On Friday, Wal-Mart Stores Inc. (NASDAQ:WMT) made a very important announcement according to which, Rob Walton has named his son-in-law as his successor to run the business.
Many investors were in favor of the decision as they pushed the fact that the Chairman of the company should not be from the Walton family. They were of the belief that the company needs stricter regulations after the bribery scandal that was surfaced three years ago involving the Mexico operations of the company.
Greg Penner, 45, will take over the chairmanship position from Rob Walton at the end of the annual shareholder’s meeting in Fayetteville, Arkansas on Friday. This is the same location where the world’s largest retailer was founded 53 years ago. Greg Penner married the granddaughter of Sam Walton, the founder of Wal-Mart. It is important to note that Sam Walton died in the year 1992.
Penner worked as an analyst for Goldman Sachs in the past where he held on to a senior position in the online business and as the chief financial officer in Japan. According to Doug McMillon, the Chief Executive Officer, “His experience and background are going to help us as a company move into the future.”
The proposal of the shareholder was supported by both major proxy firms, Institutional Shareholder Services and Glass Lewis. Some of the top investors have also shown great support to the decision made by the company. The manager of $160 billion of New York City Funds also elongates his support to the appointment of Penner as the chairman of Wal-Mart.
According to the New York City Comptroller Scott Stringer, “We voted for an independent chair and Greg Penner is not independent, New York City Comptroller Scott Stringer said in a statement. The Wal-Mart board’s decision to name Penner as chairman serves the interests of the Walton family at the expense of the company and its outside shareholders and is further evidence of the need for an overhaul of the board.”
Penner has been working for the company since 2008 and took over the vice chairman position in June. This move was a significant one in him replacing Rob Walton as the chairman of Wal-Mart. We will have to wait and see how Penner copes up with the big responsibility vested upon him.