FAYETTEVILLE, Ark. (AP) — Wal-Mart is passing the chairmanship of the world’s largest retailer from one family member of the late founder Sam Walton to another.
The company said that board Chairman Rob Walton will step down and be succeeded by Vice Chairman Greg Penner, who is his son-in-law.
The changes become effective at the end of the company’s annual shareholders’ meeting, which is being held Friday.
Walton, son of Wal-Mart founder Sam Walton, has been chairman since 1992. The company says the 70-year-old will continue to serve as a director. Jim Walton, another son of the late founder, also remains on the board.
Penner, whose background is in technology and finance, will be the company’s third chairman in the company’s 53-year history. Rob Walton took over as chair upon the death of his father in 1992. The announcement comes Wal-Mart is facing challenges on all fronts, from how it runs its operations to how it treats its workers.
Penner, 45, joined Wal-Mart as a management trainee and held a number of positions including senior vice president of finance and strategy for Walmart.com and chief financial officer for the Japan unit. He had been a general partner of Madrone Capital Partners, an investment management firm since 2005. He joined Wal-Mart’s board in 2008. Rob Walton noted on stage at the meeting that Penner is married to his daughter.
Penner had been the chairman of the company’s technology and e-commerce committee since it was formed in 2011 and has been instrumental in guiding the company on the technology front.
“You’ve been a great mentor. No one can fill your shoes,” said Penner, referring to Walton. Penner joined Walton on stage as well as Doug McMillon, the company’s CEO, and former CEO David Glass who served at the helm from 1988 to 2000.
Walton said that Penner “brings an ideal blend of finance, technology, and international business expertise — as well as a deep knowledge and love of Wal-Mart — to this role.”
The announcement was not a surprise after Walton named Penner as vice chairman at last year’s annual shareholders’ meeting. The Walton family controls about 50 percent of the company’s shares.
Keeping with Wal-Mart’s practice of showcasing celebrities at the annual event, the meeting was being hosted by actress Reese Witherspoon. Singer Brian McKnight as well as Ricky Martin also appeared on stage. Entertainer Carol Burnett was on stage, too, and did her trademark Tarzan call.
“I was born and raised in the South. It’s nice to be back in the South,” said Witherspoon. “I can get my you’alls out.” She said she grew up shopping at Wal-Mart.
The meeting, held at Bud Walton Arena at the University of Arkansas., 30 miles away from the company’s headquarters in Bentonville, Arkansas, was packed with 14,000 workers from all over the world.
Despite all the hoopla at the meeting, the company is under a microscope. Revenue at stores open at least in the U.S. posted three consecutive quarterly increases, but that came after seven straight declines. And the recent increases have been small. Like many retailers catering to lower income workers, Wal-Mart has been hurt by an uneven economy that hasn’t buoyed its customers financially. Meanwhile, Wal-Mart is grappling with a shopper who is increasingly researching and buying online, and company faces intensifying competition on all fronts, from dollar stores to Amazon.com.
To counter that pressure, the company is accelerating the rollout of smaller stores and also investing in technology, like online grocery services. It just launched a subscription service for online shoppers with an annual fee of $50. But the company, which is also under pressure from labor-backed groups to treat its workers better, is also putting more emphasis on investing in its workers. The company announced earlier this year a $1 billion investment in wage increases and improved training that includes raising the minimum hourly pay for its workers to $9 in April. By next February, Wal-Mart will raise its minimum wage for hourly workers to $10.
The company is also relaxing the uniforms of its 1.2 million workers at its namesake U.S. stores and is piping back music to its stores and adjusting the temperatures so workers are not too cold or hot. The changes in pay and smaller steps are being made as the discounter is putting more emphasis on listening to the complaints of its workers. With more training and higher pay for employees and other smaller changes, the company is hoping for a sales boost.
That has not quieted labor groups, which say workers are still struggling. They are pushing for wages of $15 per hour. Among the proposals by shareholders was a call for an independent chairman that doesn’t serve as an executive at Wal-Mart. The proposal was voted down last year and it’s expected to be voted down again because of the Walton family’s control.
Venanzi Luna, a worker in the Pico Rivera, California Wal-Mart store that was closed in April, also addressed shareholders Friday. Company officials said the store had to close temporarily because of plumbing issues. But Luna and other workers said it was because it was the site of political activism and the move was in retaliation against the workers.
“Our managers say our stores closed for ‘plumbing problems,’ but the real reason is that my store had been speaking out for change at Wal-Mart,” she said.
“Our board of directors needs an independent chair committed to the highest standards of integrity.”
Associated Press Business Writer Candice Choi contributed to this report from New York.
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