June 1, 2018 - Remarks as prepared for Greg Penner, Chairman of the Walmart Board of Directors, Walmart Inc.
Good morning! It’s my honor, as your chairman, to welcome you to the 48th annual Walmart Associate and Shareholders Meeting!
As Jamie mentioned I was in fact on Mount Everest about 10 days ago. The most interesting part of the climb was that it took two attempts to reach the peak. And there's a powerful story in that.
On our first try, a few days before, we were only 1,000 feet from the top when about half of our oxygen regulators failed. This was a very dangerous situation. It’d be like flying in an airplane at cruising altitude, when suddenly the cabin depressurizes, and the oxygen masks don’t work. We quickly descended 7,000 feet to the safety of camp and prepared to head home.
But over breakfast the next morning, we started to think about our six months of training -- how hard we had worked, how close we came, and whether there was any possible way to make another attempt. We talked through a strategy, cobbled together the oxygen we needed, convinced a few Sherpa who were a little superstitious after our first attempt, and made a run at it.
Two days later, the Moosejaw flag was on top of the world.
In that experience, I saw something that I’ve seen only one other place, and with only one other group of people. Going big, taking risks, never giving up and succeeding. That’s what Walmart, that’s what you, our associates, are all about, now more than ever.
Please know that I appreciate you. Your Board and your leaders appreciate you. This incredible year we’ve had, that we will discuss and celebrate today, is all thanks to you.
At Walmart, the core of our business is strong. We’re on a growth trajectory that, not too long ago, most people wouldn’t have predicted.
We’re seeing that in the traditional ways we measure our growth. For example, across our businesses, comp store sales are at their highest levels in years.
But we’re also growing rapidly to meet the changing needs of our customers. Take grocery pickup in the U.S. In 2014, we were still experimenting with this concept and covered only 2% of the population. By the end of this year, we will expand access to this innovative, money saving, time saving, and, some joke, lifesaving service to as much as 70% of Americans.
Walmart is transforming -- and not by making some false choice between being a store-only retailer or an eCommerce-only retailer. We see the world differently. We see it through our customers’ eyes. Walmart is a growth company with the customer at the center of everything we do.
One of the biggest reasons for our success is Walmart’s culture of risk taking. It’s vibrant. And it’s back.
Think about the last few years. We delivered the largest single-day, private sector pay raise in history to our associates. And then followed it up with another $700 million in raises and bonuses this January. We’ve made our biggest commitment ever to eCommerce and have grown at a much faster rate in the U.S. since Walmart.com became Jet-Powered.
We’re also being creative and flexible in how we reshape the markets we’re in -- such as with our JD.com investment in China, combining our business in the U.K. with Sainsbury’s, and our recent acquisition of the leading eCommerce company in India, Flipkart.
Today at our company, making bold changes is normal, even expected. And we’re not going to let up!
Being bold will keep us on a growth trajectory and leading the race to build the retail model of the future. We’ve seen boldness in our company work before and often in ways that few predicted.
One of the most important and meaningful examples is our work to solve big social and environmental challenges in our world.
Thirteen years ago, Hurricane Katrina devastated the American Gulf Coast. At the peak of the crisis, we sent nearly 2,500 truckloads of supplies and made $18 million in donations. We made a difference that no other company could make at a moment when it mattered most.
Our CEO at the time, Lee Scott, asked a great question: What would it take for Walmart to be that company, at our best, every day? Over time, we’ve turned these words into massive, meaningful value.
Take our commitment to double the efficiency of our trucking fleet. We set that goal in 2005 and achieved it, as promised, in 2015.
Over that ten-year period, compared to when we started, we delivered 1 billion more cases of merchandise; drove 450 million fewer miles; prevented emissions equal to taking 138,000 cars off the road; and, saved our company nearly $1 billion annually.
I’m just as excited to think about what’s ahead, like our opportunity to reduce food waste.
It’s hard to believe, but about a third of the food produced in the world is wasted. We’ve been working on this problem at Walmart.
Over the last two years, with just one pilot program on strawberries in the U.S., we’ve taken a day and a half out of the product supply chain, added two to three days of freshness, and reduced inventory in our distribution centers by 70%. Extraordinary.
What if we could take this approach across our entire fresh business? We don’t have to think too hard to imagine what’s possible. Because last year Walmart U.S. cut its food waste by 100 million units.
Walmart’s opportunity to make a difference is bigger than with any other company in the world. But the only way we will realize our full potential is by finding more partners to work with in new ways. I say this especially to suppliers, where I believe we have our biggest opportunity, join us to do even more. No partner can help you make a bigger difference on the toughest social and environmental issues facing the world than Walmart.
There is no question that we are leading. Walmart is a growth company again. And we’re doing that while redefining the role that businesses can and should play in our world.
I believe we will look back on this moment as a time of true transformation for our company. We went big. We took risks. We never gave up. And we succeeded. This is when we restarted our climb and the world began to see that Walmart could win, and I believe will win, the future of retail.
Now I’d like to take a moment to introduce your Board of Directors. This is a truly outstanding group of individuals. They are diverse with their backgrounds, their thinking and their contributions.
I’d like to ask each board member to stand when I call their name. Please hold your applause to the end.
- The chair of our Audit Committee, retired KPMG Chairman Tim Flynn;
- Square Chief Financial Officer Sarah Friar;
- Morgan Stanley Vice Chairman Carla Harris;
- Former American Airlines Chairman and CEO and our new Lead Independent Director, Tom Horton;
- Former Yahoo President and CEO and now the co-founder of Lumi Labs, Marissa Mayer;
- Walmart President and CEO Doug McMillon;
- The chair of our Compensation, Management and Development Committee, former PepsiCo Chairman and CEO Steve Reinemund;
- Founder of RZC Investments, CEO Steuart Walton;
- And, of course, my predecessor as chairman of the Board of Directors, Rob Walton.
Thank you all for your willingness to continue to serve. Please be seated.
I’m also excited to introduce one new independent member of the Board, Steve Easterbrook. Steve has been the president and CEO of McDonald’s since 2015. He is an inclusive leader, and he is transforming one of the world’s great businesses. We’re fortunate to have him on the Walmart Board. Thank you, Steve.
Stepping off the board and not standing for re-election are two directors who have made significant contributions to our company.
First, Instagram Co-Founder and CEO Kevin Systrom. He has brought an entrepreneur’s perspective and technology expertise to our board. Kevin is leaving us earlier than we would like, but we’ve enjoyed working with him and benefitted immensely from his time with us. Kevin, thank you for your service.
I would also like to recognize Dr. Jim Cash. He’s rolling off our board after 12 years of service, including most recently as our lead independent director. Dr. Cash always seems to strike the perfect balance between being supportive yet challenging to our senior management team. If there was a board of director hall of fame, Jim, you would be in it as one of the all-time greats. Thank you.
That is your Walmart Board of Directors. Thank you for your service, and thank you
to our shareholders for the opportunity to represent you.
Now I have one more piece of business to take care of before we proceed.
On Wednesday, we held a formal meeting where we heard proposals and cast votes. The preliminary voting results were included in a press release that is now available on our corporate website.
Let me share those with you in person right now:
- All 11 director nominees were elected;
- The non-binding, advisory resolution regarding our executive compensation was approved;
- The proposal ratifying the appointment of Ernst & Young as our independent accountants was approved; and,
- Each of the shareholder proposals presented failed to receive a majority vote.
The official voting results will be disclosed next week in a filing with the Securities and Exchange Commission.
Now let’s get on with the meeting.