Business

Wal-Mart keeps it all in the family; chairmanship passed to Penner

Wal-Mart is passing the chairmanship of the world’s largest retailer from the eldest son of late founder Sam Walton to a third generation.

The company said board Chairman Rob Walton will step down and be succeeded by Vice Chairman Greg Penner, who is his son-in-law.

The change took effect at the end of the company’s annual shareholders’ meeting Friday and came despite pressures from labor-backed worker groups to name an independent chairman. The calls for independent leadership mounted in the wake of allegations of bribery in Mexico and other countries Wal-Mart operates in that came to light in spring 2012.

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 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 as 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.

Like many retailers catering to lower-income shoppers, Wal-Mart has been hurt by an uneven economy that hasn’t buoyed its customers financially. Meanwhile, shoppers are increasingly researching and buying online, and the company faces intensifying competition from dollar stores and Amazon.com.

To counter that pressure, Wal-Mart 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 investing in its workers. The company announced earlier this year $1 billion 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 that minimum to $10.

The company is also relaxing the dress code for the 1.2 million workers at its namesake U.S. stores, piping music to its stores and adjusting the temperatures so workers are not too cold or hot.

The changes have 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 who doesn’t serve as an executive at Wal-Mart. The proposal and four other shareholder proposals were voted down by a majority of votes, according to a preliminary tally because of the Walton family’s control.

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