the Proposal from its 2007 Proxy Materials.
Please acknowledge receipt of this letter by date-stamping the accompanying
acknowledgment copy and returning it to the undersigned in the self-addressed
postage pre-paid envelope provided. Please call the undersigned at (479)
277-3302 or Jeffrey J. Gearhart, Vice President and General Counsel, Corporate
Division, at (479) 277-2345 if you require additional information or wish to
discuss this submission further.
Thank you for your consideration.
Respectfully Submitted,
/s/
Samuel A. Guess
cc: Daniel F. Pedrotty
Director
American Federation of Labor and
Congress of Industrial Organizations
815 Sixteenth Street, NW
Washington, D.C. 20006
Enclosures
[INQUIRY LETTER]
December 11, 2006
By UPS Next Day Air
Mr. Jeffrey J. Gearhart, Vice President and General Counsel, Corporate Division,
and Assistant Secretary
Wal-Mart Stores, Inc.
702 Southwest Eighth Street
Bentonville, Arkansas 72716-0215
Dear Mr. Gearhart:
On behalf of the AFL-CIO Reserve Fund (the "Fund"), I write to give notice that
pursuant to the 2006 proxy statement of Wal-Mart Stores, Inc. (the "Company"),
the Fund intends to present the attached proposal (the "Proposal") at the 2007
annual meeting of shareholders (the "Annual Meeting"). The Fund requests that
the Company include the Proposal in the Company's proxy statement for the Annual
Meeting. The Fund is the beneficial owner of 2,200 shares of voting common stock
(the "Shares") of the Company and has held the Shares for over one year. In
addition, the Fund intends to hold the Shares through the date on which the
Annual Meeting is held.
The Proposal is attached. I represent that the Fund or its agent intends to
appear in person or by proxy at the Annual Meeting to present the Proposal. I
declare that the Fund has no "material interest" other than that believed to be
shared by stockholders of the Company generally. Please direct all questions or
correspondence regarding the Proposal to me at (202) 637-5379.
Sincerely,
/s/
Daniel F. Pedrotty, Director
Office of Investment
DFP/me
opeiu #2, afl-cio
Attachment
[APPENDIX]
Shareholder Proposal
RESOLVED, that the shareholders of Wal-Mart Stores, Inc. ("Company") urge the
board of directors ("Board") to disclose in a separate report to shareholders
the Company's relationships with its executive compensation consultants or
firms. Specifically, the Company should, with respect to each firm or consultant
retained by the Company, the Board, or Board Committee to advise on executive
compensation policies or plans (each, a "Consultant"):
1) identify the entity (e.g. the Company, the Board) that retained the
Consultant, and disclose whether any member of the Company's senior management
participated in process of selecting or retaining the Consultant;
2) disclose whether the Consultant has provided, at any time in the last five
years, non-compensation-related services to the Company or any affiliate of the
Company, including services provided by the Consultant through an affiliate for
such services;
3) disclose the Company's policies and procedures regarding
non-compensation-related services provided by its Consultant.
Supporting Statement
The Company's 2006 proxy statement notes that the Board's Compensation,
Nominating, and Corporate Governance Committee ("CNGC") utilizes Consultants,
but the proxy does not disclose information that would allow shareholders to
adequately assess whether Consultants utilized by the CNGC or Board are
sufficiently independent to provide objective advice.
The independence of the Consultants can be an important factor in determining
how senior executives are compensated. According to one recent study, "CEOs have
often been involved in the selection process" (Bebchuk and Fried, "Pay Without
Performance", 2004). The authors add that, "Even if the CEO has not been
involved [in the selection process], the chosen consultant has understood that a
recommendation that displeases the CEO may pre-empt the consultant's future
employment."
An October 23, 2005 article from The New York Times ("NYT") suggested that
escalating executive pay could be explained by the fact that "if the consultants
want to be rehired in future years, they will not want to hurt their chances by
suggesting that a chief receive less than his or her peers do." The independence
of the Consultants may also be compromised by additional business relationships.
According to an April 9, 2006 NYT article, compensation consultants "are often
motivated to produce big paydays for managers. After all, the boss can hand
their company lucrative contracts down the road."
In regards to our Company's executive compensation, The Corporate Library
("TCL") has characterized it as a "very high concern," and states that excessive
CEO compensation and incentive policies are "poorly linked to sustainable,
long-term gains in shareholder value." TCL notes that even though the company
underperformed the S&P 500 as well as its peer group in fiscal 2005, CEO Lee
Scott still received an annual bonus of $3.9 million. Although returns have not
been positive for three years, Mr. Scott has received $4.4 million in long-term
performance bonuses, according to TCL.
We believe that the disclosure of relationships that may compromise the
independence of the Company's Consultants will help ensure that executive
compensation decisions are rendered independently and in the interests of
shareholders.
[INQUIRY LETTER]
February 14, 2007
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Request by Wal-Mart Stores, Inc. to omit shareholder proposal submitted by
AFL-CIO Reserve Fund
Dear Sir/Madam:
This letter is submitted in response to the request of Wal-Mart Stores, Inc.
("Wal-Mart" or the "Company"), by letter dated January 24, 2007, that the staff
of the Division of Corporation Finance ("Staff") of the Securities and Exchange
Commission ("SEC") concur that it will not recommend enforcement action if
Wal-Mart omits the shareholder proposal ("Proposal") of the AFL-CIO Reserve Fund
("Proponent").
I. The Proposal
The Proposal urges the board of directors of the Company ("Board") to prepare a
separate report to shareholders disclosing the Company's relationships with its
executive compensation consultants. Specifically, the report would provide the
following information with respect to each firm or consultant retained by the
Company, the Board, or a Board Committee:
1) the entity (e.g. the Company, the Board) that retained the Consultant, and
whether any member of the Company's senior management participated in the
process of selecting or retaining the Consultant;
2) whether the Consultant has provided, at any time in the last five years,
non-compensation-related services to the Company or any affiliate of the
Company, including services provided by the Consultant through an affiliate;
3) the Company's policies and procedures regarding non-compensation-related
services provided by its Consultants.
The Company argues that the Proposal is excludable under Rule 14a-8(i)(10)
because the disclosures required by Item 407(e) of Regulation S-K of the
Commission ("New Disclosures") will substantially implement the Proposal.
Wal-Mart also argues that they have not only substantially implemented the
Proposal but that they have also "fully implemented" the Proposal.
According to Rule 14a-8(g), "the burden is on the company to demonstrate that it
is entitled to exclude a proposal." Wal-Mart has not met this burden because the
New Disclosures omit several of the Proposal's key elements, including the
provision of a separate report, disclosure of senior management's participation
throughout the process of retaining and engaging Consultants, a statement as to
whether each Consultant or its affiliates provided non-compensation-related
services to the Company or its affiliates during the last five years, and
information about the policies and procedures guiding Consultants' provision of
non-compensation-related services.
II. The Company failed to show that the Proposal has been substantially
implemented.
Wal-Mart argues that by providing the New Disclosures, they will fully implement
each element of the Proposal. In the alternative. Wal-Mart argues that the
Proposal may be excluded under Rule 14a-8(i)(10) if a company has policies and
procedures in place that compare favorably to the guidelines of the proposal,
See Texaco, Inc. (available March 28, 1991), despite a company's failure to
implement certain elements of a multi-part proposal. See Columbia/HCA Corp.
(available February 19, 1998). In our opinion, the New Disclosures clearly fail
to address each element of the Proposal, compare favorably to the Proposal, or
implement sufficient elements of the Proposal.
A. The Company has not agreed to "fully implement" or substantially implement
the Proposal because the New Disclosures fail to address key elements of the
Proposal.
The disclosures "offered" by the Company as evidence that they have fully
implemented the Proposal are exactly the same as those required pursuant to Item
407(e)(3)(iii) of Regulation S-K. These disclosures overlook several essential
elements of the Proposal. The Proposal urges the Board to supplement the New
Disclosures by providing substantial additional information in a separate report
to shareholders. Separate notification is a key element of the Proposal because,
if included within the Company's proxy materials, the information may be
overshadowed by the voting matters presented for approval at the annual meeting.
The New Disclosures are insufficient to substantially implement the Proposal
because they do not inform shareholders whether each Consultant, or its
affiliates, provided non-compensation-related services to the Company, or its
affiliates, during the last five years. The Company argues that they have fully
implemented the request for disclosure because Wal-Mart has no such procedures
in place and therefore has nothing to report. In our opinion, if the Company has
no policies and procedures in place, they should disclose that no such policies
exist. The Company's failure to report on this core element of the Proposal
ignores the need for transparency and disclosure around business relationships
that may compromise a consultant's independence.
The Company erroneously asserts that they will fully implement Proponent's
request for disclosures indicating whether any member of senior management
participated in the process of selecting or retaining each Consultant by
disclosing "the position with the Company of the person who engaged or retained
any of the Consultants." According to the American Heritage Dictionary, to
"engage" is "to obtain or contract for the services of," and to "retain" is "to
keep in one's service or pay." 1 Whereas the disclosure that Wal-Mart
contemplates would simply identify the position of the individual who signed the
contract with the Consultant, the disclosure prescribed within the Proposal
would state whether members of senior management took a more active role and
participated in the selection process from start to finish.
In light of the multiple, material omissions from the Company's disclosure, the
Proposal has neither been "fully implemented," as the Company claims, nor
substantially implemented, and Wal-Mart may not exclude the Proposal under Rule
14a-8(i)(10).
B. The New Disclosures do not "compare favorably" with the Proposal and fail to
implement the fundamental issue addressed by the Proposal.
Wal-Mart argues that if the SEC determines that the New Disclosures do not
address each element of the Proposal, the Company may still exclude it under
Rule 14a-8(i)(10) because the disclosures "compare favorably" to those requested
in the Proposal. See Texaco, Inc. (available March 29, 1991) ("Texaco
Decision"). They further argue that a company is not required to implement every
part of a multi-part proposal in order to justify exclusion under Rule
14a-8(i)(10). See Columbia/HCA Healthcare Corp. (available February 19, 1998)
("Columbia Decision").
1. Wal-Mart may not exclude the Proposal in reliance on the Texaco standard
because all elements of the Proposal are crucial and Wal-Mart has not fulfilled
any of them.
Wal-Mart argues that the New Disclosures compare favorably to the Proposal and
seeks to rely on the Staff's broad interpretation of Rule 14a-8(c)(10) (now Rule
14a-8(i)(10)) laid out in the Texaco Decision to justify exclusion. When
considered within the historical context, it is clear that the standard set
forth in Texaco does not apply here.
Following the Exxon Valdez oil spill in 1989, the Coalition for Environmentally
Responsible Economies ("CERES") developed a "model corporate code of
environmentalconduct" originally called the Valdez Principles (now the "CERES
Principles").2 In the 1991 proxy season, shareholder proponents filed 53
proposals urging their companies to take action on the Valdez Principles.3 In
late February and early March 1991, the Staff rejected no action requests from
all of the companies who sought omission based on mootness.4
According to industry news reports, the Staff decisions turned on whether
companies had fulfilled the "crucial element" identified by the proponents'
lawyer as "independent monitoring." 5
Shortly after the Staff denied Texaco's request for relief, Texaco provided the
Staff with extensive reports detailing their environmental practices, including
documentation to show that the company had retained an independent auditor to
develop and implement policies, practices, and procedures to ensure compliance
with environmental laws, regulations, and best practices. Only after the company
provided evidence that they had substantially implemented the crucial element
did the Staff grant relief based on the determination that Texaco's "policies,
practices, and procedures compare favorably with the guidelines of the
proposal."
The Staff's determination in Texaco clearly does not justify Wal-Mart's
contention that the Proposal may be excluded. Each element of the Proposal is
crucial to the essential objective of disclosing relationships that may
compromise Consultants' independence and ensuring that executive compensation
decisions are rendered independently and in shareholders' best interests. In
light of these considerations, a conclusion that the Company has fulfilled the
"crucial element" of the Proposal and, as a result, has implemented policies
that compare favorably to the Proposal is unjustified.
2. The Company may not exclude the Proposal in reliance on the Columbia Decision
because the New Disclosures do not fulfill the fundamental issue the Proponent
seeks to address.
The fundamental issue addressed by the Proposal is the need for information to
supplement the New Disclosures so that shareholders may assess whether
Consultants are sufficiently independent to provide objective advice. In our
opinion, an adequate assessment is dependent upon the Company's disclosure, in a
separate report, of whether members of senior management participated in the
process of selecting Consultants, whether a Consultant or its affiliates
provided non-compensation-related services to the Company or its affiliates
during the last five years, and a statement that no policies exist governing
Consultants' provision of non-compensation-related services to the Company.
Since the New Disclosures omit this information, Wal-Mart has not fulfilled the
fundamental issue addressed within the Proposal.
3. Similar proposals to the Proposal at issue have withstood objection under
14a-8(i)(10).
In the past, the Commission has denied requests for No-Action Letters when
companies sought to exclude shareholder proposals requesting disclosures related
to executive compensation. In El Paso Corporation, SEC No-Action Letter, 2006
SEC No-Act. LEXIS 297 (March 6, 2006), the Staff denied the request to exclude a
shareholder proposal to amend the company's By-laws to require the Board to
include specific disclosures related to executive compensation, in addition to
the disclosures required by Item 402 of Regulation S-K, in any proxy statement.
The Staff accepted the proponent's position that the company's disclosures
"merely aim to ensure compliance with the existing rules concerning disclosure
of executive compensation, which, as noted, do not require the disclosures which
would be required by the Proposal" and denied the requested relief.
Similarly, in Eastman Kodak Company, 1993 SEC No-Act. LEXIS 370 (March 3, 1993),
the company sought to exclude a shareholder proposal urging the board to
"disclose severance compensation made to executive officers." The Staff rejected
the company's assertion that the shareholder proposal was moot, stating that
"the staff does not believe that disclosure under the Commission's new executive
compensation provisions substantially implements the proposal, which appears to
request severance pay disclosure on a broader class of executives than does Item
402 of Regulation S-K."
The disclosures Wal-Mart offered to provide merely aim to ensure compliance with
existing rules. The New Disclosures do not substantially implement the Proposal
which urges the Board to supplement the required disclosure by providing
substantial additional information to shareholders.
III. Conclusion
Wal-Mart failed to meet their burden under 14a-8(g). In light of the clear and
substantial differences between the New Disclosures and the Proposal, Wal-Mart
has failed to demonstrate that they have substantially implemented the Proposal.
If you have any questions or need additional information, please do not hesitate
to call me at 202-637-5318. I have enclosed six copies of this letter for the
Staff, and I am sending a copy to Counsel for the Company.
Sincerely,
/s/
Heather L. Slavkin, Esq.
Legal/Research Analyst
Office of Investment
HLS/me
opeiu #2, afl-cio
cc: Samuel A. Guess, Associate General Counsel and Assistant Secretary, Wal-Mart
-----FOOTNOTES-----
1 The American HeritageDictionary of the English Language, Fourth Edition.
Houghton Mifflin Company, 2004. 05 Feb. 2007.<Dictionary.com
http://dictionary.reference.com/browse/engage>
2 The Ceres Principles. Adapted from The Smart Office, by A.K.Townsend.
Available at http://www.care2.com/channels/solutions/home/205 accessed February
5, 2007.
3 IRRC. How Institutions Voted'91. pg 15
4 "SEC Staff Makes Final Decisions on Shareholder Proposals; 107 Social Policy
Resolutions Will Come to Votes in April." IRRC News for Investors, April 1991.
Page 1.
5 Id.
[STAFF REPLY LETTER]
March 28, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Wal-Mart Stores, Inc. Incoming letter dated January 24, 2007
The proposal urges the board to disclose in a separate report the company's
relationships with its executive compensation consultants or firms, including
the matters specified in the proposal.
There appears to be some basis for your view that Wal-Mart may exclude the
proposal under rule 14a-8(i)(10). Accordingly, we will not recommend enforcement
action to the Commission if Wal-Mart omits the proposal from its proxy materials
in reliance on rule 14a-8(i)(10).
Sincerely,
/s/
Derek B. Swanson
Attorney-Adviser
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