The retailer’s results were underwhelming last year, leading to cash bonuses that were “significantly below target levels”, Wal-Mart said in its proxy statement.
Wal-Mart Stores WMT 1.12% had a mediocre year last fiscal year, a performance that directly hit the pocketbooks of its top executives.
While the world’s largest retailer reported net income of $16.2 billion on total sales of $485.7 billion for the year that ended January 31, up a bit from a year earlier, Wal-Mart’s comparable sales (sales at stores open at least a year, combined with digital sales) at its U.S. namesake stores rose a paltry 0.6%, helped largely by a decent though not stellar holiday quarter. And at Sam’s Club, comp sales stagnated, while Walmart International saw total sales edge down 0.3%.
Under Wal-Mart’s pay-for-performance guidelines, at least 70% of its very top executives’ target total direct compensation depends on hitting specific performance targets related to sales, operating income, and return on investment. But because of the tepid sales and profit numbers last fiscal year, the top brass missed out on a big chunk of the potential bonuses.
“As a result of this performance, our fiscal 2015 annual cash incentive payments were significantly below target levels,” Wal-Mart said in its proxy statement filed late Wednesday.
In his first year as CEO, Doug McMillon stood to get a cash bonus of up to $3.84 million, but instead only got $2.88 million, or 75% of the potential payout. (Don’t feel too bad for him: his total compensation was $19.392 million, but still, that was down from $25.592 million in the prior year.) Chief Financial Officer Charles Holley similarly only got 75% of the cash bonus he could have earned.
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