Pay for Failure: The Compensation Committees Responsible
The Corporate Library March 31, 2006 Portland, Maine

A newly released study by The Corporate Library ("TCL") of executive incentive compensation practices finds that the gap between pay and performance over the past five years is most pronounced at 11 of the largest U.S. companies. At the 11 companies in the study, Pay for Failure: The Compensation Committees Responsible, The Corporate Library found that compensation committees authorized a total of $865 million in pay to CEOs who presided over an aggregate loss of $640 billion in shareholder value. The 11 companies are some of the biggest household names in Corporate America. Wal-Mart is on the list.

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Crusading Against CEO Pay
Chief Executive Magazine, March 2006

In an interview, Nell Minow, editor and chairman of The Corporate Library, talked about overly high compensation levels for CEOs. She said that she is all for tying pay to performance but the fact is CEO pay went up 30% last year and performance certainly was not anywhere near that. The only people outside a company that can really control CEO compensation are the shareholders and they have done a very poor job. Boards of directors should control it and, if they do not control it, shareholders should respond. Shareholders have failed to understand that CEO pay is not just something to shake your head over when you get your proxy statements. Bad CEO pay is a terrible example of bad asset allocation. The return on investment for CEO pay is unacceptable. It is an indicator of a failure of oversight on the part of the board that permeates throughout the company.

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Activists pressure Wal-Mart Sophisticated campaign takes place of traditional union organizin
By: Stephen Franklin, Tribune staff reporter Chicago Tribune November 20, 2005

…Chris Ohlinger of Service Industry Research Systems in suburban Cincinnati said consumers' trust in the company has "significantly declined" from several years ago. And that can parlay into a 1 percent drop in sales, he added.

Ohlinger doubted that the impact would be long lasting. Most consumers, he said, are concerned more about low prices than anything else.

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Wal-Mart Sponsors Economic Conference
Anne D'Innocenzio, AP Business Writer November 3, 2005 NEW YORK:

Under a barrage of criticism that Wal-Mart Stores Inc. is bad for the overall economy, the world's largest company is taking a public look at itself.

…Wal-Mart is growing more worried that the bad publicity is keeping some shoppers away from their stores, according to an internal memo made public by Wal-Mart Watch on Monday.

The August 2004 memo, drawn up by consulting firm McKinsey & Co., reported that 2 percent to 8 percent of 1,800 shoppers polled had stopped shopping at the retailer because of the negative press.

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Can Wal-Mart Fit Into a White Hat?
Business Week Oct. 3, 2005

H. Lee Scott Jr., Wal-Mart's tough CEO, is on a charm offensive -- and how it plays out could change perceptions of the retailing leviathan at home and abroad. For several years, Scott shrugged off relentless criticism, but he now admits the broadsides on everything from labor practices to suburban sprawl were starting to inflict real damage. In fact, U.S. sales growth at stores open at least a year have fallen by half, over the past four years, to 3% in 2004. So this year Scott decided to speak out. "When growth was easier, this idea of critics simply being ignored was O.K. [But] as the share price slows, you have to get to this point," Scott told BusinessWeek…

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CalPERS wants to curb soaring executive pay
Gilbert Chan, Bee Staff Writer Sacramento Bee November 16, 2004

The nation's biggest public pension fund vowed Monday to wage an all-out campaign to rein in multimillion-dollar pay packages and golden parachutes for executives. Trustees of the California Public Employees' Retirement System will recruit federal regulators, stock exchanges, major investors, compensation consultants and corporate executives to support its six-point strategy over the next three years.

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Putting a Ceiling on Pay: No Whole Foods executive can earn cash pay of more than 14 times what its average worker makes. Will other companies follow?
Andrew Blackman, Staff Reporter The Wall Street Journal April 12, 2004

…Whole Foods Market Inc., the country's leading organic-food retailer, has a rule preventing any executive from earning an amount in salary and bonus that's more than 14 times what the average worker makes. The current cap: $409,000.

The idea, the company says, is to foster a sense of partnership among the employees, or "team members" as they are called at Whole Foods, of Austin, Texas.

"It's part of our culture," says company co-founder and Chief Executive John Mackey, who adds that Whole Foods has used such ratios since before it went public in 1992. "We have a philosophy of shared fate, that we're in this together," he says.

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How High Can CEO Pay Go?
John A. Byrne, with bureau reports, Business Week

Though it's virtually impossible to isolate the impact of high CEO pay on employee morale and productivity, some researchers have discovered that pay inequality in organizations leads to less cooperative work environments, higher turnover, and lower product quality. A 1992 study of 89 organizations that made products ranging from kitchen appliances to truck axles found lower product quality in outfits with the widest gaps in pay. ''These organizations weren't able to sustain a workplace of people with shared goals,'' explains David I. Levine, co-author of the study and a professor at the Haas School of Business at Berkeley.

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